SGC Energy pursues transformation of biomass power plants in Vietnam

South Korea's SGC Energy Co. is pursuing a project to convert coal power plants abroad into those using biomass.

The power supplier, which has secured a new growth engine and will raise its corporate value, plans to use this venture as a springboard to launching its energy business globally.

SGC Energy on Wednesday said it concluded a memorandum of understanding (MOU) with its affiliate SGC eTEC E&C and Power Engineering Consulting Joint Stock Company 1 (PECC1), an entity under the government-run Vietnam Electricity (EVN), for a project to convert coal power plants into those using biomass.

The deal was promoted as part of Hanoi's joint business development strategy "Green Energy" under Vietnam's Power Development Plan 8.

The three companies will jointly pursue the conversion of coal power plants run by a Vietnamese public company into those using biomass. PECC1 supervises the project feasibility study and communication with stakeholders, SGC eTEC E&C design, procurement and construction, and SGC Energy plant operation and management.

The project is considered a preemptive response to the Vietnamese policy of removing coal as well as securing future-oriented growth engines. Considered "an emerging energy market," Vietnam has mostly high-output, cutting-edge power facilities with a steadily growing market for electric power.

SGC Energy has experience and technology in converting bituminous coal power plants into those using recycled resources, so its business outlook in Vietnam is deemed stable. Starting with this agreement, the company will raise its international competitiveness and actively reduce CO2 emissions abroad by laying the groundwork for pursuing eco-friendly energy business worldwide.

"The conversion project for biomass power plants in Vietnam will be a signal for SGC Energy's overseas business push," said CEO Lee Woo-sung. "Going forward, we will keep up the flow of sustainable growth through carbon reduction and resource circulation."

PECC1, Vietnam's leading power engineering consulting company that signed the MOU with SGC Energy, has experience in large-scale projects not only in Vietnam but also Laos and Cambodia. EVN owns a 54% stake in PECC1.

Write to Seo-Woo Jang at suwu@hankyung.com