What challenges does Vietnam need to overcome to access green FDI?

Việt NamViệt Nam21/11/2024


Recently, many "big guys" in the world have chosen Vietnam as a "stronghold" and are aiming for green criteria such as using renewable energy, innovating machinery technology, and having commitments related to environmental and climate protection...

The project that plays a “turning point” role in shifting FDI capital flows into Vietnam worth 1.3 billion USD of the Lego Group (Denmark) in Binh Duong is one of them. Or the Heineken brewery in Ba Ria – Vung Tau has a plan to operate 100% from renewable energy. 97% of the biomass heat used to brew beer at this factory is provided by a business opposite the factory, right in My Xuan Industrial Park….

The Lego factory will start construction in November 2022 at Vietnam - Singapore Industrial Park 3, Binh Duong province. Photo: Baodautu
The Lego factory will start construction in November 2022 at Vietnam-Singapore Industrial Park 3, Binh Duong province. Photo: Baodautu

Great opportunity

Assessing Vietnam's potential and advantages in attracting green FDI capital, Mr. Tim Evans, General Director of HSBC Vietnam, stated that Vietnam already has many factors to attract foreign direct investment (FDI). In terms of green FDI capital alone, nearly 40% of Vietnam's land area has average wind speeds favorable for wind power development. "Not only that, the country also has many areas with favorable radiation levels for solar power development. Therefore, Vietnam also possesses advantages in both policies and geographical conditions to compete in attracting green FDI with countries in the region," according to the leader of HSBC Vietnam.

Affirming that the S-shaped country is a very good growth market, Mr. Bhardwaj Vinay, General Director of Indorama Ventures Vietnam Company wants to seize this growth opportunity.

Accordingly, Indorama Ventures Ngoc Nghia Vietnam Company chooses sustainable development. From an investment and business perspective, green solutions such as energy optimization will help businesses reduce costs. Access to capital from international organizations and banks for green projects is now also more convenient and cheaper than before.

Mr. Nguyen Anh Duong, Head of the General Research Department (under the Central Institute for Economic Management - Ministry of Planning and Investment), stated that the interest of FDI investors in the green economy has created positive spillover effects on the entire government system, people and businesses of Vietnam.

Currently, state management agencies and enterprises have made moves to shift towards green production. Many industrial parks are also paying more attention to screening and impact assessment to ensure environmentally friendly investment projects.

“In particular, Vietnam is among the countries with increasing sustainable consumption trends, which has contributed to creating significant 'demand' for green products. From there, the issue of attracting FDI into green economic sectors and activities is carried out naturally,” Mr. Nguyen Anh Duong shared.

However, challenges in the journey of attracting green FDI are not absent and Vietnam needs to thoroughly improve these challenges to welcome more green FDI flows.

Challenges remain

Mr. Gabor Fluit, General Director of De Heus Asia, observed that the country faces barriers in complying with the European Union's (EU) green supply chain focus. Specifically, the implementation of stricter environmental standards and regulations. At the same time, the application of green technology requires huge investments. Ensuring transparent and sustainable supply from local suppliers is also a big challenge for the country.

Accordingly, Vietnam urgently needs to upgrade its power grid to connect existing solar and clean energy projects and support new projects in the future. Neglecting to upgrade could lead to more frequent power shortages, disrupting daily life and business operations.

In addition, experts say that policies and incentives to encourage FDI enterprises to invest in renewable energy projects will be very important. This is an issue that the Vietnamese Government needs to focus on in the coming time. At the same time, it should focus on training the workforce to equip people and businesses with the necessary skills for this growing sector.

Source: https://kinhtedothi.vn/viet-nam-can-vuot-qua-thach-thuc-gi-de-tiep-can-fdi-xanh.html


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