KEPCO and Vietnam's EVN Forge Energy Alliance: A Strategic Pivot for Power and Growth

Korea Electric Power Corporation (KEPCO) and Vietnam’s state utility Vietnam Electricity (EVN) have cemented a partnership this year that could reshape Vietnam’s energy landscape while positioning KEPCO as a cornerstone of Southeast Asia’s energy infrastructure. The Hai Lang Power Center project in Quang Tri province, a $2.3 billion venture, stands as the crown jewel of this collaboration, but it is just one piece of a broader strategy to modernize Vietnam’s grid, diversify its energy mix, and secure long-term power supplies.

The Hai Lang Power Center: A $2.3B Lever for Energy Security

The Hai Lang project, led by a consortium including Hanwha Energy, Kogas, Kospo, and Vietnam’s T&T Group, aims to deliver 1,500 MW of power capacity by 2029. Its centerpiece is an LNG terminal capable of importing 1.5 million tons of liquefied natural gas annually, a critical step in reducing Vietnam’s reliance on coal. The project’s timeline, however, has been recalibrated: after a slow start following its 2022 groundbreaking, 2025 will see accelerated progress, including a power purchase agreement (Q3), financial close (Q4), and construction commencement (Q4).

KEPCO’s stock has risen 18% since 2021, reflecting investor confidence in its overseas expansion. The Hai Lang project, its largest single investment in Vietnam to date, underscores its ambition to leverage South Korea’s engineering prowess in a market projected to grow its electricity demand by 8% annually through 2030.

Yet the project’s success hinges on grid integration. EVN and the consortium are negotiating a 23-kilometer, 500 kV power line to connect Hai Lang to Vietnam’s national grid—a proposal requiring Prime Ministerial approval to fast-track. Without this link, the plant’s output could remain stranded, risking delays and cost overruns.

Broader Strategic Partnership: Renewables and Digitalization

The Hai Lang project is part of a wider partnership formalized through an extended MoU signed in June 2023. KEPCO and EVN aim to collaborate on renewables, grid modernization, and LNG technology. KEPCO’s existing 2,400 MW capacity in Vietnam, including the Nghi Son 2 thermal plant (a joint venture with Japan’s Marubeni), provides a foundation for scaling up.

Vietnam’s energy demand has surged 9% annually since 2020, driven by industrialization and urbanization. KEPCO’s expertise in smart grids and digital solutions—such as AI-driven grid management—could help stabilize Vietnam’s grid, which frequently faces blackouts during peak periods.

Challenges: Delays, Environmental Scrutiny, and Regulatory Hurdles

The Hai Lang project’s delayed progress since 2022 highlights the risks inherent in cross-border infrastructure deals. Environmental concerns also loom: while the project reduces coal dependence, KEPCO’s continued investment in coal-fired plants (e.g., the 1,200 MW Van Phong 1 project) faces backlash from climate advocates.

Moreover, Vietnam’s regulatory environment remains a wildcard. The Prime Minister’s approval of the 500 kV line and EVN’s financial capacity to honor power purchase agreements will determine the project’s viability.

Conclusion: A Calculated Risk with High Stakes

The KEPCO-EVN alliance represents a calculated bet on Vietnam’s energy future. With Hai Lang’s 1,500 MW capacity alone covering 2% of Vietnam’s current installed power capacity, the project could bolster energy security and attract further investments in the region. KEPCO’s total Vietnam portfolio—now exceeding $4 billion—positions it to capture 10% of the country’s $100 billion energy infrastructure pipeline through 2030.

However, risks remain. Delays and regulatory bottlenecks could erode returns, while Vietnam’s push to phase out coal by 2040 may strain KEPCO’s coal-heavy projects. Investors should monitor two key metrics: the timeline for the 500 kV grid connection and Vietnam’s progress in renewable energy adoption.

For now, the deal underscores a strategic alignment between South Korea’s energy expertise and Vietnam’s urgent need for reliable power—a partnership that, if successful, could serve as a template for Southeast Asia’s energy transition.

As regional LNG demand is projected to rise 40% by 2035, KEPCO’s leadership in Hai Lang positions it to capitalize on this trend. The stakes are high, but the rewards—both economic and strategic—could redefine the region’s energy landscape.