VIETNAM has drawn foreign investor interest across multiple infrastructure project developments in transport, connectivity and clean energy transition sectors. There have been notable updates in PPP law, with an objective to promote PPPs at provincial level to meet the growing infrastructure demand. Through the National Electiricty Development Plan, the government has a strong focus on developing the transimission infrastructure for enabling clean energy transition in the country.
Read the key developments in Infrastructure and PPPs in Vietnam in our Q2 2023 insight.
April 2023
ENVIRONMENT GROUP CHINA TIANYING PLANS ASIA RENEWABLES
China Tianying is planning new greenfield project opportunities in the Asia Pacific region, especially in Southeast Asia and in countries that are part of China's Belt and Road Initiative. It plans to venture into solar, wind, hydrogen, ammonia and power storage. The BRI is aimed at connecting Asia with Africa and Europe via land and maritime networks, improving regional integration and trade, as well as economic growth.
Green energy and environment are now the two focus areas for overseas expansion. Tianying is evaluating project opportunities in the energy-from-waste (EfW) segment in Australia. The company's portfolio includes three EfW projects in Vietnam with a combined capacity of 6,000 Tonnes/day.
VIETNAM RAIL INFRA DRAWS FOREIGN INVESTOR INTEREST
Multiple overseas investors have shown interest in Vietnam’s railway projects. East Japan Railway Company (JR East) has expressed interest in the upgrade of a route between Hanoi and Hai Phong as well as a project to connect the Hai Phong international port.
The country’s railway sector is expected to require VND 240 Trn (USD 10.2 Bn) in capital by 2030. This includes more than VND 46.3 Trn (USD 1.96 Bn) for upgrades of existing routes, VND 112.3 Trn (USD 4.76 Bn) for constructing HSR projects, and more than VND 80 Trn (USD 3.39 Bn) for developing new railway routes.
VIETNAM TO USE PPP TO UPGRADE CON DAO AIRPORT
Vietnam plans to launch a new airport public-private partnership project in an archipelago in the country's south. The proposed PPP project will involve the expansion of the airport and improvements on its runways, passenger terminals and other ancillary works. The Ministry of Transport will prepare an investment plan on the upgrades of runways, terminals and taxiways. It will also guide and supervise the implementation of the project.
The People’s Committee of Ba Ria-Vung Tau province will conduct studies to assess the project's economic and technical feasibility and will also be the procurement agency. The upgrade was set to commence from 2023 with a target completion date in 2024 to ensure large aircraft may land on the island.
LAOS – VIETNAM RAIL TO BE DEVELOPED UNDER A PPP MODEL
Deo ca Group Joint Stock Company (Deo ca) has signed a joint venture (JV) agreement with Petroleum Trading Lao (PetroTrade) to build the Laos – Vietnam Railway linking Vientiane and the Vung Ang port. The partners will invest around USD 1.2 Bn to complete works on the 103-km-long section from Vung Ang to the Quang Binh province. The section will be developed under a public–private partnership (PPP) model.
The Laos – Vietnam Railway Project (LVRP) is a planned 555 km cross border rail line that will be connected to the existing Laos-China railway. The project is expected to cost USD 6.3 Bn. No completion date has been mentioned yet.
SOUTH KOREA’S LOTTE SUSPENDS VIETNAM RAILWAY PPP
South Korean conglomerate Lotte E&C Company is suspending a plan to upgrade the Yen Vien - Lao Cai railway line. The project is not on the government's list of priorities. The upgrade was meant to connect Lao Cai city to Hanoi, the country's capital.
Lotte E&C had expressed interest in 2015 and submitted a proposal in 2020. The project would cost an estimated VND 4 Trn (USD 171 Mn), of which it would invest about 30% as equity, with the remaining to be tied up as debt from Korean lenders. The government was to bear the costs related to site clearance. The project involved refurbishing about 46 km of the railway line, constructing a station and six bridges, as well as upgrading existing ones.
May 2023
ADANI PORTS PLANNING USD 10 BN INVESTMENTS IN VIETNAM
Indian diversified business Adani Group is planning to invest close to USD 3 Bn in Vietnam’s ports and renewable energy sectors. Adani Ports and Special Economic Zone (APSEZ) is looking at additional long-term investments of USD 7 Bn. APSEZ has already shared the proposal with Vietnam’s Prime Minister.
The company has studied and assessed opportunities for long-term investments in Vietnam, that seaports and logistics, energy and digital technology are areas of interest. APSEZ is looking to develop a seaport ecosystem as well as invest in wind and solar energy projects. The plan includes developing the Lien Chieu Wharf area in Da Nang.
VIETNAM UNVEILS USD 135 BN NATIONAL ELECTRICITY DEVELOPMENT PLAN
Vietnam has approved a national electricity development masterplan for 2021-30. The plan aims to develop electricity sources and transmission grids at voltages of 220 KV or higher; and industry and services in renewable energy and new energy in Vietnam, including works to link power grids with neighboring countries.
Regarding the development of an industrial ecosystem and renewable energy services, it is expected that by 2030, two inter-regional renewable energy industrial and service centers will be formed. Furthermore, renewable energy sources are planned to be developed, and electricity generated for export. The scale of electricity export capacity will likely reach 5-10 GW by 2030. An investment of USD 134.7 Bn is estimated to be made over the 9 year period to develop power sources and transmission grids.
TOTALENERGIES ENEOS TO BUILD 4.6 MW SOLAR PROJECT IN VIETNAM
TotalEnergies ENEOS has signed a long-term agreement with Golden Victory Vietnam Co., Ltd., one of the biggest shoes and footwear manufacturers and a key supplier for globally renowned sportwear brands, to develop a 4.6-megawatt peak (MWp) solar photovoltaic (PV) system at its facility in Nam Dinh Province, Vietnam. This new phase takes their total solarization system size to 7.5 MWp.
