More than 15 trillion VND (597 million USD) has been disbursed under a credit scheme to support Vietnamese agroforestry and aquatic sectors since July last year, heard participants at a recent conference to discuss measures on maintaining Vietnam's key agricultural exports.

Dao Minh Tu, Deputy Governor of the State Bank of Vietnam (SBV), said the entire amount had been disbursed successfully, nearly two months before the deadline of the end of June 2024.

He said the loans, with interest rates lower than market rates by 1-2% annually, were designed to help the sectors cope with and overcome difficulties experienced during this turbulent period.

He said the central bank is willing to increase the amount to over 30 trillion VND if there is strong demand within the sectors. According to a report by the central bank, accumulated funds of over 17.5 trillion VND have been disbursed so far among 6,500 borrowers.

Among these, loans intended for agroforestry have reached 4.45 trillion VND, or 25.7%, while loans intended for the aquatic sector have reached over 13 trillion VND, or 74.3% of the total, with the lion's share going to business borrowers at 83% of the total amount.

Nguyen Hoai Nam, Secretary-General of the Vietnam Association of Seafood Exporters and Producers (VASEP), said the credit scheme has been a welcome boost, relieving a lot of financial pressure on businesses.

With the sectors' prospects for the remainder of the year looking increasingly bright, he said the amount should be increased to 30 trillion VND to allow businesses and farmers to ramp up investment in expanding production, getting ready for market rebound.

However, several participants voiced concerns over the support scheme's accessibility as businesses have reported certain banks' unwillingness to take part.

In a recent survey conducted by VASEP, businesses and farmers are especially interested in low-interest loans in both US dollar and Vietnamese dong, with banks implementing a more streamlined loaning process.

"The credit ratio for export companies is expected to increase to over half of the funds in the remaining months of 2024, almost double the amount disbursed to them so far," said a VASEP representative.

Trinh Duc Kien, Deputy Director of a wood export company, said many firms in the industry have been facing significant pressure to repay previous loans.

"In addition to lower rates, businesses also look forward to longer terms to repay their borrowings," he said. Kien also called for greater support to be provided to small and medium-sized enterprises (SMEs).

Phung Thi Binh, Deputy Director-General of Agribank, said the bank has experienced some difficulties during the implementation of the support scheme, including issues in managing cash flow and monitoring invoices by borrowers.

The central bank's deputy governor said it is in businesses' interest to work together with banks to work out solutions to preventing capital loss. Regarding a common request by businesses to extend borrowing terms, he said the decision falls under the banks' jurisdiction and discretion, but banks must do all they can to support businesses./.

Long An hosts meeting to help RoK businesses solve difficulties

The People’s Committee of the southern province of Long An on April 16 held a dialogue with enterprises from the Republic of Korea (RoK) to help them deal with difficulties and obstacles when doing business in the locality.

At the event, Korean businesses raised difficulties facing them such as fire prevention and fighting procedures, construction permits, infrastructure construction support to indirectly attract investment in hotels and resorts, and the establishment of Korean language faculties at universities and educational establishments in the province.

Ho Joong, Chairman of the Korean Chamber of Commerce (KOCHAM)'s chapter in Long An, proposed local authorities consider establishing a specialised post-licensing support unit dedicated to FDI enterprises, and learn from the similar function of the RoK’s “After Service” system.

Kang Chunseok, CEO of the Korea Speed Vina company, suggested Long An review value added tax refund procedures by cutting unnecessary ones, or simplifying them on a reasonable manner.

Speaking at the event, Secretary of the provincial Party Committee and Chairman of the provincial People’s Council Nguyen Van Duoc spoke highly of the role of Korean investors for economic development.

Chairman of the provincial People’s Committee Nguyen Van Ut assigned tasks to each department and unit to help RoK firms solve obstacles.

The RoK is one of Long An’s largest partners, ranking third among the 40 nations and territories pouring capital into the province with 208 projects worth 975 million USD. In the first quarter of this year, the province attracted six Korean-invested projects with a total capital of 26.4 million USD, accounting for 16% of its total FDI./.

