Vietnam offshore poised to unlock international investor interest

Favourable commercial environment set to make Vietnamese offshore wind market attractive for ‘first mover’ investors seeking to diversify Asian renewables portfolios

Ho Chi Minh City, 17th October – The domestic offshore wind market offers Vietnam a new opportunity to significantly increase inward investment into its renewable energy sector, according to Augusta & Co. (Augusta), the specialist financial advisor for the renewable energy industry.

Vietnam’s onshore wind sector has attracted some external investor attention but is set to enjoy further interest from many international funds with capital to deploy into clean energy projects, including those that have expressed interest for other markets in the region, including Taiwan, which has a more advanced offshore development process.

With an increasing demand for energy, and with the support of a feed-in-tariff set at USD 9.8 cents / kWh, there is a growing investor interest in the country. And, as Vietnam begins to explore its potential in the offshore wind market, this new segment of the industry will offer international investors a ‘first mover advantage’ in securing long term returns from new projects.

Vietnam’s long coastline offers a significant wind energy resource, and, with engineering experience already established in the country’s offshore oil and gas industry, there is a natural opportunity to swiftly transfer expertise and de-risk some of the early stage learning in the drive to build clean energy in the emerging markets.

Vietnam has recently embarked on a process of making its domestic market more accessible to international investors. A Direct Power Purchase Agreement (DPPA) proposal has been developed by the Vietnamese government in collaboration with USAID, aiming to facilitate corporate procurement of renewable energy, and enable the market to mobilise private capital for the development of new projects.

“International investors are starting to really engage with the Vietnamese renewable energy opportunity,” said Elise Do, Associate Director, Augusta.

“In light of the strong potential for offshore wind, rising domestic energy demand, and a growing track record in project development, the changing shape of clean energy procurement in Vietnam will offer a number of investors a first mover advantage.”

“At Augusta, we’re increasingly connecting our European investor partners with project developers in the Vietnamese market, largely based on our experience in working with early stage investors in the Taiwanese offshore wind market.”

“We anticipate that the Vietnamese offshore wind market will become a new and exciting proposition for European and US investors.”

Augusta has a proven track record advising significant transactions in Asian offshore wind, including the partial sale of a 1.2GW Taiwanese offshore wind portfolio to Mitsui on behalf of Enterprize Energy. Augusta is pleased to be supporting efforts to encourage inward investment to the Vietnamese offshore push and to attend the 2nd Vietnam Renewables event, 17 -18th October in Ho Chi Minh City.