Private investors key to develop Vietnam’s energy market
It is estimated between now and 2030, Vietnam’s electricity sector requires new investments of about US$10 billion annually, higher than the average of US$8 billion for the 2011–2015 period.
The vast majority of new gas and electricity investments will need to come from private investors, especially foreign ones, to help Vietnam further develop its energy industry, experts said.
Vietnam’s power industry needs US$10 billion new investment annually
|
It is estimated between now and 2030, Vietnam’s electricity sector requires new investments of about US$10 billion annually, higher than the average of US$8 billion for the 2011–2015 period. Meanwhile, the development of the gas sector is estimated to require about US$20 billion between 2015 and 2035.
Vietnam’s energy industry has significantly attracted private investors, especially foreign ones, in recent years. The investors poured US$3.4 billion in 10 electricity-generation projects in Vietnam in the first half of last year, of which nine used renewable energy sources, and one was a US$1.9-billion coal mega project.
The total accounted for 8 percent of global investment commitments in private participation in infrastructure in the period, making Vietnam the leader in attracting new electricity-generation projects.
Ousmane Dione, WB country director for Vietnam, said given the limited fiscal space and the reduction of concessional financing available going forward, it will be important for Vietnam to step up mobilizing alternative capital resources for the electricity and gas sectors.
More investment inflow
The private investment in the country’s energy industry is expected to further grow in the time to come as many foreign investors have so far shown their interest in the industry.
Ian Steff, US Deputy Assistant Secretary of Commerce for Manufacturing of the US Department of Commerce's International Trade Administration, said Vietnam’s energy market growth represents a great opportunity for US energy and energy-related exports, especially in LNG and advanced energy technologies. Therefore, many leading US energy companies have affirmed their support and investment in Vietnam to help the country meet its energy goals.
Major US energy companies such as AES, Alaska Gasline Development Corporation, Cheniere, Energy Capital Vietnam, Excelerate Energy, ExxonMobil and Marsh have expressed their willingness to assist Vietnam in achieving its energy goals.
US Ambassador to Vietnam Daniel Kritenbrink said US energy companies have been promoting contracts for Vietnam’s development of LNG-fueled power. Besides, the US government will also cooperate with Vietnam to design the country’s first direct power purchase agreement enabling private parties to enter into a direct contract for the procurement of renewable energy such as wind and solar power.
However, to lure more private capital in Vietnam’s energy, WB’s Country Director Dione recommended that the government should address comprehensively the constraints currently impeding the flows of domestic and cross border private capital into two of the most strategic segments of the Vietnamese economy.
The WB report also proposed a well-coordinated policy effort around three pillars, including the development of a major PPP/IPP (public-private-partnership/infrastructure private participation) program for new power generation, enhancement of the financial standing and credit worthiness of Vietnam Electricity (EVN) and PetroVietnam (PVN) to enable them to access commercial finance without government support; and increase of the availability of local currency financing which is critical for both project finance and corporate project finance, to remove constraints and maximize financing available for electricity and gas investments in Vietnam.
22:59, 2024/12/24
Hanoi to attract US$768 million in industrial parks in 2024
Companies in Hanoi highlighted the significant improvements in the business environment in Vietnam, particularly in the capital, where it has become easier to operate in the industrial zones.
21:35, 2024/12/21
Regulatory efforts underway to strengthen e-commerce in Vietnam
By 2025, Vietnam's e-commerce is expected to reach 10% of retail sales and contribute to the digital economy which is estimated to account for 20% of GDP.
16:51, 2024/12/14
Hanoi honors key industrial products in 2024
This recognition is a testament to the city government's ongoing support of local businesses.
18:09, 2024/12/12
EVs take the spotlight on Vietnam's urban streets
On the streets of Hanoi, a quiet but powerful shift in transportation is underway.
13:43, 2024/12/12
Hanoi names 83 institutions Green Energy User 2024
More than 80 facilities and projects have been recognized for their innovative use of green energy in manufacturing.
12:07, 2024/12/09
Bat Trang artisans innovate to meet global market demands
To boost competitiveness, Bat Trang pottery businesses leverage information technology for product promotion.
- Vietnam youth gears up for a greener future
- Hanoi to create over 213,000 jobs in Jan-Nov
- Update on worker conditions in South Korea from Vietnamese labor authorities
- Vietnam partners with NVIDIA to establish AI research center
- Hanoi grasps opportunities to drive semiconductor industry growth
- Internet users in Vietnam to hit 100 million by 2029