Power shortages alarm foreign businesses

Of particular worry were the risks associated with electricity deficits in the northern regions, notably during the months of May and June.

During a meeting with Prime Minister Pham Minh Chinh on Tuesday, business delegates of foreign direct investment (FDI) firms underscored recounted the previous year's challenges, highlighting instances where industrial zones experienced frequent planned blackouts, disrupting normal business operations and production cycles.

At the forefront of these discussions was the Japan Chamber of Commerce and Industry in Vietnam (JCCI), whose representative stressed the adverse effects on the intricate "just in time" inventory system, essential for precise production scheduling.

The inability to forecast delivery dates due to erratic power supply severely hampered operational efficiency, prompting some member units to reconsider their global production strategies.

Echoing similar sentiments, Hong Sun, Chairman of the Korean Chamber of Commerce and Industry in Vietnam (Kocham), emphasized the indispensable nature of stable electricity supply for FDI enterprises. He urged the government to take decisive action to ensure sufficient electricity reserves, particularly during peak demand periods, to safeguard ongoing industrial activities.

Hong emphasized the detrimental impact of inadequate power supply on South Korean businesses, particularly those engaged in high-tech sectors, citing it as a significant deterrent to further investment in Vietnam.

Joseph Uddo, Chairman of the American Chamber of Commerce in Hanoi (AmCham), warned of the potential impediments to Vietnam's economic objectives in the absence of a reliable and cost-effective electricity supply. He referenced estimations by the World Bank, indicating substantial economic losses amounting to around US$1.4 billion, equivalent to 0.3% of GDP, attributed to electricity shortages last year.

In response to these mounting concerns, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan reassured foreign investors of concerted efforts to mitigate electricity supply challenges.

Tan affirmed the government's commitment to ensuring an uninterrupted power supply moving forward, highlighting ongoing initiatives to bolster infrastructure and transmission systems, particularly in the northern region.

Adding to the discourse, the AmCham chair emphasized the imperative of public-private collaboration in fostering sustainable and affordable energy solutions.

Similarly, the JCCI representative advocated for prioritizing large-scale renewable energy projects, including offshore wind and rooftop solar initiatives, as part of a comprehensive strategy to address long-term energy demands.

Additionally, the Kocham chairman underscored the need for incentivizing energy conservation practices and fostering the development of independent energy sources among businesses, further emphasizing the multifaceted approach required to alleviate concerns surrounding Vietnam's electricity supply.