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Can Vietnam's power plan generate US$170 bn of investment?

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08 June 2016

Can Vietnam's power plan generate US$170 bn of investment?

Report summary

Vietnam has an urgent need of power stemming from its position as South East Asia's fastest growing economy and poor track record of project delivery. In the revised PDP published in March 2016, power demand is forecast to grow three-fold in the next 15 years with an incremental capacity growth of 95 GW. With 68% of the capacity additions targeted for private sector participation, opportunities in Vietnam should be ample. Wood Mackenzie expects the power growth rate to be more moderate but still sees an investment requirement of close to US$ 90 billion by 2030.  Given the national utilities are financially stretched, the Vietnamese government is keen to improve the investment climate and has been working on a more favourable policy initiatives for private sector participation. We assess what's required to realise the opportunities in the revised PDP.

Table of contents

  • Executive summary
    • PDP has a history of over-estimating power demand (unlike Wood Mackenzie)
    • Reduced capacity build-up
    • Changes to the fuel mix – greater role for solar but coal continues to be favoured
      • Share for coal remains significant despite revision to demand
      • Gas demand is marginally squeezed despite additional capacity
      • Renewables can play a greater role with right level of incentives
      • Challenges to implementation
        • National companies are financially stretched
        • The aspirations for private investment do not reflect recent history
        • Implementation of feed-in-tariffs
      • How can private investors navigate the opportunities?
        • New regulations may start to provide some clarity
        • Developing gas plants is difficult and the government doesn't prioritise domestic gas
        • Coal plants face fewer hurdles than gas
      • What else is needed from the government?
      • Conclusion

Tables and charts

This report includes 9 images and tables including:

  • Investment requirements PDP VII vs Wood Mackenzie expectations
  • Power generation forecast
  • Power capacity forecast
  • 2015 generation forecast (from 2011) vs actual generation
  • Can Vietnam's power plan generate US$170 bn of investment?: Image 3
  • Generation by fuel in 2030
  • Generation mix by fuel in 2030
  • IPP participation
  • Share of IPPs

What's included

This report contains:

  • Document

    Can Vietnam's power plan generate US$170 bn of investment?

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