Investors line for solar power projects in Vietnam

In October of this year, BIM Group, a diversified conglomerate based in Halong City, Quang Ninh Province, recruited a senior staff for the renewable energy sector.

BIM Group had planned to develop a 500MW wind power project in Ninh Thuan province; however, under a new plan, 2,300 hectares of land will be used to develop a solar power project with a total capacity of 1,000MW.

The new plan includes three phases including a 40MW plant built in 2017-2018 period, two projects with a total capacity of 350MW developed in the 2018-2019 period, and the project with the capacity of more than 500MW will be deployed after 2019.

Well-known corporation in the real estate, tourism and hotels sectors, BIM Group also invested heavily in food and foodstuffs. In particular, the group owns the largest salt field in Southeast Asia with an area of 2,500 hectares in Ninh Thuan province and capacity of 200,000 tonnes of salt per year.

In addition to BIM, many other companies are looking to invest in solar projects in the south-central provinces, which have the highest average annual sunshine hours per year in Vietnam.

The race to develop these projects has been ascribed to Resolution No. 11 on encouraging the development of solar power projects. Under the resolution, investors will be given preferential treatment on taxes, capital, land rental, etc. The price of solar electricity for EVN will be at 9.35 UScent/KWh, which is considerably higher than the average retail price of US$7.3/ kWh.

Thanh Thanh Cong Sugarcane Corporation in mid-2017 announced to invest about US$1 billion to develop 20 solar power plants in Vietnam with the total expected capacity of 1,000MW. The Corporation will develop some other projects in the fourth quarter of this year.

Meanwhile, Bamboo Capital, a Vietnamese company, has cooperated with Hanwha corporation of South Korea, Unisun Energy of HongKong and Coara Solar of Germany to invest in two solar power plants in Long An district with a total capacity of 140MW. The company is proposing some solar projects in Gia Lai with the capacity of 400MW.

Recently, US Agency for International Development (USAID), a sponsor of the Vietnam Low Energy Efficiency Program (V-LEEP), has signed a memorandum of understanding (MOU) on the development of the US$213 million Tinh Bien solar power project invested by Sao Mai Group with the total capacity of 210MW.

Earlier, Japan's Fujiwara Company was also granted a license to invest in a 100MW power project worth US$64 million in Binh Dinh province. The projects’s first phase , with 64MW capacity, is expected to be completed in 2019.

Additionally, Electricity of Vietnam (EVN) and its subsidiaries are implementing the preparation for 23 projects with the total capacity of 3,100MW. Moreover, this is only a partial list of projects in the pipeline.

In the latest electricity planning, Vietnam’s target for the solar energy development for 2020 is 850 MW, for 2015 is 4,000MW and for 2030 is 12,000 MW. However, electricity from solar power still accounts for a very small proportion of the total electricity in Vietnam.

According to USAID, in July 2017, there were hundreds of solar projects registered in Vietnam with the total capacity of 17,000MW. Ninh Thuan province has a great potential for the development of solar power, attracting about 140 projects. Meanwhile, Binh Thuan province has attracted about 100 projects, and Dak Lak and Khanh Hoa have drawn 13 and 12 projects respectively.

With the increasing demand for electricity, the cost of solar power investment has diminished, prompting both domestic and foreign investors to pour money into this sector in Vietnam. Many foreign corporations, including financial investors and experienced solar power developers, are dominating the market by purchasing shares or applying for direct licenses to invest.