Canada is second largest consumer of Vietnamese pangasius in CPTPP bloc

Canada has become the second largest consumer of Vietnamese pangasius in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) bloc, accounting for about 20% of total export turnover, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The first half of March saw Vietnamese pangasius exports to Canada edge up 7% to US$2.3 million against the same period last year, reported VASEP.

Between the beginning of the year and mid-March, Canada imported pangasius products worth more than US$8 million from Vietnam, representing an increase of 43% against last year’s corresponding period. 

Compared to other markets within the CPTPP bloc, Canadian consumers prefer dishes from pangasius fillets, frozen catfish fillets, and frozen pangasius slices.

Along with imports from Vietnam, Canada also purchased pangasius from other markets such as China, Thailand, and Indonesia. At present, the North American country has carried out a range of stringent inspections over imported products.

To further develop the market, VASEP experts have advised processors and exporters to continue improving product quality and strictly abiding by Canada’s standards and regulations.

Moreover, local firms are required to pay close attention to building stable and long-term partnerships with distributors and retailers in Canada, allowing Vietnamese products to reach foreign consumers in the most effective manner possible.

VinFast to showcase electric vehicles at MEVS 2024 Canada

Vietnam’s first electric vehicle (EV) maker VinFast Auto has unveiled that it will partake in the Montreal Electric Vehicle Show (MEVS) 2024 which is slated to run from April 19 to 21 in Canada.

This is the second time that the company has made its presence in the Canada show, affirming its effort in penetrating the North American market and its long-term commitments to promoting the green transportation revolution.

VinFast's showrooms to be located at the campus of the Montreal Olympic Stadium will provide visitors with unique experiences into VinFast’s two key EVs models, namely VF 8 and VF 9 in the North American market.

Most notably, visitors will be able to register for test drives of the VF 8 model and will gain greater insights into the advanced technologies features of this electric SUV.

Robert Muller, deputy CEO of VinFast Canada, said, "We are very excited to return to this year's Montreal Electric Vehicle Show. We had a wonderful experience meeting our fans and future customers at MEVS last year and we are looking forward to once again showcasing our lineup of high-quality fully electric vehicles that are well-positioned to meet the needs of Canadian consumers."

MEVS 2024 is Canada's leading electric vehicle show, that will feature nearly 70 EV models from over 20 of the world's leading automobile brands.

Workshop talks human resources development for semiconductor industry

A workshop on human resources development for the semiconductor industry was held in the northern province of Bac Giang on April 16.

During the workshop, Chung Won Seok, general director of Hana Micron Vina Co., Ltd. - a firm which specialises in manufacturing semiconductors and memory chips in the Republic of Korea (RoK), revealed the company has begun to cooperate with a number of colleges in Bac Giang to train the local workforce for production activities.

Currently, the enterprise boasts more than 1,600 employees working in two factories in Bac Giang an Bac Ninh provinces and is continuously recruiting engineers for production activities.

The semiconductor industry is in its infancy in Vietnam and it has much potential for strong development in the coming years, said the Korean CEO.

Nguyen Xuan Ngoc, deputy head of the Management Board of Industrial Parks of Bac Giang province, said there are three enterprises operating in the semiconductor industry in the province’s industrial parks, namely the RoK’s Hana Micron Vina Co., Ltd, Si Flex Vietnam Co., Ltd, and France’s Synergie Cad Vietnam Co., Ltd.

The total number of employees working for enterprises in the semiconductor industry in the locality has now reached more than 8,000 people.

These firms are projected to continue investing in Bac Giang province's industrial parks, and to do this they should recruit more than 1,800 additional workers this year and 6,300 workers in the 2025 - 2030 period, Ngoc noted.

With a compound annual growth rate of 14% over the past 20 years, the semiconductor chip market is anticipated to become a trillion-US$ industry by 2030, and the market will need more than one million employees by that time.

Vietnam becomes largest banana exporter to Chinese market

Vietnam has surpassed the Philippines to become the largest exporter of bananas to China, accounting for 51.5% of the total amount of bananas imported by the market, according to the Import-Export Department under the Ministry of Industry and Trade.

The department cited statistics from the General Administration of Customs China, saying China imported 336,900 tonnes of bananas worth US$159.9 million during the first two months of the year, up 6.1% in volume but down 17.2% in value compared to the same period last year.

The average price of imported bananas reached US$474.5 per tonne, marking a drop of 21.9% year on year.

