REE flags FX risks for wind power projects, targets tripling power capacity by 2030

Ho Chi Minh City-based utility firm Refrigeration Electrical Engineering Corp (HoSE: REE) has warned that foreign exchange volatility remains a key hurdle for large-scale renewable energy investments, even as the company pushes ahead with plans to triple its power capacity by the end of the decade.

During the Q&A session at the firm’s 2026 AGM on Tuesday, chairwoman Nguyen Thi Mai Thanh said REE aims to expand total installed renewable capacity from about one gigawatt currently to three gigawatts by 2030, implying the addition of roughly 500 megawatts annually between 2027 and 2030.

Despite holding licenses for 328 MW of wind power and developing a pipeline of around 700 MW of solar capacity, REE remains cautious on offshore wind power due to financial risks.

She highlighted exchange rate exposure as a major constraint for offshore projects, which can require investment of up to $3 billion per gigawatt and take 5-6 years for measurement, environmental assessments, feasibility studies, and financing arrangements.

“Borrowing in foreign currency while generating revenue in Vietnamese dong creates significant pressure, especially as the dong depreciates by around 5% per year,” she said.

The issue is compounded by current regulations under which authorities commit to purchasing only about 85% of generated output, limiting revenue certainty for investors.

To address these challenges, REE has proposed several policy changes to the government, including offering full offtake guarantees for 100% of output, allowing up to 60% of power payments in foreign currency, ensuring adequate transmission infrastructure, and standardizing power purchase agreements (PPAs) in line with international practices. These measures, the company argues, are essential to unlock large-scale renewable investments.

Alongside renewables expansion, REE is optimizing its existing portfolio. Hydropower assets continue to perform efficiently, while the Vinh Son-Song Hinh complex is focusing on reducing debt to offset less favorable hydrological conditions.

In thermal power, REE is planning to divest its stake in Pha Lai thermal power JSC, though low market liquidity may complicate the process. The company is also pushing for the closure of older generation units at the plant to improve profitability, she revealed.