Vietnam’s government has chosen Vingroup’s new subsidiary, VinEnergo, to develop the first phase of a significant wind power project, surprising the German renewable company PNE, which was not selected despite planning a $4.6 billion investment. This decision represents another challenge for foreign investors in Vietnam’s energy market, following last year’s cut in subsidies for several renewable energy companies and difficulties related to electricity pricing and deadlines.
Vingroup, Vietnam’s largest company, continues to expand into various sectors, including energy. It has diversified its operations from real estate into tourism, education, and healthcare, and owns the electric vehicle manufacturer VinFast. The Vietnamese government supports Vingroup amid its efforts to establish a major offshore wind capacity, aiming for 6,000 megawatts by 2030-2035 and up to 38,000 megawatts from other projects.
The People’s Committee of Gia Lai province approved VinEnergo’s bid for the 750-megawatt phase of the wind project, which involves an investment of 48.3 trillion dong ($1.87 billion). PNE, which has been engaged with the project since 2019 and invested millions, expressed surprise at the decision and is assessing its next steps after facing unexpected concerns from Vietnamese authorities regarding its financial commitments.
While Vingroup continues to thrive, many Western wind companies have exited the Vietnamese market, reflecting a government shift to support local champions, sometimes creating friction with foreign investors. This change has fueled Vingroup’s substantial stock growth, while Vietnam grapples with rising electricity demand and challenges in power generation, often relying more on coal despite commitments to reduce its use.
With information from Reuters