Green Energy in Vogue

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HSC Securities: Asia Commercial Bank to Outperform

October 10th 2016

greenny

Vietnam is one of the countries at most risk from global warming.

In response, it is developing a “green growth” strategy with a focus on promoting economic development through a combination of clean renewable energy, recycling and the reduction of greenhouse gas emissions.

This policy is taking shape against a back drop of environmental disasters and lack of attention to environmental controls and compliance by industrial companies. The one that attracted attention was the toxic dump by Formosa steel, which contaminated the sea waters along the central coast of Vietnam and killed hundreds of tons of fish and badly affected the livelihood of a significant number of fishermen and family restaurants along the coast.

This has led to a tightening of license approvals for industries which involve the dying of textiles and leather industry projects.

Foreign investors are actively seeking waste to energy projects and many companies are seeking opportunities in solar energy. Several major international companies are researching opportunities in Ninh Thuan province, which has attracted attention for solar energy for a long time now.

The biggest obstacle to investments in solar energy and waste to energy projects is the low feed in tariffs and lack of Government incentives. It is also hampered by the subsidized electricity pricing which has long been a topic of discussion between the multi-national donors and the Vietnamese Government.

We understand that the Government is now preparing a Solar Power support legislation which will increase the feed in tariffs for solar energy and some other measure like import tax exemptions and corporate tax reductions.

Whether these will be enough to really kick start the renewable and solar energy industries, only time will tell.

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