Vietnam Infrastructure Report

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Q1 2024
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Vietnam
Infr
Infras
astructur
tructure
eRReport
eport
Includes 10-year forecasts to 2032
Exclusively for the use of Karissa Chua at Schneider Electric Asia Pte. Ltd. Downloaded: 05-Feb-2024
Vietnam Infrastructure Report | Q1 2024
Contents
Key View............................................................................................................................................................................................ 4
SWOT .................................................................................................................................................................................................. 6
Industry Forecast........................................................................................................................................................................... 7
Construction And Infrastructure Forecast Scenario ...................................................................................................................................................... 7
Transport Infrastructure...........................................................................................................................................................................................................13
Energy & Utilities Infrastructure ...........................................................................................................................................................................................21
Residential/Non-Residential Building................................................................................................................................................................................29
Industry Risk/Reward Index ....................................................................................................................................................34

Vietnam Infrastructure Risk/Reward Index......................................................................................................................................................................34
Competitive Landscape.............................................................................................................................................................36
Company Profile...........................................................................................................................................................................40
Electricity Vietnam Group.......................................................................................................................................................................................................40
Coteccons .....................................................................................................................................................................................................................................42
Vinaconex ......................................................................................................................................................................................................................................43
Infrastructure Methodology ....................................................................................................................................................45
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Key View
Key View: We forecast Vietnam's construction industry to expand by 4.6% y-o-y in 2023, before picking up to average 7.0% per
year between 2024 and 2032. We have revised down our near-term construction industry growth forecast for Vietnam from 8.4%
previously, as squeezed access to financing continues to stifle activity in the residential building sector. Construction industry
growth in H123 has also underperformed pre-Covid-19 growth rates. Weaker global demand and elevated borrowing costs will pose
additional headwinds for industrial construction in Vietnam. However, we expect the long-term trend of supply chain diversification
to support investment in Vietnam's transport and logistics infrastructure sector throughout the near-to-medium term, as the
country prepares to attract manufacturing capacity moving away from Mainland China. Over the long term, Vietnam will remain one
of the fastest-growing construction markets in Asia. This growth will be underpinned by strong demand fundamentals and rising
investor interests amid an ongoing government commitment to the sector across several development plans and reforms.
Key Forecasts And Latest Updates
• We forecast Vietnam's construction industry to expand by 4.6% y-o-y in 2023, before picking up to average 7.0% per year
between 2024 and 2032. We have revised down our near-term construction industry growth forecast for Vietnam from 8.4%
previously, as squeezed access to financing continues to stifle activity in the residential building sector.
Furthermore, construction industry growth in H123 has underperformed pre-Covid-19 growth rates.
• In December 2023, the Quang Tri People's Committee selected a consortium for the construction of the VND5.82trn
(USD239.4mn) Quang Tri Airport in Vietnam. The consortium will be led by T&T Transport Infrastructure Development and
Investment and CIENCO4 Group. The airport will cover 2.65sq km of land, excluding 512,000sq m of military land. The project will
comprise more than VND1.1trn (USD44.8mn) in equity capital and more than VND4.7trn (USD194.5mn) from credit and other
legal capital sources. The project will be implemented under a build-operate-transfer model, and the preparation and
construction phases are expected to be completed within two years.
• In October 2023, the Government of Vietnam broke ground for the construction of the Đại Ngãi Bridge over the Hậu River
between the Mekong Delta's Trà Vinh and Sóc Trăng provinces. The 15.14km bridge, which is estimated to cost more than
VND8.0trn (USD327mn), includes seven bridges and five intersections. Construction of the bridge is expected to be completed
by the end of 2026.
• In September 2023, the government of Ho Chi Minh City approved VND9.9trn (USD405mn) in funding for the construction of a
3.5km segment of the 64km-long Ring Road 2 project. The pre-feasibility study report for the Phu Huu Bridge-Vo Nguyen Giap
street section was approved by the Ho Chi Minh City People's Committee and the head of the city's Appraisal Council. The
planned section will include six lanes and an overpass under Metro Line 1. Construction of the project is scheduled to start in
Q225, with completion expected in Q426.
