After its hugely successful solar power development program under a very lucrative FIT mechanism, Vietnam has become more cost conscious and moves now to a competitive auction based system for large scale PV deployment. To get this transition right, Vietnam is being supported with $1.5 million from the World Bank / GIF for a pilot program. Pictured is Trung Son Hydropower project site in Vietnam. (Photo Credit: Mai Ky/World Bank)
- GIF has approved funding of $1.5 million to the World Bank that’s helping Vietnam design and structure its solar auction program
- The pilot program by the Vietnamese Ministry of Industry and Trade is being conducted to attract private investment in renewable energy segment
- According to the bank, the competitive auction pilot for solar will help the country move away from FIT based PV development mechanism to an auction based one
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The World Bank is helping the Vietnamese government to design and structure an auction program. The plan is to steer away from a feed-in-tariff (FIT) regime to a competitive auction based mechanism for the South East Asian solar power generation plans. For this Solar Pilot Auction Program, the bank has now secured $1.5 million in funding from the Global Infrastructure Facility (GIF).
Through this pilot, GIF and the World Bank will support Vietnam to address the increasing electricity demand in the country, promote inclusive growth and strengthen enabling environment for the private sector to participate in the same, said the bank.
With a view to achieving 12 GW of grid connected solar power capacity in the county by 2030, the pilot project by the Vietnamese Ministry of Industry and Trade is part of the country’s efforts to attract investments in the energy efficiency and renewable energy sector.
“This would be the first solar auction program to be implemented in Vietnam, which would have large scale replicability,” said GIF Head Jason Lu. “We are pleased to support the Government of Vietnam as they mobilize private financing through standardized, transparent, and programmatic approaches.”
Earlier in December 2019, the country’s Prime Minister Nguyen Xuan Phuc issued a notification 402/TB-VPCP to move the country towards a competitive auction mechanism for large scale solar deployment (see Vietnam Switching To Auctions From Solar FITs).