The US$582 million plant is being built by the Shanghai Electricity Group. It will be fully operational by 2010 to generate an average 3.6 billion kWh per year.

The plant is good news for the country's energy market experts, that have warned of power shortages caused by increased industrial production in the country.

The Electricity of Vietnam (EVN) has raised concerns that the country faces a shortage of an additional 1,200MW per year for the period of 2006-2010, if energy production is not ramped up.

According to the World Bank (WB), Vietnam would have to double electricity production capacity to more than 25,000MW by 2010 in order to meet demand. To date the country is 40 percent reliant on hydro-electric power resources.

Experts have warned that Vietnam should diversify its power production methods as hydro-electric power production fluctuates at the whim of the weather.