• In September 2023, ground was broken for the terminal building of Long Thanh International Airport in Vietnam. The airport is
being built by the VIETUR consortium led by Turkiye-based IC İçtaş Construction and will be located in Ho Chi Minh City. The
consortium will be responsible for the USD1.5bn first phase of the project. The project includes the terminal building as well as
equipment installations, and should be completed within 39 months.
Infr
Infrastructur
astructuree - Construction Industr
Industryy FFor
orecasts
ecasts (Vietnam 2022-2026)
Indicator 2022 2023e 2024f 2025f 2026f
Construction industr
industryy vvalue,
alue, VNDbn 589,712.3 637,194.8 713,145.2 793,979.9 882,991.0
industryy vvalue,
alue, rreal
eal gr
groowth, % yy-o-y
-o-y 8.2 4.6 7.1 7.6 7.5
industryy vvalue,
alue, % of GDP 6.2 6.2 6.3 6.3 6.3
e/f = BMI estimate/forecast. Source: Asian Development Bank, BMI
Infr
Infrastructur
astructuree - Construction Industr
Industryy FFor
orecasts
ecasts (Vietnam 2027-2032)
Indicator 2027f 2028f 2029f 2030f 2031f 2032f
industryy vvalue,
alue, VNDbn 977,320.0 1,080,815.8 1,194,935.9 1,320,116.2 1,457,863.7 1,609,380.9
industryy vvalue,
alue, rreal
eal gr
groowth, % yy-o-y
-o-y 6.9 6.8 6.8 6.7 6.7 6.7
industryy vvalue,
alue, % of GDP 6.3 6.4 6.4 6.4 6.4 6.4
f = BMI forecast. Source: Asian Development Bank, BMI
Risk/Reward Index
• Vietnam continues to outperform on our Infrastructure Risk/Reward Index and remains one of the most attractive investment
destinations for infrastructure.
• Vietnam outperforms on its Industry Rewards, underpinned by our robust growth forecasts for the market. Strong regulatory
support for the sector will continue to drive growth, while gradually improving its Industry Risks over our forecast period.
• While squeezed access to financing for domestic developers in the residential building sector will weigh on activity in the
property sector, it may provide opportunities for foreign firms to increase their presence.
Infr
Infrastructur
astructuree Risk/R
Risk/Rewar
eward
d Inde
Indexx (Vietnam 2023)
Geography Risk/Reward Index Rewards Industry Rewards Country Rewards Risks Industry Risks Country Risks
Vietnam 66.9 70.1 82.2 51.8 62.2 59.5 64.9
Note: Scores out of 100; higher score = more attractive market. Source: BMI Infrastructure Risk/Reward Index
SWOT
Strengths Weaknesses
• A strong project pipeline will sustain growth in the sector and • Power outages are frequent in Vietnam, highlighting the
add capabilities for further development, particularly as country's electricity shortage.
transport structure improves. • The country relies heavily on foreign imports, and it is
• Rapid growth and firm government commitment have estimated that the country requires 2.0mn tonnes of steel
attracted investment from many of the world's largest billets to be imported a year.
infrastructure companies. • The country offers a risky environment for major
• Sustained urbanisation, rapid industrialisation, the growing infrastructure projects, especially in relation to project
tourism sector and recent measures to reduce restrictions finance operations.
on foreign ownership of property have made the residential/
non-residential building sector more attractive for foreign
investors.
Opportunities Threats
• The country's longitudinal geography, with main economic • Further disruption in the aftermath of Covid-19 could impact
centers at each end of the country, will require substantial investor sentiment and weaken supply chains.
efforts to construct connections in grid and transport • Consistent fiscal deficits in Vietnam, as a result of a lack of
infrastructure. spending prudence, could undermine much-needed
• Demand for urban infrastructure projects in transport and infrastructure development and undermine the strong
sanitation over our 10-year forecast period to 2032 will rise, economic growth.
in tandem with urbanisation.
