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Vietnam is a country with enormous potential: in recent years it has seen rapid expansion in terms of wind and solar power, while it is one of the fastest growing markets when it comes to electricity demand. Not only that, it has a vibrant economy and a young, numerate population.
EGP Vietnam (EGPVN) was officially established in December 2021 with a core team to develop a renewable energy project pipeline that will enable it to contribute to the energy transition in Vietnam. While the Business Development team, which is largely based out of our Singapore office, had been scouting the market since 2016, a local team was needed to bring the pipeline projects to a level that was ready for investment.
The company have a target of commissioning its first utility-scale renewable energy power plant by 2024. To reach this goal, around 5692 MW of projects is ready in their pipeline, out of which 915 MW are at an advanced stage. The company also has set a target of increasing this advanced-stage pipeline to 1600MW by the end of the year.
Vietnam has been an economic success story, achieving double-digit GDP growth for more than two decades. With a burgeoning manufacturing industry and a growing middle class, it has also been one of the fastest-growing markets in terms of electricity demand. Furthermore, with a median age of 32, Vietnam also boasts a young and vibrant population that’s eager to grow and improve its quality of life.
Vietnam has become a leader in renewable energy growth in recent years. Since 2018, there has been a boom in both solar and wind energy, with more than 22,000 MW being installed in the last four years. As such, Vietnam’s government, industry, and workforce have shown their ability to oversee such growth.
Vietnam is one of the fastest-growing markets in the world, both in terms of GDP and electricity demand. While it has already achieved impressive growth, with more than 22 GW installed in the past four years, it will need an even more ambitious growth trajectory to realize its goal of net-zero (carbon neutrality) by 2050. It is expected to need more than 150 GW of renewable energy by 2045.
The Head of Business Development for the Asia-Pacific region, Chung Gu Yoon of EGP said, “We believe that Vietnam could potentially become EGP’s largest market in the Asia Pacific following India. To give you an idea, achieving a 10% market share in Vietnam would mean reaching an installed capacity of 6 GW by 2030.”
The Vietnam government has been implementing a long-term plan to restructure its power sector. It has already introduced a wholesale electricity market and has begun the process of unbundling its generation sector. In the future, it is planning to further deregulate the distribution and retail sectors. This may open further opportunities for Enel’s other business lines to enter the market and create further value.
He added, “We recently signed an agreement to secure our first project (solar PV, 160 MW) which we expect to be investment-ready over the next 6 to 12 months. This required extensive negotiations with a local partner and due diligence for both commercial and technical issues. This involved the entire team (BD, E&C, Procurement, Legal) to ensure the project’s viability and for our local partner to have the confidence that we can provide value to such a near-term opportunity.”
He concluded, “Securing this project will give visibility in implementing our first renewable energy project in Vietnam when the next remuneration regulatory scheme will be announced in the coming months.”