CEO roundtables on energy pricing in Vietnam

Last January, PRACSIS South East Asia, the International Institute for Sustainable Development (IISD) and Vietnam Business Forum (VBF) organised two CEO roundtables and a networking lunch on energy issues in Hanoi and Ho Chi Minh City.

More than 100 people joined the events, including officials of the Vietnamese Ministry of Planning and Investment (MPI) and Ministry of Industry and Trade (MOIT), Electricity Vietnam (EVN), The EU Delegation to Vietnam, The World Bank, UNDP and representatives of the international business community.

While the Vietnamese government would like to increase industrial electricity tariffs, policy makers are concerned that higher energy prices will discourage foreign investment. On the other hand, government investment capacity is limited and energy state-owned enterprises are heavily indebted - EVN announced losses of $790 million in 2014. Meanwhile, clean energy solutions, such as energy efficient buildings, solar PV and thermal, biogas and biomass as well as wind energy still face challenges to wider deployment.

During the events, business leaders actively presented their ideas and concerns on the topic. Though different arguments were raised about how the energy market in Vietnam may develop in the near future, a positive signal was that a suitable move to sustained higher electricity prices - if it brought improved reliability of electricity supply - would be highly supported among foreign investors.

These events have contributed to IISD’s study on the effect of energy pricing and energy policy on foreign direct investment in Vietnam. The study is ongoing with a quantitative questionnaire currently circulating among the foreign business community. The result will be published in 2015.