Tran Sy Thanh, chairman of the state-owned giant, suggested at a meeting Tuesday that PetroVietnam should be allowed to again fund the Thai Binh 2 Thermal Power Plant in northern province Thai Binh with its equity capital.

Construction started in 2011, but was suspended after some top officials of PetroVietnam and its subsidiary PVC, the project's EPC contractor, were arrested for violations related to an ethanol plant in nearby Phu Tho Province. 

Former PetroVietnam chairman Dinh La Thang and former general director of PetroVietnam Construction Corporation (PVC), Trinh Xuan Thanh, are now in prison for economic management violations.

Because of officials’ wrongdoing, lenders have cut credit to the project, and the possibility of borrowing more is unlikely, Thanh told leaders of the Ministry of Industry and Trade (MoIT) and the Committee for Management of State Capital (CMSC), which manages PetroVietnam, at the meeting.

The 1,200 MW Thai Binh 2 was estimated to cost VND42 trillion ($1.8 billion), of which 76 percent has been spent. Some 84 percent of the work has been completed.

With a design capacity similar to that of Mong Duong 2, invested by the U.S. firm AES, and the under-construction Hai Duong power plant, invested by Malaysia's Jaks Resources Berhad, Thai Binh 2 is one of key power projects in northern Vietnam.

The project, part of Thai Binh thermal power complex, will contribute 7 billion kWh of electricity to the national grid when finished, according to the MoIT. If it fails to go on stream next year as scheduled, it will cost the country VND35 trillion ($1.5 billion) a year to generate electricity using oil instead of coal, the ministry said. 

"Without money, the project will close in the next few months. We don’t have money to pay salaries and suppliers. Many workers have quit. Ministries are reluctant to allow the project to continue," Thanh said.

The main components of the plant are finished, and equipment needs to be installed before a trial run could begin, he added.

MoIT Minister Tran Tuan Anh said at the meeting that since Thai Binh 2 is a key project ministries need to give their opinions about it so that the MoIT could transmit PetroVietnam’s request to the government.

Vietnam needs $150 billion by 2030 to develop its energy sector as electricity demand in its rapidly growing economy is set to grow by 8 percent a year for the next decade, according to the World Bank.