Vietnam alone exported 173,500 tonnes worth US$70.3 million to China during the reviewed period, up 21% in volume and 1.4% in value.

Most notably, China moved to increase banana imports from the Vietnamese market, but decreased imports from the Philippines. The Philippines’ low production output has fueled a general rise in costs, creating a significant price gap with Vietnamese bananas.

Moreover, according to information given by Import-Export Department, in the past Philippine bananas were highly appreciated due to their flavour. However, at present, the quality of the fruit is not meeting the expectations of consumers.

Therefore, Chinese customers are increasingly keen on Vietnamese and Cambodian bananas.

VARS: 70% of potential homebuyers ready to buy a home

There is a growing interest in real estate this year, with roughly 70% of would-be homebuyers expressing their willingness to spend when they find the right opportunity, according to the Vietnam Association of Realtors (VARS).

This finding came to light during a conference on the recent release of Vietnam’s quarterly real estate market report and quarter two forecast, held by VARS on April 15.

The first quarter of 2024 continued to see positive growth, driven by the approval of three crucial laws: the 2024 Land Law, the 2023 Real Estate Business Law, and the 2023 Housing Law.

Land and low-rise properties are in high demand, but with buyers taking a cautious approach.

Over 20,500 real estate products entered the market in the first quarter, including 4,300 new listings. Additionally, several large-scale projects, valued at billions of dollars, are expected to be launched soon.

Meanwhile, 1,250 affordable homes entered the market between January and March, with absorption rates in this quarter improving by five points over the final three months of 2023.

At the event, Pham Thi Hien, deputy head of Market Research and Investment Promotion Consulting at VARS, noted a shift in demand from affordable apartments towards low-rise properties and land plots due to decreasing supply in the former segment.

Primary selling prices remain stable, with a slight increase of 2-3% compared to the previous quarter. Newly-launched low-rise units and land are offered at competitive prices, while upcoming phases of apartment projects are expected to see price hikes of 10-20%, the report said.

Investments in HCMC industrial parks double in Q1

New investments in industrial parks in HCMC in the first quarter of this year rocketed 112% year-on-year to US$192 million, according to the HCMC Export Processing Zone and Industrial Park Authority (HEPZA).

Fresh foreign investments accounted for US$176.7 million, up 3.6-fold over the same period last year. In contrast, new domestic investments dropped by 63.15% against quarter one of this year to US$15.23 million.

Hua Quoc Hung, head of HEPZA, attributed the growth to stable operations within the industrial parks, with many previously struggling enterprises seeing a resurgence in orders.

Exports from the industrial parks in the first quarter were estimated at US$2.17 billion, rising 6% versus the same period last year.

Around 277,000 employees are working in these parks, a 10% rise from the end of the previous year.

Low emissions to stem from advances in rice

The production and trading of low-carbon rice will help increase value as well as protect Vietnam’s brand on the international stage.

SunRice, Australia’s largest rice production group, will start construction of a $3.8 million project in the Mekong Delta province of Dong Thap in May, marking deeper participation in the rice supply chain in Vietnam and responding to government initiatives.

At a working session with Dong Thap leaders in early April, representatives of the group said the new project would focus on building a rice silo system at its factory in Lap Vo district. The system will help businesses optimise rice purchasing during the peak harvest season, increase storage capacity, and ensure the factory operates continuously throughout the year.

SunRice Group entered Vietnam in 2018 through ownership of Ricegrowers Vietnam in Dong Thap. Since its inception, the company has prioritised investing resources in technology in agricultural production, such as using drones to spray pesticides in rice fields and applying machinery to growing rice to reduce emissions, ensuring farmers have a safe, sustainable, and highly productive working environment.

“SunRice’s rice export output this year is expected to double compared to last year,” said Nguyen Phuc Trai, general director of Ricegrowers Vietnam. “In 2023, the company exported 100,000 tonnes of rice, an increase of 7 per cent compared to the plan. We expect that by the end of 2024, the figure will increase to 200,000 tonnes.”

Since 2022, Ricegrowers Vietnam has been coordinating with the Australian Centre for International Agricultural Research to develop a supply chain in the Mekong Delta region with the goal of developing high-yield and high-quality rice varieties for the international market.

