As of July, Vietnam has officially joined the World Bank’s upper-middle-income country group. According to the Global Green Growth Institute (GGGI), this is a significant achievement, coming as Vietnam enters its next phase of growth focused on higher-value industries, advanced manufacturing, AI, and data centers, while continuing to pursue its net-zero target.
New energy challenge
Revisions to the Law on Petroleum 2022, including provisions on carbon capture and storage (CCS) and offshore energy, are a positive step, particularly in leveraging the petroleum sector’s existing assets and capabilities to develop new energy sources.
Vietnam is therefore looking beyond traditional energy security toward a more modern investment framework that can support emerging areas such as CCS and offshore energy while making better use of existing petroleum infrastructure and expertise.
The question is no longer simply how to develop individual energy sources, but how to build an energy system and investment framework capable of supporting the country’s next phase of growth. That growth is already taking shape through higher-value industries, advanced manufacturing, AI, and data centers, alongside Vietnam’s commitment to net-zero.
Just a few years ago, the energy-transition debate focused largely on securing supply while modernizing existing systems. Today, electricity demand is rising in new ways, with AI at the center of the shift.
Global data centers consumed around 485 TWh of electricity in 2025. The International Energy Agency (IEA) projects this figure will reach some 950 TWh by 2030, after nearly doubling in five years. The issue is therefore no longer simply about the technology or energy sectors, but about energy planning, grid infrastructure, net-zero targets, and economic competitiveness. Governments worldwide are reassessing where new power supplies will come from, where grids need to expand, and how large new electricity users can be integrated into existing systems.
Energy efficiency is another important consideration for data centers. But efficiency does not necessarily mean sustainability. A highly-efficient data center can still run on carbon-intensive electricity. The source of power, water consumption, and full lifecycle impacts must therefore also be considered.
An even greater challenge is the need for reliable 24/7 electricity. The solution is not simply to add more renewable capacity, but to turn renewable energy into clean, round-the-clock power through stronger grids, energy storage, greater system flexibility, and more effective clean-power purchasing mechanisms.
This is not unique to Vietnam. Major economies are confronting the same question: how to scale AI and digital infrastructure while continuing to reduce emissions from the power system.
International lessons
There is no single model for responding to these challenges, but South Korea and Japan are increasingly treating AI infrastructure as part of a broader industrial and energy system.
South Korea is taking an integrated industrial approach, linking AI with semiconductors, infrastructure, physical AI, and international partnerships. Japan, meanwhile, is pursuing a more systemic approach through its “Watt-Bit” collaborative model, which seeks to turn the electricity demand of AI data centers into a driver for renewable energy while connecting power, telecommunications, and computing infrastructure.
Singapore has placed greater emphasis on sustainability, including efficiency standards for data center development. Beyond Asia, the EU is moving in a similar direction, with a stronger focus on energy and environmental performance in data center development.
Looking more broadly at greening AI, two approaches stand out. The first is to make AI itself greener through more efficient chips and servers, better cooling systems, clean electricity, responsible water management, and circular electronics. This applies not only to data centers but to the broader AI value chain, an area of growing interest for Vietnam.
The second is to use AI to accelerate green growth. AI can improve renewable energy forecasting, optimize grids and storage, increase industrial efficiency, support robotic waste sorting, enable precision agriculture, and improve climate-risk analysis, among many other applications.
The message is therefore two-fold: AI itself must become greener, while it should also help green the energy system and the wider economy. These goals, however, should be assessed separately. The benefits generated by AI should not be used to justify inefficient or carbon-intensive AI infrastructure.
At the same time, the pace of AI development should not be underestimated. It remains difficult to predict what the technology will be capable of even a few years from now. Precisely because its potential is so significant, the other side of the equation, how to power AI sustainably, must be addressed now.
The question is no longer whether AI will transform economies, but whether the AI transition and the transition to net-zero can advance together.
Energy, investment and green growth
Investor interest in Vietnam is increasing. More than $7 billion in investment has been announced for data center projects, including AI-focused facilities at various stages of development. Each new data center, however, represents a major new electricity load requiring reliable power around the clock. AI investment is therefore, in effect, also investment in 24/7 energy infrastructure.
If these investments move forward, Vietnam will need to develop reliable and increasingly clean power supplies in parallel. This includes expanding renewable energy, effectively implementing the direct power purchase agreement (DPPA) mechanism and other clean-power procurement models, and strengthening grid and storage infrastructure. These are not only digital infrastructure investments, but energy investments as well.
Vietnam has a significant opportunity to pursue its ambitions in AI and semiconductors while advancing its net-zero target. The country also has a strong foundation in electronics and manufacturing and is expanding clean-power development through a range of new approaches.
The challenge is no longer simply attracting investment, but turning investor interest into bankable projects that are ready for grid connection and can ultimately enter commercial operation. This extends beyond data centers.
A similar challenge faces the energy sector: accelerating the transition from policy and investor interest to actual implementation. Based on GGGI’s experience, several recommendations can help support energy investment.
First, generation, grids, storage, and major new sources of electricity demand increasingly need to be planned as an integrated system. This is one of the key lessons from Japan.
Second, policymakers should not wait for every regulation to be perfect before taking action. Priority projects and pilots can move forward with a degree of flexibility, allowing policymakers to learn, refine the framework, and scale up. Sandbox mechanisms can be particularly useful in this process.
Third, Vietnam should begin with credible minimum green requirements. As new sources of energy demand emerge while the country remains committed to net-zero, clear baseline requirements can be introduced first and strengthened progressively as the market develops.
Finally, investment remains critical. Investors need clarity and effective risk-mitigation measures, while projects require access to long-term capital.
Against this backdrop, the emerging Vietnam International Financial Center (VIFC) is seen as an opportunity to connect domestic and international capital with energy infrastructure, data centers, and green projects that are ready for investment. The key is to make these projects genuinely bankable.
Vietnam’s move into the upper-middle-income group is only a starting point. The country has greater ambitions for 2045, supported by Politburo Resolution No. 57, Politburo Resolution No. 68, the development of the VIFC, and its net-zero commitment. As AI data centers and other new industries expand, Vietnam will need a more resilient, diversified, and increasingly clean energy system backed by appropriate institutions and an investment-friendly environment.
The real opportunity is to advance innovation, growth, and net-zero together. If Vietnam can achieve that convergence, it could become a significant source of national competitiveness in the years ahead.
(*) Mr. Juhern Kim is Country Director of the Global Green Growth Institute (GGGI) Vietnam
