Vietnam will contend with severe power shortages from 2021 as electricity demand outpaces construction of new power plants in the Southeast Asian country, the Ministry of Industry and Trade told media on Wednesday.
The lack of energy infrastructure could put the brakes on foreign investment inflows into one of Asia’s fastest-growing economies and challenge Vietnam’s position as the top beneficiary of the U.S.-China trade war. Khanh Vu reports on Reuters.
Vietnam’s demand for electricity will exceed its supply by 6.6 billion kilowatt hours (kWh) in 2021, increasing to 15 billion kWh by 2023, equivalent to about 5% of forecasted demand for electricity then, the ministry said in an emailed statement.
In addition to the shortfall, many energy projects in Vietnam have been facing long delays, the ministry told Reuters.
“Developers are facing difficulties securing sufficient funds from local sources, and the government has limited its guarantee for foreign loans,” the ministry statement said.
According to Reuters, Vietnam will need an average of $6.7 billion a year to expand its annual power generation capacity by 10% between 2016 and 2030, it added.
“This is a big challenge, given that current electricity prices in Vietnam are barely enough for the developers to make a profit,” the statement said.