Many large-scale investment projects and cooperation agreements have been signed for the near future, promising a breakthrough in foreign direct investment (FDI) attraction in Vietnam.
Just in the last 10 days, numerous investment cooperation agreements have been signed within the framework of Party General Secretary Nguyen Phu Trong’s visit to Indonesia and Myanmar and Prime Minister Nguyen Xuan Phuc’s visit to Thailand.
One of these is the agreement between PT Intra Asia (Indonesia) and Hong Phat Coal and Resources to build a port for coal import in Vietnam. The project is expected to have up to $1 billion investment and capacity of 15 – 20 million tonnes per year, helping cut the cost of transporting imported coal from Indonesia.
“The construction of the port will help the sustainable development of exporting coal from Indonesia to Vietnam and secure the input for thermal electricity plant”, said Lutfi Ismail, chairman of PT Intra.
Another agreement was signed between Thailand’s Superblock PCL and a Vietnamese partner to develop renewable energy in Vietnam. Superblock PCL, one of the largest renewable energy producer in Southeast Asia, plans to invest up to THB20 billion ($602 million) each year to expand production inside and outside the country to meet the increasing demand for clean energy.
In the next 3-4 years, Superblock PCL will increase their capacity to around 2,000 megawatts, 700MW of which will be contributed by wind power projects in Vietnam. Superblock PCL has not ruled out the possibility of investing in solar power, either.
Other notable agreements signed during the PM’s visit to Thailand include a legal agreement to implement Quang Tri buil-operate-transfer (BOT) thermal power project between Vietnam’s General Department of Energy under the Ministry of Industry and Trade and Thailand’s EGAT International Co., Ltd. (EGATi), a memorandum between Vietnam Oil and Gas Group (PetroVietnam) and SCG (Thailand) Co., Ltd. on promoting the Long Son petrochemical complex in the southern province of Ba Ria-Vung Tau, and cooperation in research and development of other petrochemical projects in Vietnam.
Additionally, there were also memorandums signed between SCG and PetroVietnam’s subsidiaries such as Binh Son Refining and Petrochemical Co., Ltd., PetroVietnam Ca Mau Fertilizer JSC, PetroVietnam Fertilizer and Chemicals Corporation.
|According to the latest data of Foreign Investment Agency under the Ministry of Planning and Investment, in the first eight months of 2017, the total amount of FDI registered in Vietnam was $23.36 billion, increasing 45.1 per cent compared to the same period in 2016.
Out of this amount, newly registered investments amounted to $13.45 billion, increasing 37.4 per cent, capital increase amounted to $6.4 billion, and capital contributed through share purchases was $3.5 billion, increasing 101.3 per cent compared to the same period in 2016.
Of the abovementioned projects, at least two carry a billion-dollar price tag. The Quang Tri BOT thermal power project is expected to start construction in mid-2019 with $2.2 billion capital. The Long Son petrochemical complex project has $5.4 billion investment capital, with 71 per cent contributed by SCG.
The completion of these agreements will contribute a lot to Vietnam’s FDI flows.
Many economic experts have said that even without the Trans Pacific-Partnership (TPP), Vietnam is still very attractive to foreign investors thanks to the numerous recently signed trade agreements and ceaseless efforts to improve the business environment.
In a recent report, PwC predicted: “In the future, low cost business environment and great economic potential will continue to make Vietnam an attractive destination to foreign investors.”