INSIGHT by Mili Fomicov, Lecturer and Co-Director – Climate Finance Academy, Imperial College London.

Vietnam requires large-scale renewable energy investment to meet its ambitious climate targets and retain its position as the ASEAN region’s fastest growing economy in light of projected significant increase energy demand over coming decades, according to a report by Imperial College Business School’s Centre for Climate Finance & Investment (CCFI).

This report summarises Vietnam’s power market structure and outlines the main opportunities and challenges for renewable power deployment in Vietnam in the context of its economic growth potential. It also introduces priorities and potential solutions for local and foreign players to accelerate renewables deployment.

It follows its predecessor report, ASEAN Renewables: Opportunities and Challenges, published by the CCFI in March 2023 with the support of the Singapore Green Finance Centre (SGFC).



The Vietnamese government has been pivotal in driving renewable energy development through public capital investment. Various mechanisms, such as feed-in tariffs (FiTs) and power purchase agreements (PPAs), have been  established to provide financial incentives for renewable energy projects.


While several initiatives are underway, challenges remain:

Coal dependency

Uncertainty over current policy and investment frameworks

Lack of transparent legal and financial frameworks

Renewables Power Purchase Agreement (PPA) risks

Restrictive monetary controls and investment conditions

Higher cost of capital in Vietnam

Lack of hard currency support

Lack of investment in the northern region

Constraints for offshore wind

Grid integration issues

Additionally, the energy market in Vietnam has operated as a monopoly throughout most of the energy value chain. Liberalizing this market and the participation of private operators and investors could increase market transparency and allow the energy market to develop price signals for renewables. A portfolio of mechanisms will be required to build confidence and accelerate the energy transition.

An important one is to enable early coal phase-out, as the country has a relatively young coal fleet. Other areas the  government of Vietnam should address to increase confidence and build on the existing clean energy initiatives include:

Bolster additional investment in transmission capacity

Address stranded renewable assets

Provide incentives to invest in large-scale renewables in North Vietnam

Introduce regular competitive tenders and encourage bankability

Introduce risk hedging facilities to tackle foreign currency exchange risk

Our aim with this report is to help accelerate renewable power deployment in Vietnam in the context of its economic growth and incredible resource potential by recommending a combination of policy and market mechanisms.


More articles by Mili Fomicov

Green Finance: How Competition Can Bring Polluting Firms Into the Fold | Imperial College Business School

Scale up of clean energy funding in Southeast Asia needed to meet climate goals | Report


| about

Mili Fomicov is a Teaching Fellow and leads clean energy research at the Centre for Climate Finance and Investment, Imperial College London. She also works on transition finance frameworks and teaches Clean Technology Investment. She is a Co-Director for the Singapore Green Finance Climate Academy.

Before joining Imperial College, she was a Director and Portfolio Manager in the Multi-Asset Strategies team at BlackRock. Previously, Mili was a Portfolio Manager on J.P. Morgan’s CIO team, and managed US and Japan equity funds at Barclays. She started her career at AllianceBernstein in the US. Graduate of the University of Chicago Booth School of Business, where she received an MBA in Finance, Economics, Econometrics and Statistics. She is on the Spark Change Advisory Board.


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