Draft decree on offshore wind power sets requirements for foreign investors

A draft decree on offshore wind power being compiled by Vietnam’s Ministry of Industry and Trade includes requirements for foreign investors, such as financial capacity and past experience.

Accordingly, foreign businesses must have experience in investing and developing at least one operational offshore wind power project in Vietnam or in the world.

Regarding financial capacity, the foreign investor must contribute at least 15% of the project’s total investment capital, and the foreign investor's equity must be equivalent to at least 20% of the capital contribution.

The project must have the participation of Vietnam’s state-owned enterprises, which hold at least 5% of the charter capital of the entity conducting the project.

The businesses must seek approvals from Vietnam’s Ministry of National Defense, Ministry of Public Security, and Ministry of Foreign Affairs.

The investors must also commit to utilizing domestic supplies (workforce, service, products) during investments, construction and operation phases, on the basis of ensuring the quality, schedule, and price competitiveness.

For domestic businesses conducting offshore wind power, they must have experience in investing and developing at least one operational offshore wind power project in Vietnam or in the world. If they cannot meet the requirements, they must cooperate with other investors to fulfill the terms.

The Global Wind Energy Council (GWEC) says in its August 2024 report that Vietnam has not initiated any true offshore wind projects and has only developed intertidal wind projects; thus the target of installing 6 GW of offshore wind capacity by 2030 under its latest power development plan (PDP VIII) presents considerable challenges.

Considering that the regulatory framework to support offshore wind development under PDP VIII is still underdeveloped, as well as the project development lead time of six-eight years, the GWEC believes that no real offshore wind development will take place until route-to-market policies and potentially new law(s) are in place. GWEC expects Vietnam to miss its 2030 offshore wind target.