Vietnamese authorities have awarded the first phase of a major Vietnam wind power project to a newly established subsidiary of real estate conglomerate Vingroup, excluding German renewable energy firm PNE, a decision the foreign investor said came as a surprise.
The People’s Committee of Gia Lai province approved a bid from VinEnergo, a unit set up by Vingroup in March, to develop the initial 750-megawatt phase of a 2,000-MW wind project. The investment for this phase was set at 48.3 trillion dong ($1.87 billion), according to a provincial statement that did not name unsuccessful bidders.
Vietnam Wind Power Project and Investor Setbacks
PNE, which is backed by Morgan Stanley Infrastructure, had planned to invest $4.6 billion in the overall project and has been working on it since 2019, according to people familiar with the matter. The company has conducted feasibility studies and wind tests and invested millions of dollars, the sources said, though PNE declined to comment on specific costs.
“We have taken note of this decision with surprise,” PNE told Reuters, adding that it was reviewing the reasoning before deciding on next steps. VinEnergo has not previously developed wind farms, though Vingroup said the subsidiary had won projects in other Vietnamese provinces. Vingroup did not respond to specific questions about the Gia Lai project.
The project was recently reclassified from offshore to nearshore, despite no material changes to its design, according to people familiar with the process.
Foreign Investment Pressures in Vietnam’s Energy Sector
The decision adds to growing challenges for foreign investors in Vietnam’s energy sector. Last year, Hanoi retroactively reduced subsidies for several renewable power companies, while disputes over electricity pricing and project deadlines have complicated investment in liquefied natural gas and nuclear power.
Vietnam aims to develop 6,000 MW of offshore wind capacity by 2030–2035 and up to 38,000 MW from onshore and nearshore projects, from virtually zero offshore capacity today.
Vingroup Expansion and Policy Shifts
The award strengthens Vingroup, Vietnam’s largest company by market capitalisation, which has expanded from property into sectors including electric vehicles, energy, railways and technology. Its shares surged more than 700% last year amid policies favouring national champions promoted by Vietnam’s top leadership.
Several Western energy firms, including Equinor, Orsted and Enel, have scaled back or exited Vietnam in recent months. Despite strong foreign manufacturing investment, the country continues to face rising electricity demand, occasional blackouts and continued reliance on coal-fired power generation.
