Global Opportunities

Swiss Cleantech SMEs in Vietnam: Renewable energy needed to meet growing demand

Increasing environmental awareness and concern in Vietnam create market opportunities for Swiss cleantech providers of renewable energy solutions.

Vietnam faces rising energy demand due to sustained and strong economic growth.
Vietnam faces rising energy demand due to sustained and strong economic growth.

Rapid economic development creates demand for renewable energy sources

Over the past decades, energy consumption in Vietnam increased tremendously in accordance with industrialization and rapid economic development. The Ministry of Industry and Trade (MoIT) expects electricity demand to grow around 11% per year until 2020. Duong Thanh Tu, Trade Officer at the Swisss Business Hub ASEAN in Hanoi, explains:

While Vietnam’s power industry remains heavily weighted toward coal-fired thermal plants, and hydro power capacity has been used almost entirely, renewable energy sources such as wind solar power are likely to become an important part of the future energy mix.

Vietnam: National Green Growth Strategy

The Vietnamese government has formulated a National Green Growth Strategy to develop more sustainable energy sources. In the Renewable Energy Development Strategy (REDS) in 2015 and the revised Power Development Plan VII (PDPVII rev.), targets have been set up for increasing power generated by hydroelectricity and other renewable energy sources.

The energy sector is one of the focal industries for development by Vietnamese Government because of high demand growth rate (11% during 2011 – 2015, and is expected to grow 9.1% during 2016 – 2020 as reported by MoIT). According to PDP VII rev., around 3,206,652 billion VND (equivalent to $148.8 billion) will need to be invested into the national power system development over the next two decades. Of this, 66% will be spent on power plants and the remaining 33,4% on network development.

Swiss SMEs face competition from Europe, the US, and Japan

Big companies in the RE sector are mainly from Europe, US, Japan. The financial and/or technical supports from these countries to Vietnam in energy sector, specifically in renewable energy help to make their country’s technology and machinery/equipment well-known in Vietnam.

Examples are: MoIT and USAID (USA)  signed a MoU on clean and efficient energy developments; MoIT and KfW (Germany) program on wind power development, including wind measuring and database, Pre-FS and FS for wind power projects; master plan for wind development at national and provincial levels. The FCO (UK Foreign Ministry) runs a Solar Hub program for roof top energy for some provinces in the South, including solar heat/radiation measuring, solar database, FS for solar projects.

As reported by EVN in 2016, for the period of 2015 – 2017, EVN secured US$2.8 billion for their important energy projects from official development assistance (ODA) and foreign concessional loans. World Bank and ADB are the two largest donors.

Further investment capital needed in renewable energy

Currently, budgetary means and other sources of loan (mainly are foreign loans, both commercial and concessional) only meet about 66% of the total sectoral required investment capital. The government is hence calling for investment from private sector, including foreign investors. Numbers of foreign investment projects have been registered with capital from EU (Germany, Belgium), UK, Canada, US, India, Korea, Malaysia, Thailand and Singapore.

Local stakeholders Swiss cleantech providers need to know

- General Directorate of Energy (GDE)

- Electricity of Vietnam (EVN)

- Institute of Energy

- Electricity Regulatory Authority of Vietnam (ERAV)

- Investors

- People committee of Phu Yen, Binh Thuan, Ben Tre etc.

- World Bank

- Asian Development Bank

Opportunities for Swiss expertise and technology

Energy is one of the focal industries given priority for development by Vietnamese Government because of high demand growth rate (around 11% per year until 2020 as reported by MOIT).  According to PDPVII, the government estimates that around 3,206,652 billion VND (equivalent to $148.8 billion) will need to be invested into national power system development over the next two decades.

With the recent state encouraging policies on renewable energy, the demand for advanced technologies, equipment and machinery is now increasing and forecasted to growth continuously in the long term. At least 30 renewable energy projects were mentioned in the PDP VII. Many of them are FDI and financed by International Financial Institutions (IFIs) like ADB, WB, IFC or under ODA program.

If you would like to further evaluate the opportunities related to the Vietnamese cleantech and renewable energy industry, please get in touch with our S-GE Consultant for Southeast Asia, Angela Di Rosa. Contact us now

The market demand for Cleantech can be divided into below main segments of products and services:

  • Consulting and engineering services (including project management)
  • Installation and construction services
  • Machinery, equipment, accessories and materials
  • Spare parts, materials, consumables and overhaul/maintenance services

Kinds of renewable energy that Swiss companies have expertise are:

  • Pump Storage Hydro Power
  • Solar power
  • Wind power
  • Biomass (Biogas/ process gas, wasteto-Energy , heat pumps)

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