Power-hungry Vietnam scrapped plans for two multi-billion dollar nuclear power plants on Tuesday, citing environmental and financial reasons after the cost of the projects skyrocketed.

The two plants in central Ninh Thuan province would have had a combined capacity of 4,000 megawatts and were to be developed with assistance from Russian state company Rosatom and the Japanese consortium JINED.

The cost of the nuclear power plants, slated to be the first in Southeast Asia, doubled since they were first tabled in 2009 to an estimated $18 billion, officials said earlier.

The government said costs mushroomed as developers sought more advanced technology following Japan's Fukushima nuclear disaster in 2011.

"The project was suspended not due to technological reasons, but the country's current economic situation," the government said on its website.

Vietnam is grappling with a mounting budget deficit and has said it is likely to fall short of its ambitious growth target of 6.7 percent this year.

The government said it would spend money on other infrastructure projects instead and address climate change issues.

Though nuclear power does not produce harmful carbon emissions, environmentalists have raised concerns about nuclear waste storage.

Rapidly industrialising Vietnam, with its population of 93 million, has faced power shortages in recent years and turned to neighbouring countries like Laos to boost its energy reserves.

The government said scrapping the huge nuclear projects would not affect much-needed power supplies.

"The project suspension will not undermine the country's power supply security," it said.

The communist country relies mostly on coal and hydropower, but has said it wants to increase renewable energy production in the next 15 years.

Rosatom noted a "long-lasting" history of successful cooperation between Russia and Vietnam in the nuclear power industry.

"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," the company said in a statement.