From now to 2020, Vietnam will need some 8 billion USD per year to meet the local energy demand, which doubles every six years, said Vice President of the Green Growth Business Sector Committee (GGSC) under the European Chamber of Commerce in Vietnam (EuroCham) Christoph Schill.
The country has vast potential in the field but has been focusing solely on low-cost energy, such as hydroelectricity and coal, without proper investment policies to develop clean energy, he said.
Developing clean energy will help the Southeast Asian country take advantage of its natural conditions and ensure energy security moving forward.
Energy price hikes do not affect investment from foreign firms, according to the latest survey conducted on 150 foreign businesses in Vietnam by the GGSC and the International Institute for Sustainable Development.
Most respondents said the price of energy was the least important factor among 10 contributing reasons for their decision to invest in Vietnam .
More crucial factors are the availability of skilled workers, costs, domestic market conditions and Government policies, they said.
A majority of companies revealed that they could bear nominal power tariff increases of 15 percent or more before planning future investments and over 65 percent could accept a price hike of 10 percent per year.
Foreign companies are more concerned about the quality of electricity supply than prices. Up to 65 percent of respondents said they were not satisfied with the power supply infrastructure and two-thirds utilise back-up power sources. Some 73 percent said unstable power supply, rather than power price hikes, had affected the country’s competitiveness in attracting investors.
Experts said Vietnam should draw up long-term plans to promote the use of green energy while encouraging private investors to join the field and building a legal framework for the development of renewable energy.
Europe is one of the biggest trade partners of Vietnam with 27.6 billion EUR worth of goods and is among the country’s largest investors with 1,810 investment projects. The figures are forecast to surge when the EU-Vietnam free trade pact is signed in 2016.
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