Foreign investors concerned over power shortages

By Phuong Anh - Mar 19, 2024 | 04:25 PM GMT+7

TheLEADERThe primary concern of any investor lies in the energy reliability and immediate access to renewable energy.

Hong Sun, Chairman of the Korean Business Association in Vietnam, voiced the eagerness of Korean enterprises, particularly those in high-tech sectors such as semiconductors, to invest in Vietnam.

However, he revealed at Vietnam Business Forum held this morning that Korean investors are hesitant due to apprehensions regarding potential power shortages in Vietnam.

This sentiment is shared by other global companies in advanced industries that the Vietnamese government aims to attract.

He added that, Korean companies currently show keen interest in technology-intensive industries that align with environmental trends, such as rooftop solar power projects.

However, due to the unstable power supply and unclear regulations, they are reluctant to proceed with investments in these areas.

He proposed the establishment of effective measures for stable power supply within industrial zones, ensuring that foreign investment companies, including those from Korea, can engage in manufacturing activities with confidence.

Foreign investors concerned over power shortages
Hong Sun, Chairman of KoCham at the VBF 2024

Echoing this sentiment, Joseph Uddo, Chairman of the American Chamber of Commerce (AmCham) in Hanoi, emphasized the paramount importance of stable energy supply and immediate access to renewable sources for all businesses and future investors.

He advocates for collaborative approaches between public and private sectors to develop affordable, reliable, and sustainable electricity, enhancing the nation's competitive edge.

Furthermore, Vietnam can attract global financing with an effective energy regulatory system.

The AmCham representative recommends continued dialogue between the Ministry of Industry and Trade, the Electricity of Vietnam and private sector stakeholders to explore viable short-term and long-term solutions for Vietnam to meet its energy security needs.

This includes advancing approval of large liquified natural gas (LNG) projects that support energy security and transition goals.

Acknowledging the time-intensive nature of energy infrastructure development, Joseph Uddo underscores the urgency of planning for Vietnam's sustainable growth.

"We need to see regulatory uncertainties eliminated and a renewed focus on approving projects in the short term that are realistic and bankable to ensure power supply meets the growing demand here," he said.

AmCham further suggests the Vietnamese government to consider aligning power purchase agreements to international standards to enable multilateral organizations and development finance institutions to fund large projects for energy transition and the renewable energy sector. 

Joseph Uddo added that, current investors need more streamlined regulations to install and provide access to renewable energy, as many new investors and expansion projects need reliable access to renewable energy in order to invest in Vietnam. 

Key initiatives include the implementation of the national power development plan, the development of the decree on rooftop solar development, access for renewable energy in industrial zones, and the guidance on the direct power purchase agreement mechanism.