Vietnam Among the Top Five in Private Participation in Infrastructure Projects
According to a recent report by the World Bank, Vietnam ranks amongst the top five countries in private participation in infrastructure (PPI) projects in the first half of 2018. A total of 34 countries attracted investments, with China, Turkey, Vietnam, India, and Brazil being the top five, accounting for 66 percent of the total investment, up 10 percent compared to last year. This is the first time Vietnam has featured in the top five.
In the first half of 2018, investments totaled US$43.5 billion in 164 projects in areas such as energy, transport, information and communication (ICT), and water infrastructure, an increase of seven percent compared to first half of 2017.
Majority of the investments were in the East Asia and Pacific region, while Latin America and the Caribbean (LAC), and the Middle East and North Africa (MENA) witnessed their lowest and second-lowest levels of investment in the past decade.
Transport accounts for 57 percent of the total investments, while investments in water infrastructure increased three-fold and in energy decreased by 50 percent.
In the energy sector, there were a total of 84 electricity generation projects, with renewable energy accounting for 78 projects. Renewable energy alone accounted for 64 percent of the total investment in electricity generation and capacity, with solar accounting for majority of the projects.
Solar projects accounted for almost a third of the total investments in the sector across 49 projects in 23 countries. India led with six projects, followed by Brazil, Ukraine, and Vietnam with five projects each.
Investments in Vietnam
All the investments in Vietnam were in electricity-generation projects amounting to US$3.4 billion across 10 projects. Out of the 10 projects, nine projects were in the renewable energy sector, while one was a US$1.9 billion coal project, the Nghi Son-2 coal-fired power plant.
In the renewable energy sector, the two biggest projects were the Dau Tieng 1 and Dau Tieng 2 solar PV power plants and Bac Lieu Province Wind Power Plant (phase 3) worth US$397 million and US$390 million respectively.
In the first half of 2018, majority of the projects depended on commercial debt financing. Vietnam along accounted for 10 percent of the global commercial debt.
Going forward, as Vietnam focuses on reducing its dependence on coal-fired power plants and minimizing environmental and health effects, the renewable energy sector will continue to receive government support and majority of the investments.
Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices in China, Hong Kong, Indonesia, Singapore, Vietnam, India, and Russia.