Taste of US investors

Renewable energy, high technology industries, supporting industries… are areas that are interested by US investors when they come to set up company in Vietnam.

One of the “hot” issues that US businesses and investors interested in is the issue of cooperation and investment in the field of renewable energy. According to Mr Freb Burke from Baker & McKenzie, renewable energy is currently the most attractive investment area. Vietnam will avoid the construction of thermal power plants when moving to invest in wind and solar power plants.

In addition, many multinational corporations have strict environmental standards and they want these standards to be applied globally. Manufacturers also want to produce consumer goods using clean energy. For example, Apple is making a commitment to achieve 100% clean energy in their global supply chain. Hence, if Vietnam wants to attract investors like Apple, Vietnam should produce enough renewable energy to meet their needs.

According to Mr Burke’s explanation, renewable energy secures energy and environment security for Vietnam, helping Vietnam tap its potential and export energy. Renewable power plants attract the interest of US businesses like First Solar and GE. Furthermore, Vietnam has just raised its electricity purchase price to 9.35 UScent per kWh. This is a relatively attractive price for foreign investors due to the reduction in the price of wind and solar power along with the development of technology. However, Vietnam needs long-term guarantees for investors to borrow from banks and invest.

Moreover, the American Chamber of Commerce in Vietnam (AmCham) stated that the Association and its partners are proposing a Production Energy Plan in Vietnam to provide a needed road map for reforms, in order to attract investors, equipment suppliers, manufacturers and operators from the United States.

In addition, many US investors have also expressed their interest in intelligent cities, waste treatment projects, high-tech industries… Many businesses say that despite the United States withdrawal from the TPP agreement, trade relations between Vietnam and United States will continue to develop strongly in the future.

In fact, in recent times, high technology and supporting industries have attracted more projects of US investors. According to the owner of Saigon Silicon Project, after the construction of the project in Saigon Hi-Tech Park in the second half of 2016, up to now, many US investors have expressed their plan to implement projects here. It is planned that after completion of the infrastructure, the project can attract about 20 projects operating in the field of high tech and supporting industries, with investment capital of about 1.5 billion USD.

Meanwhile, a group of US scientists and businesses have recently reached an initial agreement on implementing a smart glass production project in Long An province with a billion dollar investment capital. This is a high-tech manufacturing project and about 90% of the output will be exported.

According to businesses, the results of investment attraction is not worth the potential of the two countries. Currently, the United States ranks 9th among foreign investors in Vietnam, with an investment of about 10 billion USD according to registered statistics from the United States. However, if we count the investment from the United States through third countries, the investment capital must be greater, for example, the Intel project has investment of more than 1 billion USD, but the investment capital is registered from the enterprise based in Netherlands.

Another good news is that, during the US visit of Vietnam Prime Minister Nguyen Xuan Phuc at the end of May 2017, US and Vietnamese businesses have signed contracts worth tens of billions of dollars in many fields. Therefore, according to businesses, if the bottlenecks, especially the regulatory and framework issues on investment are improved, the flow of investment from the United States is likely to increase in the coming time.

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Vietnam Welcomes Trillion Renewable Energy Projects

The number of renewable energy projects with total investment capital of about 1,200 – 1,400 billion VND is constantly increasing, confirming that investment in Vietnam renewable energy is an attractive trend.

Recently, the People’s Committee of Binh Thuan Province has handed the decision and received commitment to invest in renewable energy of 20 enterprises in order to diversify the form of energy production, step by step achieving the goal of becoming a large national energy center of the country in the next few years.

Currently, Binh Thuan and Ninh Thuan are the two leading provinces in attracting investment in renewable energy because most of the area has an average radiation intensity of about 5 kWh per square meter, less rainfall and hours of sunshine always maintained at an ideal level.

Although the natural conditions are not as favorable as Binh Thuan and Ninh Thuan, some neighboring provinces such as Khanh Hoa, Quang Tri, Binh Dinh… also attract many domestic and foreign enterprises committed to pour capital.

Most recently, Fujiwara (Japan) also received license to invest in solar and wind power plants in Binh Dinh with total capital of 1,446 billion VND. According to the investment registration progress, the project will be implemented right in 2017 and is expected to complete the first phase in the first quarter 2019.

Recently, more and more businesses outside the industry have not hidden their ambition to enter the renewable energy sector. According to Deputy General Director of Bamboo Capital, the company plans to raise 300 million USD through issuing bonds and certificates with rights to buy shares held in period from 2017 to 2020. In which, about 100 million USD will be poured into renewable energy projects.

According to this year’s plan, the company will promote the procedure to build a 140 MW solar power plant in Long An province. In addition, the company is seeking investment opportunity in solar power projects in Phu Ninh (Quang Nam) and Ninh Thuan, while taking advantage of international relations to attract capital and experiences from foreign investors.