“We focus on three goals: improving the quality of Vietnamese rice, bringing rice products to high-end markets, and contributing to increasing income for farmers in the delta. The connection between small farmers to high-end markets in Europe and South Korea has been initially successful and rice products have been positively received by customers,” Trai said.

Vietnam is currently the third-largest rice exporter in the world, after India and Thailand. According to the Ministry of Agriculture and Rural Development, Vietnam’s rice exports reached more than 2.1 million tonnes in the first quarter of 2024, worth $1.4 billion, an on-year increase of about 42 per cent. Vietnam’s main rice export markets are the Philippines, Indonesia, China, Ghana, Malaysia, and Singapore.

With the desire to diversify the market and improve the quality of Vietnamese rice, the government has approved a sustainable development project of ensuring one million hectares specialising in high-quality rice cultivation with lower emissions in the Mekong Delta, as a solution to stimulate the rise of the top rice granary in the country.

The project’s goal is to reduce the amount of chemical fertilisers and pesticides of chemical origin by 30 per cent, and decrease the amount of irrigation water by 20 per cent when compared to traditional farming.

Aside from the goals, the high-quality cultivated rice products are very popular with demanding export markets, contributing to increasing the rice chain by up to 40 per cent and bringing profit margins of over 50 per cent to growers.

Tran Truong Tan Tai, general director of VinaRice, said that building a high-quality and stable rice brand for export is the reason why the business was paying more attention to testing and replicating high-quality rice fields.

“Supporting the government’s rice goals is not only a way to protect the Vietnamese rice brand, but also a way to motivate businesses to continue bringing high-quality products to the global market,” Tai said.

VinaRice owns a 32-hectare rice field model in Tam Nong district of Dong Thap and aims to expand it further by the end of this decade. VinaRice will also be the focal point for technical training, seed supply, monitoring, evaluation, and product purchasing for farmers.

According to Nguyen Duy Thuan, CEO of Loc Troi Group, if the government’s low-emission rice growing programme is to be effective, it must inspire farmers to change their working habits.

When cooperating with Loc Troi, farmers will reduce the risk of chemical exposure because the company deploys a footprint-free field model, using drones to spray chemicals instead of letting farmers spray manually as before. Using drones also limits the amount of water per spray, from 300 litres per ha to only 17 litres.

Loc Troi began researching the low-carbon rice growing programme in 2016 and put it into practice in 2019. Since then, the enterprise has been among the most effective in the world in terms of green production and low-carbon emissions.

“The biggest motivation comes from Loc Troi’s vision of becoming a sustainable agricultural company, protecting the environment, and ensuring a liveable rural environment for farmers,” Thuan said.

According to him, the business is capable of supplying 10 million carbon credits to the market each year at a price of about $5 each. The expected revenue from selling carbon credits could reach $50 million.

In 2024, Vietnam expects rice exports to hit $5 billion. Last year, it sold 8.13 million tonnes worth $4.7 billion, a record high in recent years.

Disbursement delay deemed unacceptable

Public investment continues to suffer from poor disbursement, with names of culpable units being highlighted by the government.

A list of authorities that have not yet allocated all of their state budget investment plans, and details of disbursement rates as of the end of March, has been published on the Ministry of Planning and Investment (MPI) portal.

The agriculture, health, and culture ministries as well as people’s committees of Ho Chi Minh City, Dong Nai, Quang Nam, Cao Bang, Thai Nguyen, and many others are mentioned.

Last year, following poor allocation and disbursement of public investment, the prime minister requested local authorities at all levels to “urgently allocate details of the state budget capital investment plan in 2024 without delay”.

However, according to the MPI, as of the end of March this year, about $1.3 billion out of over $27 billion of planned capital for 2024 was not allocated, including nearly $400 million from the central state budget and the remainder from the local budget.

“We are working with the Ministry of Finance on reports to authorised authorities on reducing the central budget capital investment plan for 2024 from areas that have not yet been allocated in detail,” said Minister of Planning and Investment Nguyen Chi Dung.

Among the top reasons for slow disbursement, many newly started projects have yet to carry out investment procedures to qualify for the annual capital plan.

In 2023, disbursement of public investment was more than $27.5 billion, equivalent to 93 per cent of the plan set forth. That means over $2 billion was not used.

