Vietnam Prime Minister (PM) Pham Minh Chinh has called on banks to provide preferential loans with extended repayment periods to attract foreign investors to develop green power projects in the country, as reported by Bloomberg on March 19. This request came in response to a petition sent to the PM and other officials on March 14 by renewable energy companies, which urged the Vietnamese government to modify price policies to avoid bankruptcy of generators and better attract investors. According to the petition, the current electricity pricing policies “have deeply unnerved” investors. PM Chinh stated that the government needs to hear the difficulties and losses of wind and solar energy investors to devise a harmonious pricing mechanism for both two sides. 

The petition expressed shared concerns of 36 wind and solar companies that the instability of clean energy development policies will undermine the government’s ability to attract foreign investment. Under Vietnam’s energy-pricing mechanism called feed-in-tariffs (FIT), which is a government policy to promote renewable energy development, the state-owned Vietnam Electricity Group (EVN) is required to purchase renewable power from renewable developers at prices higher than that for coal-fired power. However, to qualify for favorable pricing, wind and solar power projects need to start commercial operations by the end of 2021 and 2020, respectively. About 84 projects missed the deadline due to the disruption caused by the COVID-19 pandemic. To avert bankruptcy, these developers also asked the government for approval to immediately begin providing power to the grid, and new rules to enable generators to sell energy directly to end-users. 

Sources:

https://www.bloomberg.com/news/articles/2023-03-19/vietnam-premier-urges-banks-to-give-cheaper-green-power-loans

https://www.businesstimes.com.sg/international/asean/green-energy-investors-demand-vietnam-speed-policy-changes