With over 7,900 of modules installed, the PV system is expected to produce approximately 5,200 megawatt-hours (MWh) of renewable electricity annually, realizing significant cost savings for Golden Victory and reducing the company's carbon footprint by about 4,200 tons of CO2 emissions annually, equivalent to planting over 62,000 trees. Under the agreement, TotalEnergies ENEOS will fully fund, install and operate the solar system while Golden Victory will pay only for the electricity generated for 20 years, avoiding any upfront costs.
VIETNAM’S MOT TO SPEND USD 304 MN TO UPGRADE HIGHWAYS
The Ministry of Transport (MOT) plans to spend around USD 304.3 Mn to upgrade three national highways in Vietnam, namely highways 53, 62 and 91B in the Cuu Long province. Planned works on National Highway 53 includes upgrading a 46-km-long section between Long Ho – Ba Si in Vinh Long and Tra Vinh provinces as well as building a 23 km bypass in the Vinh Long province. The project is estimated to cost over USD 76 Mn.
The agency will also upgrade a 77-km-section of National Highway 62 and build a new 8 km bypass. The project is expected to cost USD 93.8 Mn. Finally, the MOT has also earmarked USD 63.95 Mn to upgrade the 142-km-long National Highway 91B. Majority of the funding will be generated from borrowing.
AIIB TO FINANCE CHINA-BACKED VIETNAM ONSHORE WIND FARMS
Beijing-based multilateral lender Asian Infrastructure Investment Bank (AIIB) is looking to finance 2 onshore wind farms in Vietnam. It will provide USD 100 Mn in long-term financing for the Dak Lak Wind Power Project, which will comprise of 4, 50MW wind farms. The plants will be in Dak Lak province in Vietnam’s Central Highlands. The wind farms are named Krong Buk 1, Krong Buk 2, Cu Ne 1 and Cu Ne 2. The sponsor is China Huadian Engineering Company. The USD 346 Mn project will be financed by USD 116 Mn in equity, with the remainder to come from the AIIB and commercial banks. The final financing approval by the AIIB is scheduled for the Q4 of 2023.
AIIB plans to also extend a USD 60 Mn loan to finance the development of a 99 MW onshore wind farm in Gia Lai province, also in Vietnam’s Central Highlands. The project will feature 30 turbines of 3.3 MW each. The sponsor of the Gia Lai Wind Power Project is China Power International Holding. The bank is estimated to grant approval for the loan in the Q3 of 2023.
METIS ENERGY SECURES USD 45 MN FOR ROOFTOP SOLAR EXPANSION
Singapore-listed Metis Energy has secured a USD 45 Mn green loan from DBS Bank and United Overseas Bank. The funds will be used to finance the development of rooftop solar projects in Vietnam and Indonesia, allowing the company’s subsidiary Athena Energy to expand its pipeline of commercial and industrial (C&I) rooftop solar projects. The loan will also enable Metis Energy to expedite the development of its pipeline of C&I solar projects that supply electricity to industries such as garments, shoe manufacturing and agricultural trading.
VIETNAM DRAFT RESOLUTION TO EXPAND PPP INVESTMENT
Vietnam's National Assembly has proposed an expansion of Ho Chi Minh (HCM) City's scope to use public-private partnerships (PPP). The draft resolution would allow HCM City to use more PPPs for things like cultural and sports projects and apply build-operate-transfer contracts for current road infrastructure projects as well as executing investment projects via the build-transfer contracts. The city is expected to use local budget funds to roll out regional and inter-regional transportation projects.
June 2023
WORKS STARTED ON 188-KM-LONG TRANS-MEKONG EXPRESSWAY
Work has commenced on the 188 km long Chau Doc – Can Tho – Soc Trang expressway in Vietnam. The Trans-Mekong expressway project will cost over USD 1.89 Bn and will be funded by the centre and local budgets. The expressway will link the Tran De port, Hau Giang Province and Chau Doc City. In the first phase, the motorway will feature four lanes and will be 17 metre wide. In the future, the width will be expanded to 32 metre and feature six lanes.
This is one of the key projects that are a part of a regional network connecting Vietnam with Cambodia and other Southeast Asian countries. The expressway is the first to run on the horizontal axis in the Mekong Delta, connecting the region with the national expressway system. The project is one of six expressways stretching a total of 1,188 km eyed for the Mekong Delta by 2050, to boost connection between the country's agriculture hub with HCMC and other economic centers. Around 90 km of expressways is in use or under construction in the delta.
GIA NGHIA-CHON THANH EXPRESSWAY TO BE DEVELOPED UNDER PPP
Gia Nghia-Chon Thanh Expressway, a section of the North-South Expressway project in western Vietnam, will be constructed under the public-private partnership (PPP) format. The feasibility study for the expressway is currently under review by the authorities in Binh Phuoc Province. The southern province selected the Vingroup-Techcombank consortium as the investor of the project and proposed developing the expressway through the public-private partnership (PPP). The project is estimated to cost nearly VND 26 Trn (USD 1.10 Bn), with VND 16.6 Trn (USD 703.87 Mn) going to road construction and the remainder to land clearance. The period for recouping capital is 21 years and 4 months.
The expressway between Gia Nghia District in Dak Nong Province and Chon Thanh District in Binh Phuoc Province will also be connected to the planned HCMC-Thu Dau Mot-Chon Thanh Expressway. The four-lane expressway will have a total length of 129 km, with 101 km in Binh Phuoc and 28 km in Dak Nong. The Western North-South Expressway is 1,300 Km long, starting in Phu Tho Province and ending in Kien Giang Province.
List of Key Transactions - Q2 2023
Source: 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, India and UAE, 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.
Comments