2. “Mini Nuclear Reactors in Vietnam” The Babcock & Wilcox Company (B&W) James Dowd, Amol Kasbekar, Mark King, Michael Strosnider, & Tim Yee STRT 571 - International Business Environment – Final Project Monday, May 3, 2010

3. The Foreign Direct Investment (FDI) in Vietnam “…aggressively expand its reach overseas, both to meet corporate growth goals and to diversify its customer base to produce more consistent and predictable financial performance” (Summer 2009 Explore, 2009) - B&W CEO Brandon Bethards ObjectiveMarket seeking / Horizontal Growth LocationVietnam RegulationsFDI – < 49% in domestic operations and no land ownership Nuclear – March 2010 MoU Agreement between US & Vietnam AgreementJV with PetroVietnam - Design, build, operation, and transfer of nuclear power plant (Build, operate, transfer agreement) TimingTarget construction date 2015, with 2018 start-up. TechnologyB&W mPower Reactor Technology - small-scale modular reactor Self-contained pressure vessel limits construction, transportation, & installation costs Delivers 125 MWe per reactor (up to 750MWe) 5 year run length, 60 year plant life Next generation clean energy - no CO2 emissions

4. The Vietnam Power Market Actual demand for electricity grew 15% per annum during 1995 – 2005 Demand forecasted to grow 17-20% per year during 2007 – 2015 Government objective to diversify sources of power generation Commitment to open competitive market electricity market by 2022 Vietnam Electricity Production and Sales Forecast Source: Sixth Master Plan – EVN, November 2007

5. The Risks Political / Regulatory Devaluating currency – Goal 1% a year – 20% during 2005-2010 Government Stability Expropriation Risk Corruption Nuclear Regulations FIXED EXCHANGE RATES FREE CAPITAL FLOW NO MONETARY POLICY Economic Regulated price of power in Dong Moving to retail market: ↑ Prices Price of Uranium in $ Competition from other countries/ companies But large demand Technological New technology Nuclear supply Nuclear disposal Substitutes – Wind, solar, hydro Transmission line infrastructure Vietnam is Export Market Oriented Weak Currency Stable Exchange Rates But Vietnam Attempts to Influence Interest Rates

6. The Recommendation - Consistent with corporate strategy and objectives – International presence – SE Asia – Market seeking Growing economic market – Increasing demand for power – Movement towards clean energy and decline of oil/gas resources Let’s Do It! B&W mPOWER TM reactor appropriate for Vietnam – Flexibility in power generation – Minimizes capital infrastructure and labor demand Rewards outweigh risks – Political stability – Assumed credible commitment to open markets and devaluation