• Greater opportunities for public-private partnerships (PPPs)
as the government seeks to increase private participation in
the infrastructure sector. The newly enacted PPP Law could
serve as a catalyst for more private sector involvement.
• Efforts to implement reforms will help improve the market's
business environment, attracting greater foreign direct
investment.
Industry Forecast
Construction And Infrastructure Forecast Scenario
Key View: We forecast Vietnam's construction industry to expand by 4.6% y-o-y in 2023, before picking up to average 7.0% per
year between 2024 and 2032. We have revised down our near-term construction industry growth forecast for Vietnam from 8.4%
previously, as squeezed access to financing continues to stifle activity in the residential building sector. Furthermore, construction
industry growth in H123 has underperformed pre-Covid-19 growth rates. The transport infrastructure sector is forecast to expand
by 7.1% in 2023, with the strongest growth expected in roads and bridges, and then in railways. We expect the long-term trend of
supply chain diversification to support investment in Vietnam's transport and logistics infrastructure sector throughout the near-to-
medium term, as the country prepares to attract manufacturing capacity moving away from Mainland China. We forecast growth in
Vietnam's energy and utilities construction to average 5.9% annually between 2023 and 2032. We expect all power types across
Vietnam’s power market to increase in installed capacity over the coming 10 years. Non-hydropower renewables growth will be the
highest in terms of capacity, followed by fossil fuel capacity. Renewable power project developers will experience the most
opportunities in solar and wind.
Latest Developments
by the end of 2026.
Construction And Infr

Infrastructur
astructuree Industr
Industryy Data (Vietnam 2021-2026)
Indicator 2021e 2022e 2023e 2024f 2025f 2026f
industryy vvalue,
alue, VNDbn 506,097.1 589,712.3 637,194.8 713,145.2 793,979.9 882,991.0
industryy vvalue,
alue, rreal
eal gr
groowth, % yy-o-y
-o-y -0.3 8.2 4.6 7.1 7.6 7.5
industryy vvalue,
alue, % of GDP 6.0 6.2 6.2 6.3 6.3 6.3
Infr
Infrastructur
astructuree industr
industryy vvalue,
alue, VNDbn 136,884.41 157,433.10 173,691.68 193,697.76 212,414.79 232,997.79
Infr
Infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth, % yy-o-y
-o-y 7.8 6.8 6.8 6.7 6.0 6.0
e/f = BMI estimate/forecast. Source: National sources, BMI
Construction And Infr

Infrastructur
astructuree Industr
Indicator 2027f 2028f 2029f 2030f 2031f 2032f
industryy vvalue,
alue, VNDbn 977,320.0 1,080,815.8 1,194,935.9 1,320,116.2 1,457,863.7 1,609,380.9
industryy vvalue,
alue, rreal
eal gr
groowth, % yy-o-y
-o-y 6.9 6.8 6.8 6.7 6.7 6.7
industryy vvalue,
alue, % of GDP 6.3 6.4 6.4 6.4 6.4 6.4
Infr
Infrastructur
astructuree industr
industryy vvalue,
alue, VNDbn 255,864.58 281,014.19 308,551.03 338,694.99 371,686.70 407,789.73
Infr
Infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth, % yy-o-y
-o-y 6.1 6.1 6.1 6.1 6.0 6.0
f = BMI forecast. Source: National sources, BMI
Structural Trends
2023-2032: Numerous Growth Drives Make Vietnam A Regional Outperformer
In the near term, squeezed access to financing will limit construction growth in Vietnam's residential property sector, dragging on
overall construction growth in the country. Reportedly, developers had suspended USD34.0bn worth of projects by the beginning of
June 2023. Accordingly, construction industry growth in H123 disappointed, coming in at 4.7% y-o-y, which is below the pre-
Covid-19 average of 8.5% between 2015 and 2019. We expect construction industry growth to recover in 2024 to 7.1% y-o-y, as
pressure in the residential construction industry eases and public infrastructure investment continues to support growth. We
anticipate growth to average 7.0% per year throughout the remainder of our forecast period, making Vietnam one of the fastest-
growing emerging construction markets in South East Asia. This is due to the strengthening economy supporting fiscal expenditure
and attracting both foreign and private investment in real estate and infrastructure. Foreign direct investments will play an
increasingly important role in the growth of the sector, especially as the market is establishing itself as a base for export-oriented,
low-cost manufacturing as well as for tourism. This will sustain high levels of investor interest in the infrastructure and construction
sectors, which are also drawing support from rapid urbanisation rates in Vietnamese cities and a government-led reform drive that
should open new industrial sectors to investment.
