Over the past few years in Vietnam, policy officials have sanctioned an increase in incentives, as well as a reduction in red-tape for investments in renewable energy projects in an attempt to drum up more interest from both domestic and foreign investors to put money into renewable energy projects. While the stock market has restrictions on foreign ownership of equity instruments, barriers to investment from overseas sources are less stringent in relation to renewable energy investment.
Solar power projects tend to dominate the headlines, but the last week has seen three new wind power related deals struck by investors and Vietnam in a bid to drive the economy towards more sustainable energy sources. The first was announced by Spain-based Siemens Gamesa Renewable Energy SA, who secured a contract to construct a 78-megawatt (MW) nearshore wind farm off the coast of the Tra Vinh province, which will be Vietnam’s largest nearshore wind farm project.
The second was a Memorandum of Understanding (MOU), also known as the “La Gan Project“, between Copenhagen Infrastructure Partners (CIP) and Vietnamese companies Asiapetro and Novasia Energy. The total power output of the offshore wind farm will exceed 3,000 MW by 2030 and cost USD 10 billion.
The final announcement is the government-approved construction of two wind farms in the Hoa Bind district of the Mekong Delta province, costing nearly USD 1 billion in investment. The province is currently a hot-spot for both wind and solar investments.
Vietnam’s push towards a greener future will also be viewed positively by the international investment community given the recent surge in demand for investments that are deemed to fulfill a variety of Environmental, Social and Governance (ESG) criterion. While the ESG push is concentrated around developed market assets, there is no doubt that Emerging and Frontier Markets investments will be placed under the microscope and Vietnam will be in a solid position to take advantage of it.