Investment Incentives for Renewable Energy in Southeast Asia: Case study of Viet Nam

The report examines Viet Nam's investment incentive framework for renewable energy, analyzing financial, fiscal, and market-based supports. While the government has established a policy framework including tax exemptions and price subsidies, stakeholder interviews suggest these incentives have a limited effect on investment decisions due to low electricity off-take prices, regulatory opacity, and a lack of trust in government guarantees. The study highlights a contrast between the modest success of small hydropower and the struggles of wind and biogas projects to achieve financial viability.

• Investment incentives in Viet Nam are generally perceived by stakeholders as having a limited impact on the decision to invest in renewable energy projects.
• Low electricity off-take prices are a primary barrier to investment, as the rates paid by Vietnam Electricity (EVN) often fall below the actual cost of production for wind and solar PV.
• Small-scale hydropower has benefited more than other renewables from the Avoided Cost Tariff and the Clean Development Mechanism (CDM), with CDM projects being dominated by small hydro.
• Wind power projects receive a specific price subsidy of US$0.01 per kWh (VND 207/kWh) from the state budget via the Environment Protection Fund, but this is often insufficient for investors to break even.
• Biogas projects have faced significant challenges, including cancellations by foreign investors due to uncompetitive electricity prices offered by EVN.
• The legal and administrative framework for incentives is described as opaque, contradictory, and burdened by red tape, which increases transaction costs for developers.
• Foreign investors express concern over the reliability of government guarantees and the stability of macroeconomic policies, such as inflation and currency devaluation.
• Viet Nam provides a range of fiscal incentives for renewable energy, including a corporate income tax rate of 10% for 15 years for new enterprises and exemptions from import taxes on equipment for the first four years of operation.

APA

Khanh, N. P., Anh, Q. N., & Quoc, B. Q. M. (2012). Investment Incentives for Renewable Energy in Southeast Asia: Case study of Viet Nam. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investments_incentives_viet_nam.pdf

Chicago

Khanh, Nam, Pham, Quan, Nguyen Anh, and Binh, Quan Minh Quoc. Investment Incentives for Renewable Energy in Southeast Asia: Case study of Viet Nam. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/investments_incentives_viet_nam.pdf.

Wikipedia

{{cite report |last1=Khanh |first1=Nam, Pham |last2=Anh |first2=Quan, Nguyen |last3=Quoc |first3=Binh, Quan Minh |title=Investment Incentives for Renewable Energy in Southeast Asia: Case study of Viet Nam |publisher=International Institute for Sustainable Development |date=December 2012 |url=https://www.iisd.org/system/files/publications/investments_incentives_viet_nam.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{khanh2012investment, author = {Khanh, Nam, Pham and Anh, Quan, Nguyen and Quoc, Binh, Quan Minh}, title = {{Investment Incentives for Renewable Energy in Southeast Asia: Case study of Viet Nam}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = dec, url = {https://www.iisd.org/system/files/publications/investments_incentives_viet_nam.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }