Vietnam's PM Approves $134 Billion Funding for Energy Infrastructure

Vietnam's prime minister has approved a long-awaited power plan for this decade, which calls for US$134.7 billion in funding for new power plants and grids, the government announced late Monday (May 15), potentially opening the door to billions of dollars in foreign investment.

The PDP8 plan aims to ensure the Southeast Asian country's energy security while it transitions from its current significant reliance on coal to becoming carbon-neutral by mid-century.

The proposal has been delayed for more than two years due to internal squabbles and work on difficult changes, and has seen a dozen draught versions before Prime Minister Pham Minh Chinh's acceptance, which now requires the formal green light from the rubber-stamp parliament, probably this month.

The strategy is critical for unlocking a US$15.5 billion initial investment in green-transition funds offered to Vietnam in December by the Group of 7 (G7) governments and other wealthy countries. The public sector will contribute half of the funding, while private investors will contribute the other half.

Following the agreement, negotiators have battled for months to advance on preliminary work to apportion the financing, according to numerous officials, as Vietnam authorities maintained their reluctance to take loans, which are by far the largest component of the pledged public monies.

The government predicts that it will need a whopping US$658 billion to complete its transition to carbon-neutrality with 100% coal phase-out by 2050, one-fifth of which must be spent this decade.

According to the study, which was developed by the industry ministry, half of Vietnam's office buildings and households would be powered by rooftop solar panels by 2030. The country will also attempt to produce green energy for export, with a goal of 5 to 10 gigatonnes (GW) by 2030.