VN looks to boost energy sector

The most favourable conditions will be created for both foreign and domestic investors to invest in the energy sector, Deputy Minister of Industry and Trade Do Huu Hao has said while calling for more investments to the sector.

At an international seminar on Viet Nam’s energy development planning and strategies, held recently in Ha Noi, Hao said that in the near future, national energy policies would focus on synchronously developing an energy system, including electricity, coal, oil and gas and new and renewable energy sources.

Energy development strategies would be implemented with international co-operation policies on energy imports and exports, the development of energy technology, especially for new and renewable sources, forming a competitive energy market and boosting the economical and effective use of energy, he added.

According to the Ministry of Planning and Investment, through July of this year, Viet Nam had attracted 143 foreign invested energy projects worth US$6.2 billion. However, the figure was still moderate, as it only accounted for 3.74 per cent of the country’s total foreign direct investment capital.

In the power industry, total registered capital was $1.1 billion with two projects, namely the Phu My 2.2 and Phu My 3 electricity plants.

Meanwhile, Viet Nam needed $80 billion for developing the power industry and $30 billion for oil exploitation, as well as exploration and collection projects for the 2005-50 period.

Chairman of the Viet Nam Energy Association Tran Viet Ngai said that the energy sector, including electricity, had not yet attracted investors, especially those from foreign countries, because commercial electricity prices did not properly reflect production costs.

Other participants at the seminar cited unclear FDI attraction mechanisms and policies, as well as inconsistent legal documents on energy development as difficulties that had prevented the energy sector from luring in more investments.

Ta Van Huong, head of the MIT’s Energy Department, said that Viet Nam would expand co-operation with other regional and worldwide countries in mining coal, oil and other energy sources in foreign countries to supplement domestic energy sources.

Currently, most of the country’s energy projects were being implemented by domestic enterprises, which helped create more jobs for local labourers and raise Vietnamese workers’ sense of responsibility and technology ownership.

According to a leader of the Viet Nam National Oil and Gas Group, the development of human resources is the key factor for the development of the sector.

Young staff should be trained in developed countries to acquire knowledge of advanced and new technologies, and training courses in universities should be more practical so that students could satisfy the requirements of their jobs, a representative from the Electricity Project Consult Joint Stock Company No 4 said.

Representatives of the Ministry of Planning and Investment affirmed that the Government’s objective was to continue attracting major foreign investors to large-scale power and clean energy projects.

To lure investments in the energy sector, besides policies to encourage investments and solve difficulties, the Government should apply common electricity prices for both domestic and foreign businesses, they suggested, adding that power purchase negotiation procedures should be simplified to help investors save time and costs.