Maintaining Strong Growth Trends

Vietnam - Construction Industry Value & Growth (2021-2032)
f = BMI forecast. Source: Asian Development Bank, BMI
Continued Government Support Under 2021-2025 Five-Year Plan
In February 2021, Vietnam approved the country's new five-year plan (FYP), which sets out the government's aims for improving
external market access, developing the domestic manufacturing base, achieving greater operational efficiency in state offices and
reforming education to enhance the labour market. In addition, the government has set out ambitious expansion plans for the
infrastructure sector and will look to improve conditions, laws and policies to foster greater infrastructure investment. Several large-
scale areas of focus were also highlighted, including transport; energy; information and communications technology (ICT); and
agricultural, rural, and urban infrastructure developments. We expect this to support our positive forecasts for growth from 2021
onwards:
Transport: By 2025, the country plans to complete the North-South expressway, Phase I of the Long Thanh International Airport,
more than 1,700km of coastal roads from Quang Ninh to Ca Mau and various major traffic works. The plans are also include
upgrading works for urban belt roads, highways and airports, as well as capacity enhancements for seaports and the regional railway.
Energy And Utilities: Power savings programmes will be implemented in production, transmission and distribution. The
government also aims to begin operating power source and transmission grid projects and to expand the power grid to rural areas,
borders and the islands, while ensuring energy security. The plan aims to encourage participation from the private sector.
ICT: This will involve improving the level of IT infrastructure across the nation; creating a system of national, regional and local data
centres; and ensuring 100% broadband internet coverage in the market.
Agriculture And Rural Infrastructure: This will entail irrigation works and reservoirs in the central highlands, the South Central
region and the Mekong Delta to improve water security for crop production and livelihoods. The existing level of infrastructure will
also be improved to account for the effects of climate change.
Urban Infrastructure: This section includes accelerating the completion of urban railway, road and other civil infrastructure
projects.
Vietnam, Cambodia And Laos Leading Regional Growth

Selected Asia Markets - Construction Industry Value Growth, % (2022-2027)
e/f = BMI estimate/forecast. Source: Local sources, BMI
New PPP Law A Milestone For Vietnamese Infrastructure Market
Robust growth will be supported by the new law on PPPs, which came into effect on January 1 2021. The FYP emphasises an
ongoing improvement to the regulatory framework for infrastructure developments, with PPPs playing a crucial role. The new PPP
Law unifies and clarifies Vietnam’s complex legal framework and eases existing legal bottlenecks. This is expected to improve
transparency and address the deficiencies of the previous PPP framework surrounding risk transfer, allocation and defining a
minimum threshold for investments. While the new framework still strays far from international standards, we believe this is still a
significant positive development that will reduce project risk and attract more private investments. Key highlights of the PPP law and
changes include:
• Types Of PPP Projects: Permitted sectors have been narrowed to transport, grid infrastructure and power plants, irrigation,
clean water supply, drainage, sewage treatment and waste, health and education/training, and IT infrastructure.
• Introduction Of Minimum Investment Value: The scale of the minimum total investment of the PPP project for each field
cannot be less than VND200bn, except for healthcare and education, where a lower threshold of VND100bn is applied. In certain
cases of geographical areas with difficult socio-economic, conditions the figure is not less than VND100bn. The private equity
capital contribution must be at least 15.0% of the total investment capital.