“We know that some of this amount will be spent in 2024, but if public investment were fully allocated and disbursed, investment performance will improve with a more positive impact on economic growth last year, and being a better foundation for future development,” Minister Dung said.

In 2023, disbursement of public investment was good, but did not reach the target of 95 per cent. This year, this target remains the same, Dung said, and to achieve it, the government has urged departments to spend the money.

Thanks to efforts in holding meetings and creating relevant working groups, in the first three months of 2024, disbursement of public investment reported positive outcomes of about $3.75 billion being spent, equal to 13.67 per cent of the plan, and higher than the same period last year.

However, based on disbursement rate, while there are four ministries and agencies and 23 localities achieving high rates of over 20 per cent of the assigned plan, nearly 40 ministries and agencies and 26 localities have reported disbursement rates below the average of the whole country. Some agencies have been reported zero disbursement this year so far.

Minister Dung pointed out some difficulties such as there not being enough sand for the construction of many key highway and road projects, especially in the Mekong Delta and the southern region, affecting construction progress of projects (see below).

There are also inherent difficulties such as slow site clearance, untimely investment procedures, and poor contractor capacity, which also affects the speed of public spending.

“Authorities at all levels must promote the allocation and disbursement of public spending as a key political task to ensure economic growth. We should promptly handle and remove difficulties in the supply of sand and stone to speed up the progress of key national projects,” said Minister Dung.

Minister of Transport Nguyen Van Thang said that in 2024, the ministry will strive to spend all the allocated capital. In 2024, his ministry was assigned nearly $2.4 billion in planned capital; almost $450 million of this was disbursed by the end of March, reaching 19 per cent of the yearly plan.

Nguyen Duc Trung, Chairman of Nghe An People’s Committee, said that the province had outlined its plan in detail and had already disbursed over 20 per cent. “We are determined to ensure disbursement of public investment capital this year. The provincial government has made great efforts to work with investors of projects that have low disbursement rates, remove problems and ensure disbursement,” Trung said.

Lack of sand prompts alternatives for traffic projects

Despite the efforts of contractors for construction ventures, finding other materials or exploiting sources to replace sand has proved too tough a task, affecting the progress of various traffic infrastructure projects and public investment disbursement in the south of the country.

Struggling with a serious sand shortage over the past several months, construction contractors of major transportation projects up and down Vietnam are seeking solutions.

At the Tham Luong, Ben Cat, Nuoc Len canal project, in addition to tracking down legal sand sources, the contractor has been researching the reuse of excavated soil for on-site levelling and road foundations.

Trinh The Vu, representative of Saigon Traffic Construction JSC, said that good soil layers will be retained for leveling to replace sand.

“About half of the 3,000cu.m of excavated soil will be used for on-site levelling. Processes like soil quality testing and compaction testing are recorded and sent for inspection,” Vu said.

He added that replacing sand with qualified on-site soil gave quite positive initial results. “The samples are satisfactory. After testing, we will submit results to management for approval. If successful, we will use the soil at the project itself, reducing costs and speeding up the progress of the project,” Vu said.

Meanwhile, the Ministry of Industry and Trade is working with Cambodia on a plan to import sand for construction purposes (see Box). Earlier, TNT Group proposed to import sand from Cambodia as filling material for highway projects.

At the end of March, the Vietnamese government issued a notification to ensure an adequate supply of materials for Ho Chi Minh City’s Ring Road 3 project, as well as and highway projects in the Mekong Delta region.

The Ministry of Natural Resources and Environment immediately established an interdisciplinary working group led by a deputy minister, along with the participation of the ministries of transport, construction, and agriculture and rural development, to resolve the source of backfilling materials.

The group will directly work with the southeast and southwest provinces to apply policies in the exploration and licensing of filling materials for key transportation projects in the south.

Furthermore, this month, the Ministry of Transport (MoT) and relevant agencies will complete a plan for exploiting sea sand as filling material for expressway projects, which must clearly show the mining locations and usage addresses.

The Ministry of Construction will soon announce the price of materials exploited at the mine.

The MoT will collect, review, and re-evaluate the demand, supply capacity, and exploitation capacity of mines for levelling materials following the progress of each expressway project in the southern provinces, reporting to the prime minister.

