World Bank Releases "A Framework for Private Sector-Led Offshore Wind Projects in Viet Nam" Recommends Policy Reforms and Large-Scale Private Sector Investment

On June 13, 2025, the World Bank released a report titled "A Framework for Private Sector-Led Offshore Wind Projects in Viet Nam". The report was funded by the Energy Sector Management Assistance Program (ESMAP) under the World Bank and the Australian Department of Foreign Affairs and Trade (DFAT), with support from the International Finance Corporation (IFC), Vietnam's Ministry of Industry and Trade(MOIT), Ministry of Agriculture and Rural Development, and Ministry of Natural Resources and Environment. The report recommends that Vietnam implement policy reforms to unlock the potential of private investment in the offshore wind sector and proposes a framework based on international best practices.

Vietnam's Development Goals and Current Status

Vietnam's rapidly growing economy has driven a surge in energy demand. The country possesses abundant, untapped offshore wind resources in shallow waters close to densely populated areas. Although Vietnam previously launched a feed-in tariff (FiT) for wind power and implemented several nearshore (within 6 nautical miles) wind projects under that regime—totaling 0.8 GW of installed capacity—no true offshore wind project has yet been constructed.

While Vietnam's market initially attracted international developers, many investors later exited due to unclear policy directions. For instance, Ørsted, the Danish developer that entered Vietnam in 2021, announced in June 2023 it was halting its market activities. Norwegian energy major Equinor opened a Hanoi office in 2022 but announced its closure in August 2024.

Between 2024 and 2025, Vietnam introduced several regulatory updates—including amendments to the Electricity Law, Decree No. 58 (58/ND-CP), Decree No. 65 (65/2025/ND-CP), and the Marine Spatial Planning Resolution for 2021–2030—to establish a clearer path for offshore wind development. The 2025 revised version of Power Development Plan VIII (PDP8) set offshore wind targets of 6–17 GW installed capacity by 2030–2035 and 139 GW by 2050, by which time offshore wind will account for 15% of total power generation. The industry is projected to generate at least USD 60 billion in economic value and create over 90,000 jobs. Notably, the current 17 GW target is already paired with designated sites and grid connection plans.

State-Owned Enterprises to Lead Offshore Wind Pilot Scheme

The amended 2024 Electricity Law paved the way for offshore wind pilot schemes led by state-owned enterprises (SOEs). The Ministry of Industry and Trade (MOIT) had been drafting such plans since last year, envisioning SOEs to spearhead early-stage pilot developments. Initial proposals included leadership by PetroVietnam, Vietnam Electricity (EVN), or even military departments. Eventually, the government decided SOEs would lead these pilot projects.

These pilot schemes may also be developed through joint ventures in which SOEs hold at least a 51% stake. No competitive bidding is required; instead, SOEs submit project proposals to the Prime Minister's Office, and projects proceed upon approval. At least two SOE-led offshore wind farms are currently planned, each with a capacity of about 1 GW. For comparison, Taiwan's first demonstration project, Formosa 1 offshore wind farm, was 128 MW, and Japan's first commercial-scale project in Akita Noshiro was 140 MW. Vietnam's planned pilot projects are already larger than several operational commercial wind farms elsewhere.

Copenhagen Infrastructure Partners (CIP), a Danish developer, advised the Vietnamese government that SOEs should collaborate with experienced international developers to receive technical and financial support. CIP cited its collaboration with Taiwan's state-owned China Steel Corporation(CSC) in the 300 MW Zhong Neng Offshore Wind Farm, which was completed in September 2024, and expressed interest in becoming a development partner in Vietnam.

World Bank's Recommended Framework

While SOEs will lead the pilot phase, large-scale private sector investment is necessary to meet Vietnam's long-term offshore wind targets. A clear and sustainable framework for private sector participation is essential. The World Bank's report outlines several key principles:
1. Ensure an attractive investment environment for investors and lenders
2. Ensure a sustainable project award process that allows Viet Nam to achieve its long-term energy targets, drawing on international best practice
3. Incorporate a 2-stage award process — (1) site exclusivity and (2) offtake price — to encourage early-stage investment and ensure the lowest electricity price for end consumers
4. Minimise changes to existing regulations where possible

To meet the 6 GW target by 2030, 2 GW should come from pilot schemes, while the remaining 4 GW should be opened to private sector development. The World Bank further recommends a minimum private-sector allocation of 8 GW, developed through a two-phase bidding process. Stage 1: Survey License Approval to award 8 GW of Survey Licenses (implied site exclusivity), and the bidding is proposed for 2026. Stage 2: Price Competition to award 4 GW of Investment Agreements (PPA tariff), which is to be held in late 2027. To ensure regional balance, 2 GW should be located in the north and 2 GW in the south. From 2027 onwards, a biennial price bidding process for 2 GW should be conducted, with the scale adjusted based on Vietnam's long-term targets.

GWEC's Recommended Framework

In November 2024, the Global Wind Energy Council (GWEC) also released a report titled "The Vietnam Offshore Wind Competitive Investor Selection Study", which was submitted to Deputy Minister of MOIT Nguyen Hoang Long. Drawing on not only European models but also Japan's and Taiwan's offshore wind experiences, the GWEC recommended a similar two-phase model:

Stage 1: the award of exclusive survey rights. Rights awarded through competitive bidding, with a performance guarantee required from developers. Successful bidders receive at least a 10-year exclusive survey license. Multiple licenses can be awarded based on criteria such as project feasibility, risk assessment, and developer capability.

Stage 2: the award of a PPA with EVN. It involves competitive bidding. The government sets a price ceiling, and successful bidders enter into 20-year PPAs with EVN. To enhance bankability, the PPAs should include foreign exchange or inflation-indexation.

Market Still Awaiting Kick-Off

In June, Deputy Minister Nguyen Hoang Long stated that construction of Vietnam's first offshore wind farm would "likely" begin by the end of the year, though no specific timeline or policy announcements were provided. Two key issues remain unresolved: the bidding mechanism for site allocation and capacity/price, and the design of bankable PPAs. Although ambitions are high, GWEC noted in its most recent market insight that Vietnam is unlikely to have an operational offshore wind project by 2030. However, if the government takes action within the next one to two years, an estimated 4.5 GW could be grid-connected between 2031 and 2034—advancing toward the country's medium- and long-term goals.