• Investor Eligibility: There is a selection mechanism for potential PPP investors, which we believe is included for transparency
and to ensure a minimum quality of bids. Potential investors will be considered if they meet a series of criteria explained in the
law, such as having an establishment and operation registration certificate issued by a competent agency of the market in which
the investor is operating, and if they have independent financial accounting.
• Revenue And Risk-Sharing Mechanism: A risk allocation scheme has been introduced for the first time, which can help
create more revenue certainty for PPP projects and reduce risks for investors. If actual revenue exceeds 125% of what was
planned, the PPP project investor will share 50.0% of the difference between actual revenue and the 125% benchmark. If actual
revenue falls below 75% of the initial projection, the state will share 50.0% of the shortfall with investors for projects that meet
certain regulatory conditions.
Roads And Bridges Dominate PPP Project Pipeline

Vietnam - No. Of PPP Projects By Sub-Sector
Source: BMI Key Projects Data
Road PPP Projects A Test
Based on our Key Projects Data, there are currently 176 infrastructure projects that are earmarked as PPPs. The majority of these fall
under the road and bridge sub-sector, with a total estimated value of USD32.2bn. We believe that PPP projects implemented in the
Vietnamese road and bridge sub-sector will serve as a test to assess the effectiveness of the new PPP Law. Vietnam’s rapid pace of
economic development, partially helped by its emergence as an alternative low-cost manufacturing hub to Mainland China, has
increased the need for the government to invest in providing quality infrastructure to support the flow of goods and services. One
key project is the North-South Expressway linking Hanoi to Ho Chi Minh City, for which the government had previously attempted to
implement parts of the project through the PPP model, but ultimately decided against it due to complications relating to bidding.
With the demand of road infrastructure increasing and the government-required private capital to share the burden of financing, we
believe that there will continue to be PPP opportunities in this sector despite the failure of the North-South Expressway PPP
scheme.
Greater Flood Protection Needed

Vietnam – Expected GDP, % Of Total & Population, MN Annually Affected By Coastal Floods (2030)
Note: Estimated protection levels vary by market. Source: World Resources Institute, BMI
As Vietnam is exposed to significant coastal flood risks, dredging will be key to mitigating the impact on industry and population;
thereby creating additional opportunities for dredging companies. High-priority measures alone would require investments worth
USD345mn, including revetment developments, the upgrading of dikes and river dredging. Among larger economies, Vietnam's
population is expected to be the second-most affected by coastal floods in 2030, trailing that of Bangladesh. The World Resources
Institute estimates that over 1.5% of Vietnam's GDP will be affected. While much shipping infrastructure investment will likely be
focused around Ho Chi Minh City, Hanoi and Haiphong, we expect flood risk mitigation measures to be spread across the country's
long coastline. Key high-priority measures identified by the World Bank include upgrading river dikes for around the amount of
USD76mn in Quỳnh Lưu, beach nourishment projects in Phan Thiết worth an estimated USD76mn and river diversion and beach
nourishment in Tuy An at costs estimated to total USD73mn.
Transport Infrastructure
Key View: The transport infrastructure sector is forecast to expand by 7.1% in 2023, with the strongest growth expected in terms of
roads and bridges and railways. We expect the long-term trend of supply chain diversification to support investment in Vietnam's
transport and logistics infrastructure sector throughout the near-to-medium term, as the country prepares to attract manufacturing
capacity moving away from Mainland China. Dredging opportunities in Vietnam's maritime infrastructure sector will benefit from the
government's ambitions to improve the country's maritime infrastructure and accommodate larger vessels in a drive to position
itself as an attractive destination for foreign direct investment.
Latest Developments
by the end of 2026.
• In June 2023, Vietnam started the construction of four components projects for the first phase of the 188km Châu Đốc-Cần
Thơ-Sóc Trăng expressway. The six-lane expressway project, estimated to cost VND44.69trn (USD803.76bn), will start from Trần
Đề port in Sóc Trăng province, run through Hậu Giang province and Cần Thơ City, and end in Châu Đốc City of An Giang
province. The project will be financed by the federal and provincial governments. The expressway is due to be completed in
2026, with the entire project expected to be completed in 2027.
