Germany's PNE has lost bid for Vietnam wind projects, in a new blow to foreign investors
The Vietnamese authorities have selected a newly-created subsidiary of the real estate conglomerate Vingroup for the development of the first phase of the country's biggest wind power project, leaving out Morgan Stanley's German renewable company PNE. PNE said that the decision was a "surprise".
Hanoi cut retroactively subsidies last year for several renewable energy companies. Diverging opinions on electricity prices and deadlines also weighs heavily on foreign investment into the country's emerging liquefied gas and nuclear sectors.
Vingroup, Vietnam’s largest company in terms of market capitalisation and which has been expanding under the support of government policies, is delighted with this decision.
It has expanded its real estate business into tourism, healthcare and education. VinFast, a Nasdaq listed electric vehicle manufacturer, is owned by the company. Last year, it set up new companies in sectors such as railways, energy, entertainment, and space.
PNE INVESTED?MILLIONS OF DOLLARS
PNE had planned to invest $4.6billion in the 2,000 megawatt offshore wind project. The project was reclassified recently as nearshore, despite the fact that no changes were made to the original design.
Vietnam wants to have 6,000 megawatts in offshore wind power by 2030-2035, up from zero today. It also wants to be able to generate 38,000 megawatts through onshore and nearby projects.
In a letter dated earlier this week, the People's Committee of Gia Lai Province approved Vingroup's VinEnergo's bid for the first phase of the 750 megawatt project. The investment was 48.3 billion Dong ($1.9million). It did not mention PNE or another Vietnamese 'bidder' who were not chosen.
"We are surprised by this decision. PNE said that they are reviewing the reasons and will decide on the next steps after doing so.
VinEnergo, although it hasn't built any wind farms as yet, has been awarded other projects since its founding in March.
Vingroup and the Gia Lai People's Committee did not respond when asked for comments.
Two people who are familiar with the operation said that PNE has been working on the project from 2019. They have conducted feasibility studies and performed wind tests. Sources declined to be named as they weren't authorised to comment on the subject.
One person said that the company has already invested millions. PNE declined comment on costs.
Sources said Vietnamese authorities expressed unexpected concerns over PNE's commitment to finance. One source claimed that the firm was asked by Vietnamese authorities to deposit investment money into Vietnamese accounts in advance as a security. Morgan Stanley Infrastructure, a global investor, owns the majority of PNE.
On its website, the German company announced that it had opened an office and signed a Memorandum of Understanding with Vietnamese authorities regarding electricity pricing.
The Government supports National Champions
As part of global restructuring, multiple?Western Wind Companies have left Vietnam, including Norway's Equinor and Denmark's Orsted?and Italy's Enel.
To Lam, Vietnam's top leader is pushing for a new model of growth that supports national champions. This has at times caused friction with foreign investors who have been the 'backbone' of Vietnam's economic boom over decades.
Vingroup is a major winner of this new policy. Its shares soared by more than 700% in the past year.
Southeast Asia is home to many multinational companies that are geared towards exports.
As the country struggles with a significant increase in power generation, blackouts have occasionally occurred. The country has met its additional demands by burning more coal despite promises to reduce the use of this fuel.
(source: Reuters)
