VIETNAM continues a strong focus on connectivity projects in Q1 2023, across roads, railways and municipal infrastructure. Further, renewable energy target has been set to 30% in total energy supply. With a view to attract more international investments in the country to meet the financing needs for these projects, the government is also reviewing its PPP law to make suitable amendments to that effect, so as to enhance the project financing mechanism.
Read the key developments in Infrastructure and PPPs in Vietnam in our Q1 2023 insight.
January 2023
VIETNAM PROPOSES USD 9 BN RAILWAY PPP
Vietnam’s Railway Project Management Board has completed a pre-feasibility study for the proposed Ho Chi Minh City-Can Tho Railway project. The 174 km railway line will cost an estimated VND 214 Trn (USD 9.1 Bn) and will be developed in a public-private partnership (PPP). Running through 6 provinces, it will transport both passengers and freight and will connect An Binh station in Binh Duong province at one end to Can Tho station in Can Tho city. The Ministry of Transport is expected to seek final approval from the National Assembly in 2024.
VIETNAM OKAYS USD 1 BN EXPRESSWAY LINKING CHINA BORDER
The Vietnamese government has approved the development of Dong Dang-Tra Linh Expressway PPP project- linking Vietnam with China. The Deputy Prime Minister gave a greenlight to the proposal after the project budget was halved from VND 47 Trn (USD 2 Bn) to VND 23 Trn. The planned length was reduced from 144 km to 121 km.
The expressway will start from the Tan Thanh border gate and end at the Tra Linh border gate, connecting the two northern provinces of Lang Son and Cao Bang with the southwest Chinese province of Guangxi. The project will be developed in two phases.
The first phase of the project will cost an estimated VND 13 Trn and construction will take place during 2020-2025. Building of the second VND 9.52 Trn phase is due to start in 2025. The state will fund VND 6.6 Trn of the first phase and private investors will be sought to invest a similar group.
February 2023
VIETNAM PLANS SIX ROAD UPGRADE PPPS FOR USD 4.2 BN
Vietnam’s Ho Chi Minh City, the largest in the country by population, has proposed 6 road upgrade projects to be implemented in the build, operate, transfer (BOT) model. The city's Department of Transport is planning the projects because the existing roads are congested and the involvement of the private sector will ease the financial burden for the administration.
The 6 projects identified are:
1. Expansion of National Highway 1;
2. Upgrade of the An Suong Intersection-Ring Road stretch of National Highway 22;
3. Expansion of National Highway 13;
4. Extension of the East-West axis to the south connecting to Ring Road 3;
5. Expansion of the North-South Road axis; and
6. A road parallel to National Highway 50
The projects will cost an estimated VND 100 Trn (USD 4.2 Bn). The government expects these projects to be the basis for amendments of the PPP regulations in Vietnam.
VIETNAM SECURES INVESTMENTS FOR RED RIVER DELTA INFRA PROJECTS
The Red River Delta region of northern Vietnam has secured investments of USD 10 Bn in multiple sectors, including infrastructure. Municipal authorities granted licenses to 30 projects worth USD 7.1 Bn, primarily involving the development of industrial and manufacturing plants.
In Haiphong, a coastal city, real estate developer Thai holdings will develop a VND 4.9 Trn (USD 206.3 Mn) social housing project. Container shipbuilding and battery production projects will also be implemented entailing an investment of VND 4.7 Trn.
GOVERNMENT OF VIETNAM EYES 3 NEWSUBSEA CABLE BY 2025
The Government of Vietnam is planning to build 3 new subsea internet cables by 2025, increasing the country’s available cable networks to 10. The ADC and the SJC cable networks are expected to come online in 2023. The systems are expected to be managed and operated by Vietnam-based telecom companies.
Currently, four of the five existing undersea cable systems are facing connectivity issues. Adding more cable networks is expected to increase the stability of available data in the long term.
