By Mai Nguyen and Ho Binh Minh
HANOI (Reuters) - Vietnam's National Assembly voted on Tuesday to abandon plans to build two multi-billion-dollar nuclear power plants with Russia and Japan, after officials cited lower demand forecasts, rising costs and safety concerns.
The vote to scrap the country's first atomic energy project deals a blow to the global nuclear business and to Japan's drive to begin exporting reactors after the Fukushima disaster left its nuclear industry in a deep freeze.
The Vietnamese government said in a statement that the decision, made in a closed session of parliament after discussion of a government proposal, was taken for economic reasons and not because of any technological considerations.
Russia's Rosatom and a consortium of Japanese firms led by private utility Japan Atomic Power [JATOM.UL] were due to build the plants.
The estimated investment needed for the projects had doubled since 2009 to nearly 400 trillion dong ($18 billion), state media Tien Phong quoted Le Hong Tinh, vice chairman of the National Assembly's science, technology and environment commission, as saying earlier this month.
The Vietnamese government is fiscally strapped as public debt lingers near the permitted limit, curbing its ability to maintain Vietnam as one of Asia's fastest-growing economies through spending.
Growth in power demand in Vietnam is also forecast to slacken.
When the government approved plans for the two plants in 2009, growth in Vietnam's annual power demand was projected at 17-20 percent.
Duong Quang Thanh, chairman of state utility Vietnam Electricity group, was quoted by state-run Voice of Vietnam radio recently as saying that annual growth between 2016 and 2020 was now forecast at 11 percent, and 7-8 percent through 2030.
Vietnam's decision to scrap the project is a further setback for the nuclear industry as countries from Germany to Indonesia have decided to either pull out of nuclear energy or cancel development plans in the wake of the Fukushima nuclear disaster in Japan in 2011, the world's worst since Chernobyl in 1986.
Environmental campaign group Greenpeace, however, welcomed the decision to drop the nuclear plan, saying it would have been a waste of money when renewable energy alternatives are available.
"The project could also pose an environmental threat, and Vietnam cannot afford to risk another disaster after a toxic industrial leak triggered mass fish deaths earlier this year," Greenpeace Regional Campaign Coordinator Arif Fiyanto told Reuters.
A toxic leak sullied over 200 km (125 miles) of coastline in April. The country's worst environmental disaster, it killed more than 100 tonnes of fish and left thousands jobless.
The Japanese and Russian nuclear plants were due to have been located in central Ninh Thuan province. They would have had a combined capacity of 4,000 megawatts.
"We respect our customer's position, and we are ready to provide the full support to Vietnam when the country continues the implementation of its national nuclear power program," Russia's Rosatom said in an emailed comment.
Rosatom, however, is not fully pulling out of Vietnam. The state-run company said it would continue taking part in developing nuclear technologies and infrastructure, which should support peaceful nuclear energy in Vietnam, it said without elaborating.
(Additional reporting by My Pham in Hanoi and Svetlana Burmistrova in Moscow; Editing by John Chalmers and Susan Fenton)