Tiếng ViệtVietnam is blessed with a tropical monsoon geographical location, a dense river system, high sunshine hours all year round and a large sea area. According to the Ministry of Industry and Trade, Vietnam’s renewable energy development potential can reach hundreds of GW, of which solar energy and wind energy account for the largest proportion. These outstanding advantages not only bring about sustainable development opportunities but also become key factors in attracting foreign direct investment (FDI) flows.
The Vietnamese government has implemented many preferential policies to promote investment in renewable energy. Incentives include corporate income tax exemption for the first 4 years, 50% reduction for the next 9 years and preferential tax rate of 10% for 15 years. In addition, the government also supports preferential loans from development banks and establishes a preferential Feed-in Tariff (FIT) mechanism for renewable energy. This creates an attractive investment environment, ensuring long-term benefits for investors.
According to the Power Plan VIII, the goal by 2030 is for 50% of office buildings and 50% of households to use rooftop solar power for self-consumption. With this orientation, the rooftop solar power segment promises to develop strongly, opening up great opportunities for domestic and foreign enterprises to participate and effectively exploit market potential.
FDI Capital Flows Into Renewable Energy
Vietnam is currently one of the leading countries attracting FDI in the renewable energy sector in Southeast Asia. From 2015 to 2022, the total FDI capital in this sector reached 106.8 billion USD. Of which, 60% of the projects are developed by domestic enterprises, 27% are cooperation between Vietnamese and international enterprises, and the remaining 12% are fully owned by foreign investors. Typical projects such as Bac Lieu offshore wind power with an investment capital of more than 4 billion USD and Thien Tan solar power in Ninh Thuan with an investment capital of more than 1 billion USD have demonstrated Vietnam’s strong attraction to global investors.
Despite its great potential, Vietnam still faces a number of challenges in developing renewable energy. High initial investment capital is a major obstacle, especially for offshore wind projects that require 2-3 million USD/MW. In addition, the power transmission infrastructure has not been able to meet the demand as renewable energy projects increase. To overcome this, Vietnam needs to promote international cooperation, reform administrative procedures and invest in smart grid systems.
Renewable energy is not only the key for Vietnam to solve environmental and energy problems but also a tool to attract strong FDI flows. With great potential, preferential policies and the attention of the international community, Vietnam can completely become the leading renewable energy development center in the region. Focusing on building an attractive and stable investment environment will be a strategic step to maximize this opportunity.