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2017: FDI Attraction and Disbursement Set Records

Posted: Sunday, December 31, 2017

2017 becomes the year of records in foreign investment attraction and disbursement in Vietnam.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, in 2017, foreign investment into Vietnam has been the highest in 10 years. As of December 20, 2017, the total foreign investment capital in Vietnam, including capital from new projects, capital from existing projects and capital used for equity purchases, amounted to US$35.88 billion, an increase of 44.4 per cent over 2016.

Vietnam licensed 2,591 new projects with a total registered capital of US$21.27 billion, an increase of 42.3 per cent over 2016 and allowed 1,188 projects to adjust their registered capital value with an addition of US$8.41 billion, up 49.2 per cent from a year earlier. Foreign investors made 5,002 share purchase deals and investment pooling worth US$6.19 billion in the year, up 45.1 per cent.

Thus, both foreign direct investment (FDI) and portfolio investment capital made a record. The combined FDI value was over US$29.68 billion and the indirect capital via off-exchange share purchase and investment pooling was US$6.19 billion.

FDI disbursement has also set a record high of US$17.5 billion, the highest-ever since Vietnam started FDI attraction 30 years ago. In the past 10 years, disbursed FDI only revolved around US$11-12 billion, causing many experts to cast doubt on capital absorptive capacity of the economy.

In fact, this was counted only FDI, not portfolio capital. When reporting to the National Assembly in late October 2017, the Foreign Investment Agency estimated that portfolio investment disbursement could amount to US$3 billion. This mean that disbursed foreign investment might reach over US$20 billion in 2017, helping boost gross social investment and strengthen the foundation for accelerating economic growth.

The impressive records are importantly contributed by five billion-dollar projects in the year: US$2.79-billion BOT Nghi Son 2 Thermal Power Plant with the installed capacity of 1,200 MW invested by Japanese investors in Thanh Hoa province, the US$2.58-billion BOT Van Phong 1 Thermal Power Plant with the installed capacity of 1,320 MW invested by Japanese investors in Khanh Hoa province, and US$2.07-billion BOT Nam Dinh 1 Thermal Power Plant Project with the installed capacity of 1,109.4 MW invested by Singaporean investors in Thai Binh province.

Samsung Display increased its investment capital by US$2.5 billion in Bac Ninh province. The US$1.27-billion Block B - O Mon Gas Pipeline Project in Kien Giang province was among the others.

In addition, Smart Complex Project in Thu Thiem New Urban Area had a registered capital of up to US$885.85 million in Ho Chi Minh City.

Only five billion-dollar projects and the Ho Chi Minh City-based property project accounted for over US$12 billion, or over 40 per cent of the total registered FDI in Vietnam in 2017.

Mr Do Nhat Hoang, Director of the Foreign Investment Agency, said, drastic reforms in investment environment performed by the Government have a very positive impact on FDI inflows and are highly appreciated by foreign investor communities. Foreign invested companies have been playing an increasing important role in socioeconomic development in Vietnam.

Quynh Chi

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