(Quoted from Sofie Krýžová) In a few months, one of the richest Czechs, Pavel Tykač, could become the largest Czech investor in Vietnam. However, the authorities have not yet approved his acquisition of a majority stake in the Mong Duong 2 power plant. The investment also carries significance for the Czech Republic.

From our correspondent in Vietnam

Although the name of the Czech group Sev.en is not yet visible on the Mong Duong 2 power plant in Vietnam, it becomes clear who the future majority shareholder will be as soon as you turn into the first hallway of the administrative building.

Two framed items hang on the wall: a red-and-white jersey and a supporter’s scarf of Prague's Slavia football club. The club’s owner and billionaire, Pavel Tykač, is nearing the acquisition of this Vietnamese coal power plant.

Sev.en Global Investments signed the contract to acquire the plant back in 2023, but local authorities have been slow, and the process remains incomplete. The approval procedure in Vietnam takes longer than in the Czech Republic.

"We are ready to take over the plant virtually immediately, but we are still waiting for the local authorities, who must approve the transaction. The entire approval process is extremely slow and lengthy by international standards, and in Vietnam, it lacks a defined time frame or deadlines," explains Veronika Diamantová, Director of Communications at Sev.en Global Investments.

The process might be accelerated by the visit of the Czech Minister of Industry and Trade, Lukáš Vlček (STAN), to Vietnam, where he met with his counterpart. "It is in our national interest to ensure that Czech investments abroad are not wasted. What Czechs earn abroad logically returns in part to the Czech Republic in the form of taxpayers' money," says Vlček.

The investor now hopes that he could officially gain the majority stake within months, likely in the first half of next year.

However, Sev.en will only be able to operate the plant for the next 15 years. By 2040, it must hand the power plant over to the state, which will take over its operations. "The plant's owners are committed to operating it according to the highest safety and environmental standards," says Diamantová.

The Vietnamese office declined to comment on the investment amount. However, the original construction cost of the power plant was USD 2.1 billion. Tykač is set to acquire a 70% stake, which would make him the largest Czech investor in Vietnam and mark the largest European investment in the Vietnamese energy sector.

He is expected to acquire a 19% stake from China Investments Corporation and 51% from the American AES Corporation.

The deal makes sense for the investor both in terms of strengthening Czech-Vietnamese relations and from an economic standpoint.

Sev.en Global Investments is also analyzing other investment opportunities in Vietnam. "We see Vietnam as a gateway to Southeast Asia. Our appetite is aimed at similar projects like Mong Duong 2—that is, traditional power generation with long-term contracts—but we are also open to opportunities in other areas of interest. For example, we are looking into mineral resource extraction," Diamantová adds.

Although Mong Duong 2 is technologically almost the same as Czech coal-fired plants, it is younger and more modern. Built just ten years ago, it emits significantly fewer pollutants into the atmosphere. However, emission limits in Vietnam are not as strict as in Europe.

Mong Duong 2 also has another Czech footprint—its turbines were manufactured by Doosan Škoda Power in Plzeň. For this reason, Minister Vlček sees such foreign investments as support for Czech exports.

"When someone modernizes this plant, especially in this very humid climate, maintenance and upgrades must be far more intensive than in the Czech Republic. Naturally, they will turn to technologies they've tested before and to the same suppliers. This is important for the Czech export economy," Vlček notes.

In recent years, domestic power plant operators in the Czech Republic have warned of early closures, with some becoming unprofitable as early as the 2030s. Although the Czech energy law may temporarily support their operation, they cannot avoid economic realities.

Such a scenario is unlikely in Vietnam, where coal-fired electricity generation will remain profitable for a long time. Vietnam has a fixed electricity purchase price, and the government has set the coal phase-out target for 2050.

Coal continues to play a crucial role in Vietnam's energy mix. Last year, coal plants generated half of the country’s electricity, with hydropower accounting for 29%, solar power 10%, and the remainder from gas.

Mong Duong 2 is key to Vietnam’s energy sector. It produces 7% of the annual electricity consumption in Hanoi and northern Vietnam, and covers 3% of the country's total electricity needs.