Vietnam will not experience power shortage, PM tells global investors

By Hoai Thu   June 26, 2024 | 01:20 am PT
Vietnam will not experience power shortage, PM tells global investors
Prime Minister Pham Minh Chinh speaks to global corporate leaders at the World Economic Forum on June 26, 2024 in Dalian, China. Photo by Duong Giang
Vietnam will not suffer power shortage this year despite an expected 15% rise in consumption, Prime Minister Pham Minh Chinh told foreign investors at the ongoing World Economic Forum (WEF).

The country did see power shortage in some areas last year but the issue has been resolved this year, he said in China’s Dalian on Wednesday morning during a discussion session with around 20 corporate leaders.

In response to some investors’ inquiry on Vietnam’s power supply, PM Chinh said that consumption is expected to rise 15% this year, and consumption on June 14 alone exceeded one billion kilowatt-hours, a new historic record.

But power supply is adequate, he added.

"Vietnam will not face power shortage as we have comprehensive solutions in terms of supply, transmission, distribution and consumption while offering reasonable retail prices".

Installation of a 500-kilovolt transmission line is set to be completed this month and will increase transmission capacity from the southern region to the northern region by nearly 2,500 megawatts, Chinh said.

He added that Vietnam is making efforts to utilize more clean energy sources.

The government is perfecting its regulations on direct power purchase agreements. It also encourages households and businesses to install rooftop solar systems for their own consumption, he said.

It will also issue new policies on natural gas and liquefied natural gas to attract investors, he added.

The government is also working on regulations concerning the global minimum tax with a focus on transitioning from tax incentives to financial, expense and land incentives for special projects, he said.

Vietnam prioritizes investment in high-tech and high value-added projects that will drive growth and stir up digital transformation, and the country is looking for investors in the semiconductor and AI sectors, he added.

Foreign investors at the session hail Vietnam as a fast-growing country with improving business environment.

Brand Cheng, chairman and CEO of electronics manufacturer Foxconn, said that the company has established a new factory in Vietnam in April, three months after Cheng first mentioned the plan with the PM.

"This is an example of Vietnam's determination in economic development. Vietnam is growing rapidly".

Foxconn now has factories in five provinces with 80,000 employees. It has poured $4 billion into the country to date.

Beverage giant Pepsico, in 30 years, has invested $850 million into Vietnam, and plans to pour more money into the sectors of agriculture and food processing.

It also wants to increase support to small businesses and plastic recycling.

PM Chinh said that Vietnam will continue to prioritize growth while keeping inflation under control.

Its GDP expanded by 5.5% last year and 5.66% in the first quarter this year. Growth is expected to be even higher this quarter and the same trend will continue for the rest of the year.

Public debt, government debt, and foreign debt are significantly below the allowable limits, while the Vietnamese dong is among the least depreciated currencies in the region.

The government will soon establish a PM-led task force to untangle red tapes, in which ministers will participate in perfecting regulations.

"Vietnam continues to prioritize growth by offering flexible policies to revitalize traditional growth drivers and to promote new areas such as digital economy, green economy, and sharing economy", he said.

He also suggested WEF and countries to strengthen partnership with Vietnam in policy building and planning, and in helping the country participate in WEF's initiatives and ecosystems.

Klaus Schwab, founder and executive chairman of the WEF, said that Vietnam is a model of a robustly developing economy that has effectively leveraged the opportunities of the fourth industrial revolution.

WEF and Vietnam have jointly agreed to make the 4.0 Industrial Revolution Center in Ho Chi Minh City a leading connectivity hub in the region.

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