The program will help to address Vietnam’s increased demand for energy and promote inclusive growth by strengthening the enabling environment for the private sector.
The Global Infrastructure Facility’s (GIF) Governing Council approved $1.5 million in funding to support the World Bank’s work with the Government of Vietnam on the Solar Pilot Auction Program. The GIF, working with the World Bank’s Energy Global Practice, will help the government to design and structure the Auction Program to transition from a feed-in tariff regime to a sustainable competitive auction scheme for solar generation. The program will help to address Vietnam’s increased demand for energy and promote inclusive growth by strengthening the enabling environment for the private sector.
“We are working closely with the government to bring more private resources to the energy sector where the needs are huge and urgent,” said Ousmane Dione, World Bank Country Director for Vietnam. “GIF’s support comes at a critical time to help the country overcome multiple remaining obstacles to further develop solar power, including financing and risk allocation.”
The Solar Competitive Bidding Program by the Ministry of Industry and Trade is part of the government’s broader efforts to accelerate investments in energy efficiency and renewable energy to increase the country’s diversification of electricity generation and reduce CO2 emissions. The country aims to bring 12 GW of solar energy onto the grid by 2030.
“This would be the first solar auction program to be implemented in Vietnam, which would have large scale replicability. We are pleased to support the Government of Vietnam as they mobilize private financing through standardized, transparent, and programmatic approaches,” said Jason Lu, Head of the GIF.
While Vietnam’s economic outlook remains robust, with a forecast of 6.5 percent growth in 2020 and 2021, it faces many challenges in meeting its infrastructure needs, particularly in the energy sector that faces growing demand. Vietnam is actively seeking to attract private investment and use more public-private partnerships in the energy sector but needs to adapt its current framework to enable the competitive selection of independent power producers and minimize the cost of solar generation. With the support of the World Bank and the GIF, the government is developing competitive bidding schemes to deploy utility-scale solar PV.