Vietnam should work to remove obstacles that have hindered private investment in the energy sector, a push to achieve double-digit economic growth target, according to insiders.
Dr. Nguyen Sy Dung, Former Vice Chairman of the National Assembly’s Office, said that for every 1% increase in GDP, electricity production by grow by 2%.
The Politburo established a framework for private participation with the issuance of Resolution 55-NQ/TW on February 2020, outlining Vietnam’s energy development strategy until 2030 with a vision to 2045. The resolution underscored encouragement and facilitation of conditions for all economic sectors, particularly the private one, to engage in the nation’s energy development.
Other legislations such as the Electricity Law and the Law on Investment also address private sector involvement in the process.
Vu Quynh Le, Deputy Director of the Ministry of Planning and Investment’s Department of Bidding Management, said that the noted that the Law on Public – Private Partnership Investment in 2020 has created a legal corridor to attract private investment in energy projects.
To date, 19 Build-Operate-Transfer (BOT) energy projects have been established with a combined capacity of 27,000 MW and nearly 2 trillion USD in capital. Of these, two projects have been transferred to state-owned Vietnam Electricity (EVN) while contracts have been signed for ten others, she added.
According to Philip Timothy Rose, Director of the Southeast Asia Energy Transition Partnership, it is necessary to promote private sector’s participation, particularly given that Vietnam's projected investment needs for electricity development between 2021 and 2030 exceed 134 billion USD.
However, Dung pointed out persistent barriers related to investment policies, energy infrastructure, administrative procedures, and capital access opportunities.
Besides, experts also noted that private investors face significant risks due to large capital requirements and slow returns on investment. Most private Vietnamese businesses are small, medium, or micro enterprises, making access to sufficient funding extremely challenging.
Assoc.Prof.Dr. Nguyen Thi Nhung from the University of Economics and Business under the Vietnam National University, Hanoi advocated resolving policy and legal issues to strengthen investor confidence in renewable energy projects. She recommended establishing pricing frameworks for renewable energy projects and developing preferential tax and fee policies for green investments generally and renewable energy projects specifically.
Nhung also proposed prioritising domestic capital by promoting corporate and green bonds, while building a comprehensive monitoring system to evaluate funding effectiveness, with special focus on green capital flows.
In the same vein, Dr. Le Xuan Nghia, member of the National Council for Financial and Monetary Policy Consultation, suggested the Government pen measures to encourage all enterprises to use energy efficiently rather than focusing on wind or solar power investments. He recommended policies that encourage private firms to invest across all energy types, including wind, solar, nuclear, and gas.
