South Korea mulls renewable energy investments in Vietnam

The government’s tax relief for renewable projects and national power development plan are making it a hot investment destination.

Korean investors are looking to inject money into Vietnam’s renewable energy sector thanks to the incentives local authorities offer to foreign investors, a report by Vietnam Plus revealed.

According to Pham Hong Hai, CEO of HSBC Vietnam, the electricity sector was one of the most important investments of Korean businesses into Vietnam.

Vietnam said that it plans to cooperate with Korea in reducing greenhouse gas emissions, adapting to climate change and environmental protection. In return, Korea will also assist Vietnam in personnel training and technological transfer in the field, he said.

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The government has reportedly issued regulations on tax relief for renewable projects, as well as a strategic plan for renewable energy development and a national power development plan.

The country’s power demand is forecasted to grow by more than 10% each year from 2019 to the end of 2020, and by 8% annually between 2021 and 2030.

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Data from the Vietnam Energy Association showed how the country aims to increase its renewable power to 32% of the total energy mix by 2030, and to 43% percent by 2050.

“The potential for developing renewable energy is huge, especially for solar power production as the country is located in the equatorial area with a hot climate all year long in the south and central regions,” the report noted.

Abundant energy sources such as wind, solar power and biomass remain largely untapped, according to Hai. In a bid to realise the potential of solar power, the Vietnam government has developed policies to speed up investment in the sector.

Also read: Winds of change: Vietnam pushes for more developments amidst growing energy demand

The report also noted how Korea’s investment in ASEAN member countries rose by 16.7% in 2018. Vietnam accounted for an estimated 51.5% of Korea’s total investment in ASEAN, followed by Singapore with 25.6%.