The Vietnamese government’s review of its feed-in tariff (FIT) regulations has raised concerns in the renewable energy industry, with developers warning of severe financial consequences. The review stems from miscalculations in FIT rates, particularly in Ninh Thuan province, which led to an additional financial burden of VND 1.48 trillion (USD 57.7 million) for Vietnam Electricity (EVN). As a result, the Ministry of Industry and Trade (MOIT) has been instructed to revise and rectify the affected projects.
The revised policy would reduce FIT rates for affected projects by 24% to 47%, impacting over 3,600 MWp of solar capacity and 160 MW of wind capacity. This change puts foreign investors at risk of financial losses, including companies from Thailand, the Netherlands, Singapore, and China. Dragon Capital, a Vietnamese company, has reported zero revenue since September 2023 due to FIT uncertainty.
Industry leaders warn that the policy shift could trigger widespread financial distress, as rising costs and construction delays have already strained many renewable energy firms. The Vietnam Chamber of Commerce and Industry (VCCI) has submitted a petition urging the government to reconsider the FIT revisions, emphasizing the risk of loan defaults. The industry estimates that bad debts could reach VND 200 trillion (USD 7.8 billion), potentially destabilizing financial institutions that financed these projects.
Bangkok Glass Energy (BGE), a Thai renewable energy firm, noted that initial investments were made based on the promised higher FIT rates, leading to high acquisition costs. If the reduced rates are enforced, investors could face heavy financial losses and, in some cases, bankruptcy.
As the situation remains uncertain, the Vietnamese government’s next move will determine the future of the country’s renewable energy landscape. The industry awaits a response, with concerns rising over the potential impact on the sector’s stability and the risk of a bad debt crisis.