FDI is set to see a large uptick in activity in 2023, photo Le Toan

A series of investment projects have been awarded, and investment commitments signed at a conference on February 5 in which local authorities in the north-central and central coast regions also granted 16 investment certificates totalling $5.6 billion and five MoUs on investment cooperation with a capital of nearly $700 million. The highlighted project is the $1.8 billion Son My II combined cycle gas turbine power plant invested by US energy major AES.

Minister of Industry and Trade Nguyen Hong Dien has also handed over a decision approving the investment policy for a project to build a combined gas turbine thermal power plant using liquefied natural gas, with a total investment of $2.1 billion in the south-central province of Ninh Thuan.

Seven international partners will support about $1.7 billion to invest in infrastructure, transport, urban development, and climate response.

There was a sharp increase in the number and value of new foreign investments in Vietnam in January, signifying an increase in confidence for further ventures this year. Some 153 new foreign-invested projects, valued at $1.2 billion, were granted licences, up 48.5 per cent in number and 3.1 times in value compared to last year.

These positive signs will contribute to reinforcing the ability to reach $36-38 billion of foreign-invested capital in 2023, which was predicted by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. The total disbursement of foreign investment this year is expected to hit $22-23 billion. The registered capital predicted for 2024 will increase by 30 per cent on-year.

Vice chairman of the Vietnam Association of Foreign-Invested Enterprises Nguyen Van Toan told VIR, “The forecasts from the FIA in Vietnam have a foundation. The agency usually works with large investors but details take time to be released. The opening of China’s economy might also change things.”

Statistics from the FIA have showed that in the last two years, China is in fourth position in the list of largest foreign investors in Vietnam with the total investment capital of $2.9 billion in 2021, and $2.52 billion in 2022.

“In general, there we have both positive and negative factors, impacting the foreign investment capital attraction of Vietnam. If we put these factors on the scale, the positive impact will be seen more clearly,” Toan said.

The demand for expanding operations in Vietnam still exists. Many large-scale foreign-invested manufacturers, such as Foxconn in the northern province of Bac Giang, are expanding their facilities to prepare for long-term investment plans.

Wu Ming Ying, president of the Dong Nai branch of the Taiwanese Chamber of Commerce in Vietnam, said, “Taiwanese investors funded 270 projects in the province with a total investment capital of $5.5 billion, becoming the second-largest investor in Dong Nai. Their investment was successful, so they have the intention to expand their operation and invest in new projects. Once the province expands the industrial infrastructure, it will lure a large capital inflow from both Taiwan and other regions.”

Along with the industrial sector, foreign investors are paying attention to the other investment sectors in Dong Nai, such as real estate, logistics, technical infrastructure, and renewables. They have available capital, but are waiting to complete procedures to implement investment projects.

For example, Japan’s AEON Mall has plans to build a $268-million shopping centre in Bien Hoa city of Dong Nai, which will contribute to its plan to build 30 trade centres in Vietnam this decade. Amata Group from Thailand is waiting for the procedure to develop four projects in Long Thanh district worth a half billion dollars, while LG group is paying attention to smart city projects in the province.

Ho Chi Minh City is also trying to work with Intel Products Vietnam to lure new projects.

Pham Tuan Anh, deputy head of the Foreign Economic Relations Division at Ho Chi Minh City Department of Planning and Investment, said, “Intel Products Vietnam plans to develop $3.3 billion in projects. If the city succeeds in attracting this project, the city is estimated to lure $7.4 billion in foreign-invested capital for the year.”