Meanwhile, the Ministry of Industry and Trade is working with Cambodia on a plan to import sand as a construction material.

TNT Group is licensed by Cambodia to exploit sand on the Mekong River with reserves of about 30,000-50,000cu.m per day. Therefore, the enterprise is committed to meeting the needs of expressway projects in the Mekong Delta in terms of quantity, quality, and price.

TNT has asked the government to allow pilot import of sand to address shortages. “We need good mechanisms in terms of administrative procedures, transportation, and credit sources to import sand in large quantities,” a representative of TNT said.

In recent months, the third construction package for Ho Chi Minh City’s Ring Road 3 across Thu Duc had to be carried out in moderation because sand supply was limited.

This is a viaduct construction package, but the road must be reinforced and parallel roads built. Due to such obstacles, the contractor cannot carry out the work simultaneously even though the surface has been cleared.

Pham Dang Huyen, an engineer of the contractor consortium, said package 3 needed more than 200,000 cu.m of sand this year, and about 25,000 cu.m in April alone, but they were currently stuck.

“Numerous mines in the southern provinces have had to close, or priority has been given to local projects and the North-South Expressway, while some others have low reserves or have expired and wait for reissue procedures. Buying sand on the market is not easy because the materials for the projects need a clear origin and documentation in order to move forward,” Huyen said.

In the northwest of Ho Chi Minh City, package 8 for the ring road, through Hoc Mon district, is also struggling with a lack of sand. Hoang Phuc Thinh, head of a construction unit under CIENCO4 Group, said they required about 1.7 million cu.m of sand for the foundations, but since last August have only mustered a paltry 3,000 cu.m.

“The lack of sand makes construction difficult while we are handling ground treatment,” Thinh said.

“The average waiting time for road surface subsidence and loading is 12-16 months, so we need enough sand for the whole package at the start of May to complete all works in time.”

The lack of sand is an obstacle for all highway projects in the Mekong Delta region. The Can Tho-Ca Mau expressway started in January 2023 and has completed more than 20 per cent.

However, in the past few months, many bidding packages for the 110km works have been carried out in moderation. The project is six months behind schedule.

The 188-km Chau Doc, Can Tho, Soc Trang expressway construction scheme is also facing a serious sand shortage. The investor said that the project requires 31 million cu.m of sand, and eight million cu.m of this has yet to be sourced.

Sand reserves in the Mekong Delta provinces are still abundant, but sand mines are not allowed to exploit all the reserves because the sand is taken from upstream alluvium. Therefore, too much exploitation will impact flow and erosion, and cause a risk of landslides.

SK E&S and T&T Group research LNG project in Quang Tri

A consortium of investors, including South Korea's SK E&S and Vietnam's T&T Group, have made a proposal to research the development of a liquefied natural gas (LNG) project in the central province of Quang Tri.

After reviewing the proposal, Quang Tri Department of Planning and Investment has given approval for the consortium to carry out a feasibility study.

However, Quang Tri authorities will still need to check if the project falls into the provincial master plan as well as National Power Development Plan VIII (PDP8).

In addition, the province is completing procedures to terminate an MoU on the construction of a long-stalled thermal power plant in the province. The MoU was signed by Thailand's EGAT International Co. Ltd and Quang Tri People's Committee.

Following the upcoming termination of the MoU, Quang Tri Department of Planning and Investment has recommended the granting of in-principle approval to the SK E&S and T&T Group consortium.

"According to PDP8, as of June 2024, if the Quang Tri thermal power plant project has not started, it can be switched from coal-fired to LNG power generation," said Pham Quang Minh, director of Quang Tri Economic Zones Management Authority. "The consortium of SK E&S and T&T Group has made a proposal to implement this project if the government approves the conversion from coal-fired to LNG power generation. The investors have also sent a proposal to the prime minister."

The 1,200MW thermal power plant would have covered 450 hectares in Quang Tri. The project, approved in 2013, has yet to be launched, although local authorities and EGAT held a groundbreaking ceremony in 2019.

Global aid for energy transition ramps up

Vietnam has earned a great deal of financial and technical assistance from the international community in recent months for its energy transition.

