Ensuring power supply - a key factor for FDI enterprises to invest in Vietnam

DNHN - According to AmCham, the main demand of all businesses and any future investors is the demand for stability in energy supply and immediate access to renewable energy.

On March 19, Prime Minister Pham Minh Chinh attended the 2024 Annual Meeting with the Foreign Direct Investment (FDI) Business Community and the Vietnam Business Forum (VBF) in Hanoi. Discussing in the forum, representatives of the associations pointed out concerns that make foreign businesses cautious about investing in Vietnam.

Speaking at the conference, Chairman of the Korean Chamber of Commerce in Vietnam (Kocham) Hong Sun said that in June-July 2023, many provinces in the North such as Bac Ninh, Hai Duong, Ha Nam, Phu Tho and Vinh Phuc experienced power shortages. Some industrial parks have carried out pre-announced power outages with a frequency of about 1-2 times/week.

Mr Hong Sun assessed that Korean businesses, especially semiconductor businesses, are currently very interested in industries that use a lot of technology, in line with the environmentally friendly trend such as rooftop solar power. However, they are hesitant to invest in Vietnam due to unstable electricity supply and unclear related legal regulations.

A representative of the Japanese Chamber of Commerce and Industry (JCCI) said that the power outage in the North last year was serious, affecting production planning and delivery date forecasting.

That is also the issue that the representative of the American Chamber of Commerce in Vietnam (AmCham) expressed concern about. Without a stable, affordable and sustainable electricity supply, many goals will be difficult to achieve. The main demand of all businesses and any future investors is the demand for stability in energy supply and immediate access to renewable energy. Public-private partnerships are essential to develop sustainable, reliable and affordable electricity sources.

“Vietnam can attract global finance thanks to an effective energy management system. AmCham encourages continued dialogue between the Ministry of Industry and Trade, the Vietnam Electricity Group and stakeholders in the private sector to come up with feasible short-term and long-term solutions so that Vietnam can meet its energy security needs. Regulatory uncertainties need to be removed, with a renewed focus on approving near-term projects that are practical and financially viable, to ensure that electricity supply keeps pace with the rising demand here,” said the AmCham Chairman.

Intending to enable manufacturing businesses to operate smoothly, and stabilising the electricity supply for industrial parks, JCCI sent 3 proposals to the Vietnamese Government, including issuing an advance notice of power outages; electricity saving requirements to have enough time to adjust; introducing incentive mechanisms to encourage companies to save electricity and generate electricity.

Mr Joseph Uddo - Chairman of the American Chamber of Commerce in Vietnam (AmCham) welcomed the Government’s focus on supply chain growth, attracting investment and high-tech manufacturing. However, without a stable, affordable and sustainable electricity supply, many goals will be difficult to achieve.

Mr Denzel Eades - Vice Chairman of the British Chamber of Commerce in Vietnam (Britcham) recommended that the Government accelerate the Power Development Plan VIII, especially related to the development of LNG, solar and wind power along with building legal regulations that allow for implementation, such as regulations related to DPPA.

In response to the concerns of FDI enterprises, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that the ministry is making efforts to provide sufficient, stable electricity and is committed to no power shortages this year and in the following years.

P.V