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According to KPMG’s assessment, Vietnam’s power sector ranks first in the region in investment attractiveness due to the country’s high power consumption and bustling economic growth. While strategic investors state the preference for Joint-venture and private projects, the funds seem to seek profit from investing in shares and bonds of privatized and joint stock enterprises in power sector.

For domestic investors, Vietnam’s power sector is the 4th most attractive sector for putting their money in, just behind telecommunication, banking and petro. High demand, attractive RoI rate, variety of investment options contribute to the positive evaluation of the sector. At the contrary, inconsistency of regulations is what worries the investors.

According to the plan, in the next 5 years EVN independent-accounting power plants will compete with independent power producers, selling bulk power to transmission companies based on Power Purchase Agreement under the regulation of National Load Dispatch Central. All power plants will operate according to independent accounting mechanism, produce and sell electricity to power transmission companies at transfer prices.

Reorganize transmission sector into single unified transmission body, splitting from generation, accounting based on profits, operate as independent utility under the financial and cost effective control of EVN. Integration of all transmission companies and dispatch center into single state owned transmission company managing transmission lines with voltage level of 220 kV and above. The Transmission Company will purchase power from generating power plants and sell to distribution companies and directly to big consumers.

Arrow Consulting's assessment

The power sector in Vietnam offers great potential for investment. Despite rapid development, the country is still importing electricity from neighboring countries.

The government is calling for investment from various sources. For the next 5 years, 6 billion USD will need to be generated through several sources: direct investment, shares or bonds. The power sector is the leading strategic industry in terms of privatization and equitization. Competitive pricing policy will take effect from 2009, facilitating enterprises to act more flexibily.

Arrow Consulting forecasts immense growth in coming years for clean energy development: hydro, wind, solar due to (i) steadily growing consumption; (ii) potential to call for foreign investment in frame of Kyoto Convention lowering emission globally.

We have been engaged in a number of projects granted by World Bank, Asian Development Bank, GTZ, New Energy Develoment Association. Currently Arrow Consulting is looking to exploit further opportunities in clean energy development through its partnering association: Vietnam Clean Energy Inc.


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