Washington State’s Office of the Governor last week led a delegation of about 46 leaders from business, government, industry, and education on a five-day trade mission to Vietnam. The delegation was focused on strengthening trade and collaboration opportunities in advanced technology sectors such as agriculture, clean energy, and AI. The US has pledged to support Vietnam in advancing climate, energy, and the environment, among other areas.

“As the Just Energy Transition Partnership (JETP) turns towards implementation, the US is enhancing technical assistance support for Vietnam’s clean energy transition, including through the Vietnam low-emission energy programme,” the embassy said.

“The US Department of State, Vietnam’s Posts and Telecommunications Institute of Technology, and VMO Holdings have launched the Coalition for Climate Entrepreneurship Hub to promote startup activities in the field of climate change. Meanwhile, the US Department of Agriculture’s Foreign Agricultural Service signed an MoU with Vietnam’s Ministry of Agriculture and Rural Development’s Plant Protection Division to make better use of fertiliser to reduce costs, greenhouse gas emissions, and water pollution,” it added.

The US and nine international partners launched the JETP with Vietnam in 2022 that provides investment and technical expertise to help Vietnam transition its energy sector and reach net-zero greenhouse emissions by 2050.

At a meeting in New York on April 6 between Vietnam’s Deputy Prime Minister Le Minh Khai and Amina J. Mohammed, Deputy Secretary-General of the United Nations, the latter said that UN organisations stand ready to support Vietnam in mobilising sufficient resources to accelerate all development goals.

According to Vietnam’s Power Development Plan VIII (PDP8), in order to achieve energy transition, Vietnam would need about $134.7 billion from domestic and international sources by 2030, of which around $120 billion would be for power generation sources and the rest for the power transmission grid expansion and improvement. This would come from both domestic and international public and private sources.

This excludes costs of just aspects and research with relevance to the power sector, whereas the PDP8 estimate includes investments in new fossil fuel power generation, which is inconsistent with the JETP scope. Nevertheless, a significant part of PDP8 projects will match JETP priorities, including renewable power production, energy storage, and many transmission investments.

Exactly which part of PDP8’s projection matches the JETP scope cannot be as ascertained, but it is likely to be several times the total of €15.5 billion ($16.8 billion) committed by members of the International Partners Group and the Glasgow Financial Alliance for Net Zero, whereas they aim to leverage and raise additional funding, depending on the Vietnamese policy environment.

“The plan will help boost Vietnam’s renewable energy production. From a planned 36 per cent of renewables that Vietnam has in its electricity production, the country now aims for 47 per cent in its energy mix,” said European Commission President Ursula von der Leyen. “The plan is tailored to the needs of the local economy and society. It will help develop wind and solar power, grids, or electric vehicles, for example.”

At a Hanoi meeting two weeks ago between Deputy PM Tran Hong Ha and Tanimoto Masayuki, managing director of the Japan Bank of International Cooperation (JBIC), the latter said the JBIC will support Vietnam in green energy development.

Last December, JBIC signed an MoU with VietinBank to support decarbonisation and the energy transition, as well as to support Japanese mid-tier enterprises and smaller businesses entering its market.

A couple of months previously, JBIC also inked loan agreements with Japan’s Erex Co., Ltd for biomass manufacturing and sales business through its two subsidiaries in Vietnam, Erex Sakura Biomass Tuyen Quang and Erex Sakura Biomass Yen Bai, with each amounting to $6 million. The loans are co-financed with Sumitomo Mitsui Banking Corporation.

Strengthening consumer protection and improving debt collection critical to promote consumer lending development: conference

It is critical to strengthen consumer production and improve debt collection regulations and practices to ensure a sound and effective development of the consumer lending market in Việt Nam, heard a conference jointly held by the Việt Nam Banks Association (VNBC) and the International Finance Corporation (IFC) on Tuesday.

According to Daryl Dong, IFC’s Country Principal Officer, lending to individuals is going through a rough patch right now. The consumer credit market points to a slowing growth due to the downturn in labor-intensive sectors, adverse external market conditions, reduced credit demand, tightened underwriting and rising delinquencies.

Stressing that it is a tough time for consumer lenders, Daryl said that non-performing loans (NPLs) in the sector have mounted significantly. He cited statistics of the VNBA that the market saw consumer NPLs around 5 per cent in 2022 and over 10 per cent in 2023. The ratio is probably trending upwards this year, he said.