• In June 2023, the Ho Chi Minh City Management Board of Traffic Works Construction and Investment broke ground to start the
construction of the VND75.4trn (USD3.2bn) Belt Road No. 3 project in Ho Chi Minh City, Vietnam. The 76.3km-long project will
serve four localities: Ho Chi Minh City (47.35km), Bình Dương (10.76km), Đồng Nai (11.26km) and Long An (6.81km). The project
will be financed via 50.0% from the central budget and the other half from the four localities. The road project is expected to be
fully completed in 2026.
• In June 2023, China Road and Bridge (CRBC), a subsidiary of China Communications, started the construction of the Phnom Penh
- Bavet (Svay Rieng) Expressway Project. The project, which will end at the border town of Bavet, will be built on a public–private
partnership (PPP) basis. CRBC will invest USD1.6bn in building the road for a 50-year concession. The 138km, four-lane road will
follow the route of the two-lane National Highway 1. Vietnam will build a motorway between Moc Ba and Ho Chi Minh City to
complete the connection. Both projects are expected to be completed within four years.
Transpor
ansportt Infr
Infrastructur
astructuree Industr
Indicator 2022e 2023f 2024f 2025f 2026f 2027f 2028f 2029f 2030f 2031f 2032f
Transpor
ansportt infr
infrastructur
astructuree industr
industryy vvalue
alue rreal
eal
7.6 7.1 6.9 6.1 6.1 6.1 6.1 6.1 6.2 6.2 6.2
gr
groowth, % yy-o-y
-o-y
Roads and bridges infr
infrastructur
astructuree industr
industryy vvalue
alue
8.7 7.5 7.6 6.6 6.6 6.7 6.7 6.7 6.7 6.7 6.7
real gr
groowth, % yy-o-y
-o-y
Railway
Railwayss infr
infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth,
7.0 7.2 5.8 5.4 5.6 5.7 5.8 5.9 6.0 6.2 6.3
% yy-o-Y
-o-Y
Airpor
Airports
ts infr
infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth,
3.9 3.8 4.2 3.9 3.8 3.9 3.9 3.9 3.9 3.9 3.9
% yy-o-y
-o-y
Por
orts,
ts, harbour
harbourss and water
waterway
wayss infr
infrastructur
astructuree
5.3 6.7 7.1 5.4 5.5 4.9 5.2 5.0 4.8 4.6 4.4
industr
industryy vvalue,
alue, rreal
eal gr
groowth, % yy-o-y
-o-y
Structural Trends
2023-2032: Growth Ahead But There Will Be Challenges
Vietnam's transport infrastructure sector offers immense growth potential throughout our forecast period; however, progress may
be limited by financial and logistical challenges. Breakneck economic growth, industrialisation and urbanisation over the past
decade has left much of the country's road, rail and port facilities struggling to cope with rising traffic numbers. Traffic congestion is
a worsening problem in the major cities of Hanoi and Ho Chi Minh City, while poor operational efficiency at ports threaten to put a
cap on exports. This has left the government with a long list of transport infrastructure projects in various stages of planning and
implementation, ranging from rapid transit systems and highways in major cities to long-term plans for a high-speed railway
spanning the length of the country. Vietnam's strategic position, along both land and maritime transport routes in South East Asia,
means that the country has the potential to become a regional trading and logistics hub. Given these supportive factors, we forecast
that the transport infrastructure sector in Vietnam will grow by 7.1% in 2023 and then at an annual average of 6.2% in real terms
between 2024 and 2032.
Financial and logistical challenges represent the main limitation to growth in the transport sector. Concerns about rising levels of
public and external debt have led to fiscal tightening measures, such as the official development assistance cap, which has led to
delays on foreign-financed projects, such as the metro lines in Hanoi and Ho Chi Minh City. The upside to the government's fiscal
constraints means that there is potential for the development of PPPs within the transport sector, especially for toll roads and
airports.