GOVERNMENT OF VIETNAM TARGETS 30 PER CENT RENEWABLE ENERGY SUPPLY
The Government of Vietnam is aiming to increase the share of renewable energy (RE) in total energy supply to 15 to 20 per cent by 2030 and 25 to 30 per cent by 2045. Additionally, emissions from the energy sector will be capped at 42 Mn tonnes by 2050. As a part of the climate change action plan, green growth will be promoted and prioritized. This includes the use of digital technology and boosting growth of sustainable infrastructure. Vietnam is among the top countries with the highest installed solar energy capacity.
March 2023
TAIWAN RENEWABLES DEVELOPER PLANS VIETNAM PROJECTS
Teamphon Energy, which is partnering with Global Infrastructure Partners (GIP)’s Skyborn Renewables to develop the 600 MW Hai Hsia Offshore Wind Farm in Taiwan, is also looking at opportunities in Vietnam.
The Taipei-based developer is in talks about a potential development of utility-scale or rooftop solar power plants. Teamphon, a subsidiary of local conglomerate Lealea Group, aims to expand overseas and build an overall solar portfolio under long-term ownership of about 200 MW to 300 MW.
Teamphon Energy is open to project-level partnerships within Taiwan with international private equity firms, pension funds, insurers and other financial investors. The renewables developer is also considering venturing into the power storage business. Teamphon's Hai Hsia offshore wind farm with Skyborn has a target commissioning date in 2026-2027.
JOINT VENTURE SIGNED FOR USD 6 BN LAOS-VIETNAM RAILWAY
Two private Southeast Asian companies will form a joint venture to develop via a public private partnership a railway connecting the Laotian capital of Vientiane and the east coast of Vietnam. Vietnamese transport infrastructure group Deo Ca Group Joint Stock Company and Laotian conglomerate PTL Holding(Laos) signed the joint venture agreement on the investment.
The Vientiane-Vung Ang railway project will run all the way from the landlocked nation of Laos to Vung Ang bay in Ky Anhtown, Ha Tinh province of eastern Vietnam, where there is a seaport.
PTL also showed an interest in investing with Deo Ca in a number of other projects in southern Vietnam in the near future. In particular, the Laotian company is interested in transport infrastructure projects affiliated to the port and logistics facilities in Vung Ang.
The proposed railway will have a length of 555 km with a designed speed of 150 km/h. The total cost is estimated at about VND 150 Trn (USD 6.32 Bn) and is to be implemented in the PPP mode.
VIETNAM REVIEWS PPP LAW TO ATTRACT INTERNATIONAL INVESTORS
The Vietnamese government is studying amendments to its Public-Private Partnership (PPP) law in an attempt to attract international capital. The country's Deputy Prime Minister assigned the task of reviewing the PPP Investment Law to the Ministry of Planning and Investment, with an expectation for a report to be submitted to the Prime Minister in the second quarter of 2023.
Officials will assess and propose new policies to draw foreign capital for PPP projects, as well as address issues related to project financing mechanisms. The Deputy Prime Minister has various other ministries to co-ordinate with the planning and investment ministry for the review.
SGC ENERGY TO CONVERT VIETNAM’S COAL-FIRED PLANTS TO BIOMASS
South Korea-based SGC Energy, has partnered with PECC1 to convert existing thermal-fired power plants into biomass across Vietnam. While PECC1 will be responsible for feasibility studies, SGC will oversee the operation and management of the sustainable energy plants. Additionally, SGC eTEC E&C will be responsible for procurement and construction of the facilities.
This move will support the Government of Vietnam’s plans to phase out coal-fired power plants, which currently accounts for nearly 40 per cent of the country’s total installed capacity. Only 25 per cent of the total energy generation is from renewable sources.
List of Key Transactions - Q1 2023
Source: Inframation, YOG INFRA analysis
ABOUT YOG INFRA
Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development.
YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.
With our offices in Singapore and India, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.
For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com
©2023 YOG INFRA. All rights reserved.