Giant Foreign Investment Projects Land in Vietnam

9:48:26 AM | 2/6/2021

The disbursement of foreign direct investment (FDI) capital from early this year to May 20 was estimated at US$7.15 billion, an increase of 6.7% over the same period in 2020, according to the Ministry of Planning and Investment.   

During the five-month period, the total newly registered and supplemented FDI capital posted nearly US$14 billion, up 0.8% over the corresponding period last year.

Five “blockbuster projects” in early 2021

According to the Ministry of Planning and Investment (MPI), foreign investors registered to invest in five gigantic industrial projects in Vietnam in the first five months of 2021.

As the strongest magnet to FDI flows in the first months of 2021, in addition to the US$3.1 billion Long An I and II LNG Power Plant Projects (Singapore) that produce, distribute and transmit electricity (licensed on March 19, 2021), Long An province is already home to 1,111 FDI projects with a total registered capital of more than US$9.17 billion, of which 588 operational projects account for US$3.624 billion or 39.4% of the total registered capital.

Can Tho City was the second-largest recipient of FDI funds. In the 5-month period, O Mon II Thermal Power Plant (Japan), registered to cost over US$1.31 billion for investment, will supply electricity for the regional grid and the national grid. Can Tho granted a business registration certificate to it on January 22, 2021.

Hai Phong City was also a top address for FDI flows. LG Display Hai Phong Project (South Korea) increased its investment fund by US$750 million (licensed on February 4, 2021).

In Quang Ninh province, the Jinko Solar PV Vietnam Photovoltaic Cell Technology Project (Hong Kong) registered to invest US$498 million to manufacture photovoltaic panels and other electrical equipment production. The investment registration certificate was granted on March 29, 2021.

Radian tire manufacturing project (China) in Tay Ninh province raised the investment fund by more than US$312 million, licensed on January 6, 2021.

Rapidly growing FDI scale

According to the Ministry of Planning and Investment (MPI), in the first quarter of 2021, FDI inflow to Vietnam (invested in new projects, added to existing projects and spent on share purchases) reached US$12.25 billion, of which US$8.46 billion was spent on 451 newly-licensed projects, up 24.7% in value but down 54.2% in projects from the same period last year.

As many as 67 countries and territories invested in Vietnam in the first four months of the year. Singapore took the lead with over US$4.8 billion, accounting for nearly 39.6% of the total.

Japan ranked second with over US$2.5 billion, accounting for 20.5% of the total. The investment from Singapore and Japan was mainly for fresh projects, accounting for 91.1% and 71.5% of their registered funds, respectively.

South Korea was the third-largest foreign investor in the Southeast Asian nation with nearly US$1.5 billion, accounting for 12.1% of the total, followed by China, Hong Kong and the United States.

According to Dr. Nguyen Thuong Lang from the National Economics University, as for FDI sustainability, Vietnam is experienced in assessing and choosing environmentally friendly projects.

According to the Ministry of Construction, in 2021, three areas of investor interests include residential real estate, office real estate and industrial real estate. Especially in 2020 and 2021, the demand for offices grew strongly.

By the end of the first quarter of 2021, the total investment fund for the real estate sector was US$600 million, up 56% year on year, accounting for 5.9% of the total FDI invested in Vietnam in the period.

Source: Vietnam Business Forum