Construction of a 600-mw thermoelectric plant began in Vietnam's southern Can Tho City on Sunday, Vietnam News Agency reported.

The O Mon No. 1 plant is expected to generate 3.6 billion kwh of electricity annually. Its first turbine is expected to become operational in 2008 and the second in 2010.

Total investment of the two-turbine plant is nearly 6.7 trillion Vietnamese dong (roughly 424.1 million U.S. dollars), of which 85 percent from the Japanese government's preferential loan.

The O Mon No. 1 is the first plant constructed in the O Mon power center in the country's southern Mekong delta. The center, which comprises of four power stations with total capacity of 2, 800 MW, will be built at a cost of 2 billion dollars.

Vietnam is spending nearly 37.56 trillion Vietnamese dong (over 2.36 billion dollars) on developing power projects in 2006 to meet its increasing demand for electricity. Power demand has annually increased 13-15 percent in recent years in the country, where 60 percent of the electricity output comes from hydroelectricity, according to the state-owned Vietnam Electricity (EVN), the country's biggest electricity producer and sole distributor.

Vietnam's demand for electricity is estimated at 53 billion kwh this year, up around 17 percent against last year. Now, 96 percent of the communes in the country have access to the national power grid, the EVN said.

Source: Xinhua