Foreign businesses still worry about power shortages

Many FDI enterprises are concerned about the recurrence of power shortages this year and have asked Vietnam to have a plan to provide uninterrupted power supply.

Providing adequate electricity is a recommendation raised by many foreign investor associations at the conference between Prime Minister Pham Minh Chinh and FDI enterprises, within the framework of the annual Vietnam Business Forum (VBF 2024), on the morning of April 19.

The power shortage that occurred in the North in the second half of May and early June 2023 had many impacts on the production and business of many enterprises. Some industrial zones at that time had power outages with prior notice, with a frequency of 1-2 times a week.

At today's conference, representatives of the Japan Chamber of Commerce and Industry (JCCI) called the power outage in the North last year serious, affecting their production.

"Many businesses cannot plan production and forecast delivery dates. This has greatly affected the 'just in time' model - the core of the supply chain," said a JCCI representative, adding that some member units are considering reviewing their global production systems.

Mr. Hong Sun, Chairman of the Korean Business Association (Kocham) in Vietnam, also said that electricity for production is an important condition for FDI enterprises, including Korean companies, to maintain stable operations.

Kocham representative suggested that the Government have a plan to provide enough electricity for industrial zones during this year's hot season. At the same time, the Government and the Ministry of Industry and Trade need to have a mechanism to encourage companies to save and develop energy production.

Mr. Hong Sun, Chairman of Kocham in Vietnam. Photo: VGP — Mr. Hong Sun, Chairman of Kocham in Vietnam. Photo: *VGP*

According to the World Bank (WB) last year, Vietnam lost about 1.4 billion USD due to power shortages, equivalent to about 0.3% of GDP. Representatives of associations said that the power shortage will affect the decision to invest in Vietnam. "The power shortage is currently a major factor that makes many Korean businesses, especially high-tech companies, hesitate to invest in Vietnam," said Mr. Hong Sun.

Mr. Joseph Uddo, President of the American Chamber of Commerce (Amcham) in Hanoi, warned that many of Vietnam's goals will be difficult to achieve without a stable, sustainable and affordable source of electricity.

In response to concerns from FDI enterprises, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that the agency is making efforts to provide sufficient and stable electricity. "We are committed to not having a power shortage this year or in the following years," said Mr. Tan.

According to him, to avoid power shortages, Vietnam is focusing on developing sources, urgently completing the 500 kV line 3 to bring electricity to the North and synchronizing the transmission system.

Adding further, the Amcham representative said that cooperation between the public and private sectors is necessary to develop sustainable and affordable electricity sources. Vietnam can attract global finance thanks to an effective energy management system.

JCCI suggested that authorities should prioritize policies to realize large-scale renewable energy projects, especially offshore wind power and rooftop solar power.

Duc Minh

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