He pointed out the reasons are that the market disruptions of COVID-19 pushed many low-income earners who represent the main customers of consumer credit into struggling indebtedness, coupled with the take-on of credit to purposely default.

“Enhancing the effectiveness in consumer debt collection is particularly important. And the development of a robust and professional NPL trading market with the participation of professional NPL trading and servicing companies is instrumental in NPL resolution,” Daryl said.

VNBA estimated that lending to individuals was estimated to total around VNĐ2.8 quadrillion as of the end of 2023, or 21 per cent of the total outstanding loans in the economy.

Among 16 financial companies licensed in Việt Nam, 15 are in operation with a total outstanding loans worth around VNĐ138.8 million, accounting for a modest share of around 5 per cent in in the total lending to individuals. NPls account for nearly 18 per cent of consumer loans in the whole system.

Nguyễn Quốc Hùng, VNBA’s Vice Chairman, said that consumer lending is potential in Việt Nam but is in a tough time. Many lenders are struggling, even suffering loss due to high provisions for bad debt risks and difficulties in collecting debts, he said. Meanwhile, usury is booming, especially in rural areas.

Nguyễn Hồng Quân, a member of the VNBA Council, said that consumer lending operations face a few difficulties and barriers.

Those include the misunderstanding about commercial banks and finance companies, the explosion of consumer loan fraud and non-repayment and the rising debt collection criminals.

Besides, there are no sanctions for customers who default or avoid debt repayment or are with NPLs.

 There is also a lack of professional debt collection tools and intermediary organisations to support commercial banks and finance companies in debt remainders and collection. Debt collection services are prohibited from January 1st, 2021.

Quân said that one important solution to promote the development of consumer lending is to increase awareness and responsibility of borrowers. It is also necessary to develop a citizen credit scoring system together with improving the transparency in consumer lending operations, he said.

According to Moon Youngso, representative of the Founding Committee of the Debt Trading Association, establishing a code of conduct for debt recovery activities is needed to establish a detailed legal framework and clear mechanism for debt recovery.

“The code of conduct ensures all transactions and communications with customers align with legal provisions and societal norms.

Besides, the code of conduct also helps protect the rights of customers and businesses because it ensures debt recovery processes are conducted fairly and appropriately, minimises operational risks and improves efficiency in recovery operations.

Importantly, establishing a code of conduct helps the organisation operate within legal boundaries, encouraging an efficient, fair, safe and sustainable business environment, Moon stressed.

Lê Quốc Ninh, Chair of Việt Nam Consumer Finance Club, said that Việt Nam should complete the legal framework for consumer lending market to ensure its on-track development, meet the credit needs of the people and contribute to limiting black credit markets.

He said consideration should be given to allowing and managing professional debt servicing. Currently, debt collection service is prohibited under the Investment Law 2022, while black debt collection activities have not disappeared but become transformed and hidden and are unable to be controlled.

He pointed out that Việt Nam still lacks professional debt servicing services while this is popular in developed countries.

The Circular No 43/2016/TT-NHN on consumer lending operation of finance companies should be amended to create a healthy environment for the consumer finance market in Việt Nam, Ninh said.

He proposed the Ministry of Public Security develop detailed and consistent guidelines to handle and prosecute criminal liability for intentional evasion of debt repayment obligations. 

DATC warns of fraud, imposters

The Vietnam Debt and Asset Trading Corporation (DATC) has issued a fraud warning after reports of scammers impersonating DATC's employees, contacting people who have lost money on corporate bonds and other investment activities and offering to help recover their assets. 

The DATC said imposters may forge seals, and documents using the DATC's info and signatures of its legal representative to lure potential victims. After promising they can help the victims recover their losses, imposters often demand money transfers as recovery fees. 

The corporation said in an official statement that DATC is a State-owned corporation handling debts among commercial banks and enterprises. The corporation does not engage, in any capacity, in individual asset recovery. 

DATC strongly recommends the public thoroughly verify the caller information and conduct their research before engaging in transactions. In cases of fraud or impersonation of DATC's employees, people should record the phone calls and report them to the authorities.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes