Prevailing financing risks must be mitigated for success

Vietnam is doubling down on infrastructure investment across key sectors, from renewable energy to transportation and water.

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Denesh Srishanker, head of Credit Enhancement Facilities at Private Infrastructure Development Group (PIDG), shared with VIR's Thanh Van about Vietnam's push to mobilise infrastructure investments.

What role does infrastructure investment play in helping Vietnam achieve this target?

Vietnam's socioeconomic development plan has set out an ambitious target of achieving 10 per cent GDP growth per year between 2026-2030. Infrastructure is a key variable in ensuring the growth of its industries.

Establishing infrastructure in key sectors like transportation, telecommunications, renewable energy, water and agriculture would provide the foundation for long-term development. These infrastructure sectors would not only support economic growth but also ensure equitable access to resources and opportunities, provide climate-resilient stability, and enable greater self-reliance for energy supply in an increasingly volatile global scenario.

Vietnam faces significant challenges in infrastructure financing, and sees a shortfall between public sector resources and private capital requirements. According to the Global Infrastructure Outlook, Vietnam will need nearly $600 billion in infrastructure investment by 2040 to meet its development objectives. However, current projections indicate that Vietnam will attract around $500 billion, leaving a $100 billion funding gap.

Which infrastructure sectors should Vietnam prioritise to support its growth target?

As Vietnam experiences rapid economic and industrial growth, its electricity demand has grown by around 10 per cent annually. This demand has seen a rise in coal-generated energy in Vietnam by over 40 per cent of its energy mix in 2023.