Energy industry receiving more foreign attention

The number and role of non-State enterprises in the energy industry are increasing, the “Improving the role of private investment in green development in the period of 2021-2030” conference, held on November 3 by the Central Institute for Economic Management (CIEM) and the German Corporation for International Cooperation (GIZ), heard.

A CIEM report shows that the number of foreign firms in Vietnam’s energy industry has increased greatly, from 69 in 2010 to 777 in 2019.
The proportion of non-State enterprises rose from 59 per cent to 94.8 per cent during the 2010-2019 period.

Total investment by non-State enterprises has increased steadily thanks to the FIT (feed-in tariff) price policy. Capital going to renewable energy in 2019 was up 27-fold compared to 2010, from VND166 billion ($7.3 million) to VND4.49 trillion ($197.44 million).

In contrast to strong capital growth, the revenue of non-State enterprises is not commensurate with the number of enterprises in the industry, especially in the energy sector. The revenue structure accounted for only 20.3 per cent in 2010, 17 per cent in 2015, and 29.4 per cent in 2019; significantly lower than the State sector.

In addition, according to Mr. Ho Cong Hoa, Deputy Director of the Social Affairs Research Department at CIEM, the scale of non-State enterprises is getting smaller and is already smaller than State-owned enterprises.
Meanwhile, mechanisms and legal corridors to mobilize private investment for green growth are unstable and complex, while completing legal procedures take a long time.

In order to attract all private investment resources to invest in green growth in the 2021-2030 period, especially in the field of renewable energy, CIEM believes that many solutions need to be implemented.