Attracting investment in renewable energy – Driving the green economy

DNHN - In addition to attracting capital, proactive land-use policies and comprehensive implementation plans will contribute to ensuring the sustainable development of the renewable energy sector.

In the draft implementation plan for Power Development Plan VIII, Vietnam aims to attract approximately $135 billion for investment and construction of power projects by 2030. The government has approved the Renewable Energy Development Strategy for 2030, with a vision toward 2050, targeting renewable energy sources to account for about 25% of the electricity mix by 2030 and 45% by 2050.

However, mobilizing capital for the renewable energy transition remains a significant challenge. Many countries worldwide have implemented various measures to support this process, ranging from financial policies and green taxes to stringent environmental standards. Incentives such as subsidies and preferential loans are also widely applied to promote green investment.

In Germany, the government has invested €2.5 billion in electric vehicle infrastructure and provides a €9,000 subsidy per vehicle to accelerate the energy transition. Meanwhile, in Shenzhen, China, three major bus companies receive $75,500 annually for each electric bus to encourage the replacement of fossil fuel-powered vehicles. These policies have played a crucial role in reducing pollution and promoting the green economy.

In Vietnam, thanks to the solar power feed-in tariff program, rooftop solar capacity has increased by 2,435% since early 2019. Additionally, the government is discussing amendments to the Electricity Law to create a favorable legal framework for renewable energy investment. However, many challenges remain. According to Ms. Sunita Dubey, Country Representative of the Global Energy Alliance for People and Planet (GEAPP), policy and regulatory uncertainties have caused hesitation among investors, while mobilizing capital for large-scale projects remains a significant barrier.

Mr. Nguyen Xuan Thang, Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham Vietnam), emphasized at the 2024 Legal Support for Investment Forum that delays in issuing regulations and implementation guidelines have created difficulties for businesses, especially investors operating solar power projects after 2020. This has led to cautious sentiment, affecting the ability to expand and deploy new projects.

To address these challenges, Vietnam needs to establish a clear legal framework and transparent investment roadmap to build trust and reduce risks for investors. Additionally, adopting blended finance models, green bonds, and collaborating with financial institutions can help bridge the funding gap. At the same time, proactive land-use policies and comprehensive implementation plans will contribute to ensuring the sustainable development of the renewable energy sector.

By combining infrastructure upgrades, policy reforms, and comprehensive investment strategies, Vietnam can optimize the process of attracting capital, driving green economic growth, and accelerating the renewable energy transition.

Anh Nguyen