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[HANOI] Vietnam is pushing to speed up the privatisation of power plants under three state groups that control its energy sector with an aim to cut government ownership by 2020, signalling its commitment to raise funds and improve efficiency.
Hanoi has been striving to trim stakes in state-owned enterprises (SOEs), many of which have low profitability, but progress has been slow given small stakes on offer, sizable state control and concerns about vested interests.
Vietnam's reform drive has, however, picked up pace after the April swearing in of Prime Minister Nguyen Xuan Phuc, who has asked privatised SOEs, big players like flag carrier Vietnam Airlines IPO-VAL.HM , to speed up listing shares.
Mr Phuc has now listed measures to quicken the privatisation of the electricity generation firms owned by state utility Vietnam Electricity (EVN) group, PetroVietnam and mining group Vinacomin, according to a statement issued late on Monday.
While the state energy groups will still own the majority of shares in the power plants by 2018, they will need to review and cut their ownership to below 50 per cent within two years since the privatisation date, the statement said without elaborating.
The government will, however, retain full control of power transmission, regulating the national grid as well as building and operating major power plants, the statement added.
According to an earlier plan, approved in Dec 2015 and seen by Reuters, power plants under EVN, PetroVietnam and Vinacomin were expected to sell shares by 2020.
The government has also asked the Industry and Trade Ministry to work with EVN to look at privatising electricity retail sales, the statement said, adding that the power distribution firms would not be privatised.
Vietnam's January-September power output rose 11.32 per cent from a year ago to 132.2 billion kilowatt hour, of which EVN power plants accounted for 46.8 per cent, EVN data shows.
The country has suspended buying electricity from China since July this year, given increased output from domestic coal-fired and hydropower plants, according to EVN reports.
As part of its privatisation drive, Vietnam is looking to sell stakes in dairy company Vinamilk and let top brewers Sabeco, Habeco and other SOEs which have undergone initial public offerings make share debuts.
IPO and listing are two separate processes in Vietnam.