Furthermore, Bamboo Capital expects to officially sell electricity and record revenue from the energy segment by 2018. By 2020, this segment will be able to deliver significant revenue streams to the company.

Explaining the fact that businesses are racing to plan, commit to invest and directly invest in renewable energy sector, the Renewable Energy Center (under The Energy Institute) thinks that it comes from many factors. First of all, the demand for energy is rising, while the supply of fossil fuels is becoming more expensive and exhausting.

In addition, the technology enters the ripe stage, making business easier to access, while reducing the difference in levelized cost of electricity (LCOE) compared to thermal power. A few years ago, the cost of producing wind electricity was about 3,500 VND per kWh and now it drops to 2,200 – 2,500 VND.

Moreover, the incentive mechanism for the development of solar power projects issued in April this year has also influenced the investment decisions of enterprises. Currently, the purchase price of electricity at the power point is 2,086 VND (equivalent to 9.35 cents/kWh).

In addition, investors are also entitled to many tax incentives such as import tax exemption for imported goods to create fixed assets, exempt from land use fees, land rent, water surface rent at the construction location, lines, substations connected to the grid. In the short term, it is likely that the Government of Vietnam will also consider increasing wind power prices to assist businesses, boosting investment to achieve a total capacity of 6,000 MW by 2030.

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Potential of Vietnam’s Renewable Energy

Potential of Vietnam’s Renewable Energy

Vietnam territory is located in the tropical climate zone with over 3,200 km long coastline. Therefore, there is great potential for renewable energy development. The available renewable energy sources in Vietnamare: solar energy, wind energy, biological energy, hydropower and energy from the sea.

Vietnam has great potential for hydroelectric power, with total theoretical capacity of about 35 GW, the technical potential is about 26 GW, annually it can produce more than 100 GWh; in which the small hydropower (the installed machine capacity <30 MW) has the potential to produce about 15-20 GWh of electricity.

Until 2013, the total number of projects have been put into operation is 268 projects, with a total installed machine capacity of 14,240.5 MW. As planned, until 2017, there will be 473 projects will be put into operation with a total installed machine capacity of 21,229.3 MW. In addition, according to the Electricity Corporation of Vietnam, the potential of small hydropower has installed machine capacity of about 4,000 MW.

In a report of the World Bank in 2001, the wind energy potential of Vietnam is estimated at 512 GW, much higher compared to other countries such as Thailand, Laos and Cambodia.

Vietnam has great potential for solar energy, particularly in the Central and South of the country, with the average intensity of solar radiation of about 5 kWh/m2. The total theoretical potential of solar energy in Vietnam is estimated at 43.9 billion TOE (TOE – tons of oil equivalent).

With the advantage of being an agricultural country, Vietnam has a large and diverse biomass sources, including wood, firewood, rice husk, rice straw, sugarcane bagasse and other kind of agricultural residues. Annually, Vietnam is estimated to have over 60 million tons of biomass from agricultural waste. The biomass energy sources mentioned above can be used to produce bio-fuel (ethanol), fuel pellet, biogas and various other products.

Vietnam livestock industry is now quite developed, released to the environment annually a large amount of livestock waste in the form of solid and liquid.

According to the statistic data from national environmental status by 2014, the amount of solid waste from livestock in 2013 in Vietnam includes: 18.5 million tons from raising cows, 13.8 million tons from raising buffalo, 18.9 million tons from raising pig, 22.6 million tons from raising poultry. Part of livestock waste in rural area of Vietnam provides raw material for more than half a million active biogas in three regions of the country.

With a population of nearly 90 million people, the annually amount of domestic waste generated due to activities of the population is very huge. Domestic waste after being collected and classified can be recycled, reused and recovered energy from waste incineration or landfills.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Japanese Businesses Want to Invest in Solar Power Plant in Thanh Hoa

Mr. Fernando Davila, Managing Director of Univergy Solar Joint Stock Company – a company in renewable energy, solar and wind power sector in Japan, had a meeting with leaders of Thanh Hoa People’s Committee.

At the meeting, Mr. Fernando Davila said that in the coming time, Univergy Solar Company would like to implement the solar power plant project in Kien Tho commune, Ngoc Lac district, Thanh Hoa province with high capacity. It is hoped to receive the support from the local authorities as well as the Government of Vietnam.

Univergy Solar – a joint venture of Japan and Spain, is currently the world’s leading developer of renewable energy – solar power, wind power, small power stations and geothermal energy in Japan. Currently, Univergy Solar has developed more than 1,200 MW of global wind and solar power capacity.

On behalf of the leadership of Thanh Hoa province, Mr. Nguyen Dinh Xung, Chairman of the provincial People’s Committee thanked the delegation for visiting and exploring investment promotion in the province. At the same time, the province pledges to support and create favorable conditions for Univergy Solar as well as other investors when investing in local projects.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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