Logo of Phnom Penh Post newspaper Phnom Penh Post - VN solar energy a foreign-firm magnet

VN solar energy a foreign-firm magnet

Content image - Phnom Penh Post
A solar power plant in Vietnam’s Gia Lai province, which borders Cambodia’s Andong Meas and O’Yadav districts in Ratanakkiri province. VIET NAM NEWS

VN solar energy a foreign-firm magnet

This month saw the inauguration of the largest solar power plant in Southeast Asia, Dau Tieng in Vietnam, by Dau Tieng Energy JSC and Thailand’s B Grimm Power Public Company Limited.

It was built in Tay Ninh province, which borders Cambodia’s Tbong Khmum and Svay Rieng provinces, at a cost of more than 9.1 trillion dong ($390 million).

Japan’s Fujiwara company had earlier built a 50MW solar farm in Binh Dinh province at a cost of 1.3 trillion dong.

Many Indian companies have invested in the Vietnamese solar energy sector, including Shapoorji Pallonji Infrastructure Capital Company Ltd and Adani Group, and many others have evinced interest in green energy projects in this country.

K Srikar Reddy, the consul general of India in Ho Chi Minh City, said: “Many Indian companies have submitted proposals for developing solar plants in many provinces in Vietnam like Ninh Thuan, Binh Thuan, Binh Phuoc, Phu Yen, Ben Tre, Soc Trang, Gia Lai, Lam Dong and Kon Tum.

“Moreover, many Indian companies specialising in EPC [engineering, procurement and construction] work are looking for opportunities to execute renewable energy projects in Vietnam.”

In addition to foreign companies, foreign investment funds also have a growing interest in the sector.

After putting into operation the BCG-CME Long An 1 solar plant in Long An province – which borders Cambodia’s Prey Veng and Svay Rieng provinces last June, Vietnam-Oman Investment Fund (VOI) and BCG-CME Joint Venture plan to begin operating the BCG-CME Long An 2 solar plant next month, said VOI investment director Nguyen Xuan Giao.

VOI was one of the first foreign investors along with the BCG-CME joint venture to generate renewable energy, he said.

Talking about future investment plans in the sector, Giao said: “VOI is committed to investing large sums long-term in building and developing a chain of BCG-CME Long An solar power plants.”

Nguyen Hong Giang, marketing director of Tona Syntegra Solar, a joint venture between a German and a Vietnamese company that specialises in consultancy for solar equipment procurement and installation and connects local and foreign investors, said: “I see a great investment trend among foreign investors in solar energy in Vietnam.

“We have worked with many foreign funds, including from Australia, Malaysia and Germany, and they target investments of hundreds of millions of dollars in solar energy.”

Considering that Vietnam has high demand for electricity to drive economic growth, and the government offers incentives to encourage investors in the sector, including high feed-in tariffs, it is understandable that foreign investors are eager to invest in the country’s power sector, particularly renewables, according to experts and businesses.

GIZ Energy Support Programme project director Ingmar Stelter said around 4,500MW of mainly large solar power plants went on stream in the three months between April and June 30, when feed-in tariffs were reduced.

“In Germany, we installed half of that in six months. That is the massive dynamic we have seen in the solar market in Vietnam.”

Giang said investors were waiting for the new feed-in tariffs for solar projects, and if they are as high as they expect, there would be a new boom in the solar energy sector.


Despite the great potential, investment in the solar energy sector still faces challenges related to capital, land, electricity purchase price policies, and grid connection.

Giao said: “According to experts’ calculations, to generate 1MW of solar power requires one to 1.5ha of land [2ha for 1MW of wind power]. The central and southern provinces which have potential for solar power are limited in land availability.

“For infrastructure projects, solar in particular, the bank loan interest is still too high. Very few banks have special lending programmes for renewable energy projects.

“It takes three years to build a 500kV transmission line and two years for a 220kV transmission line. A solar power project with a capacity of 50-100MW just takes six to eight months to build.

“Therefore, the development of grid and transmission infrastructure cannot keep up with the progress of solar power projects.”

Stelter said the high concentration of renewable energy projects in Ninh Thuan and Binh Thuan provinces caused grid congestion there, and solar and wind plants had to reduce their power output.

“Indian investors are worried that they have to now operate below capacity due to insufficient transmission infrastructure,” Reddy said.

“To augment the transmission system for evacuation of large-scale renewable energy, Vietnam could consider developing high-voltage transmission lines similar to the ‘green energy corridor’ in India.”

To develop solar energy, Giao said the government should develop “a consistent feed-in tariff policy for the medium term [10-15 years], which would reassure investors”.

“The private sector has great potential in solar energy development. Therefore, the government needs to have mechanisms to encourage banks, foreign funds and international and domestic organisations to participate in the Vietnamese solar energy market.”

The economy is expected to grow at 6.5-7.5 per cent annually until 2030, and requires 90,000MW and 130,000MW of power by 2025 and 2030.

The government plans to increase solar power from virtually nothing at the end of 2017 to 850MW by next year, accounting for 1.6 per cent of power output, and 12,000MW by 2030 or 3.3 per cent.



  • Ministry mulls ASEAN+3 travel bubble

    The Ministry of Tourism plans to launch a travel bubble allowing transit between Cambodia and 12 other regional countries in a bid to resuscitate the tourism sector amid crushing impact of the ongoing spread of Covid-19, Ministry of Tourism spokesman Top Sopheak told The Post on

  • ‘Kingdom one of safest to visit in Covid-19 era’

    The Ministry of Tourism on January 12 proclaimed Cambodia as one of the safest countries to visit in light of the Kingdom having been ranked number one in the world by the Senegalese Economic Prospective Bureau for its success in handling the Covid-19 pandemic. In rankings

  • Courts’ decisions now published as reference source

    The Ministry of Justice has published 44 verdicts from civil litigation cases which can be used as models for court precedents and for study by the public and those who work in pertinent fields. Publication of the verdicts on December 31 came as the result of joint

  • Quarantine site in north Phnom Penh inaugurated

    A four-building quarantine centre in Phnom Penh’s Prek Pnov district was formally inaugurated on January 6. The centre can house up to 500 people, according to Phnom Penh municipal governor Khuong Sreng. At the inauguration ceremony, Sreng said the municipal hall had cooperated with the Ministry

  • Reeling in Cambodia’s real estate sector

    A new norm sets the scene but risks continue to play out in the background A cold wind sweeps through the streets of Boeung Trabek on an early January morning as buyers and traders engage in commerce under bright blue skies. From a distance, the

  • China firm to develop Mondulkiri airport

    Tourism to the Kingdom’s northeast corridor could experience a remarkable metamorphosis after the government decided in principle of a Chinese company to study and develop a proposal to build a regional-level airport in Mondulkiri province, according to industry insiders. The Council of Ministers said