Vietnam’s renewable energy sector is facing growing concerns from both foreign and domestic investors due to proposed changes in pricing policies. Investors fear that retroactive alterations to feed-in tariffs (FITs) could threaten financial stability and undermine confidence in the country’s regulatory framework.

Investor Concerns Over Policy Changes

More than two dozen investors, including Adani Green Energy and private equity fund Dragon Capital, have raised concerns over Vietnam’s plans to revise previously agreed-upon FITs for wind and solar energy projects. These changes could impact over $13 billion in investments, affecting both local and international stakeholders.

Potential Financial and Regulatory Risks

The discussions around altering FITs after projects have commenced power generation have sparked fears of financial instability. Investors warn that such changes could:

• Lead to significant financial losses.
• Jeopardize ongoing and future investments.
• Undermine confidence in Vietnam’s investment climate.

Challenges Faced by EVN and Power Consumers

Vietnam Electricity (EVN), the state-owned power utility and the sole buyer of generated electricity, has reported increasing financial losses due to high FITs. As a result, consumers may face rising power prices due to the increased financial burden on EVN.

Risks of Loan Defaults and Payment Delays

Many renewable energy projects are experiencing payment delays from EVN, leading to increased risks of loan defaults with both local and international lenders. Investors caution that such delays could disrupt financial markets and hinder further investment in the sector.

Vietnam’s Renewable Energy Expansion Plans

Despite these challenges, Vietnam remains committed to expanding its renewable energy capacity. The country aims to increase its installed capacity for wind and solar energy to over 56 gigawatts by 2030, reinforcing its transition to a greener energy mix.

Foreign Investment at Risk

According to investors, approximately 4 gigawatts (GW) of solar energy projects funded by foreign investors could be directly affected by the proposed tariff changes, representing an estimated investment value of $4 billion.

Key Data Summary

Key Factor	Details
Total Affected Investments	Over $13 billion
Major Investors	Adani Green Energy, Dragon Capital, others
Planned Renewable Capacity	56 GW by 2030
Potentially Affected Solar Projects	4 GW, valued at $4 billion
Impact on State-Owned Utility (EVN)	Increased financial losses and consumer price hikes
Risk to Banking System	Potential loan defaults, financial instability

Call for Regulatory Stability

Investors have urged Vietnam to maintain regulatory stability to avoid negative consequences for the country’s financial sector and overall investment climate. They emphasize that changing agreed-upon tariffs retroactively could erode investor confidence and deter future foreign investment.

Vietnam stands at a critical crossroads as it balances its renewable energy ambitions with investor concerns and financial stability. Maintaining a stable regulatory framework will be crucial for sustaining investor confidence and achieving long-term energy goals.