Urbanisation And Industrial Expansion Driving Transport Needs
Rapid growth in urban population and freight transport are the primary drivers of Vietnam's transport infrastructure needs. The
number of people living in urban areas grew from 19.0mn in 2000 to an estimated 37.4mn in 2021 (and is expected to rise to
47.3mn by the end of our current forecast period). Both Hanoi and Ho Chi Minh City are attempting to ease pressure on existing
networks and reduce air pollution by building rail transit systems, alongside traditional urban highway and road improvement
initiatives. Rising demand for intercity passenger and freight transport has prompted the government to build and upgrade the
roads and railways running through the country. Poor operational efficiency at many of Vietnam's ports will attract managerial and
consulting opportunities from global port operators and maritime services companies. That is, while Vietnam's ports have sufficient
theoretical capacity to handle growing freight volumes, inefficient procedures mean that waiting and transit times are long, which
reduces the facilities' competitiveness against neighbouring ports in Thailand, Malaysia and Singapore.
Urban Population Growth to Strain Transport Networks

Vietnam - Urban & Rural Population (2022-2032)
f = BMI forecast. Source: National sources, BMI
Ports And Waterways
The Vietnamese government's ambitions to boost its maritime infrastructure to accommodate larger vessels will drive dredging
opportunities in the country. As part of increasing its port capacity from around 500mn tonnes currently to between 1,100mn and
1,400mn tonnes by 2030, the Vietnamese government has identified a series of priority shipping lanes to be upgraded. These
include, amongst others, shipping lanes serving key gateway ports such as the Hanang Ports cluster in the north of the country and
the Vung Tau-Cai Mep Port cluster in the southeast. As part of the Masterplan for the Development of Vietnam's Seaport System,
the government aims to increase throughput at northern ports to 305-367mn tonnes per year. This is up from the estimated
throughput of 93mn tonnes in 2021. Throughput at southeastern ports, which include the Vung Tau - Cai Mep Port cluster as well
as the Ho Chi Minh Port cluster, ought to increase from an estimated 217mn tonnes in 2021 to 461-540mn tonnes in 2030.
Markets across developing Asia will continue to compete for foreign direct investment in the manufacturing sector, as companies
attempt to reduce their reliance on Mainland China by diversifying their supply chains and moving manufacturing capacity into
other emerging markets. Transport infrastructure improvements will be key to governments' attempts to attract such investment,
including the ability to accommodate large container ships. In terms of the maximum vessel size (ie, the size of the largest vessel
received at its ports), Vietnam ranks in third place among those emerging Asian economies we expect to vie over manufacturing
investment, trailing behind Malaysia and Thailand. Vietnam outperforms India and Indonesia.
Aggressive Road Expansion Under Way
Vietnam’s road network will continue to expand over our forecast period. We expect the country’s road and bridges sub-sector to
grow at an annual average rate of 6.8% from 2023 to 2032, driven by a large pipeline of road projects. According to our Key Projects
Data, there are a total of 150 road projects currently in the planning or construction phases, which represents 60.0% of all pipeline
projects. We are positive that most of these projects will be implemented progressively over the next few years, given a projected
surge in demand for road infrastructure supported by sustained, robust economic growth.
Driven by increased business activity within the country, the amount of freight transported via road has been increasing over the
years, reaching an estimated 1.4bn tonnes in 2020. Similar observations are made with regard to the number of passenger traffic on
roads. We expect these trends to continue, which supports the need for continued investment in Vietnam’s road infrastructure.
Although there are plans to expand the country’s mainline rail network to cater to increased inter-city traffic, we note that rail
projects are often more costly and complex to implement, and have longer timelines. For example, the proposed Hanoi-Ho Chi Minh
City High Speed Railway Project, if implemented, has a targeted completion date of 2040-2045. This points to a greater demand in
road transportation in the short term, which lends support to our view that Vietnam's road network will continue to expand over the
next decade.
The expansion of the road sub-sector will be primarily fueled by the construction of motorways. The government intends to expand
the current network by more than five times to 7,000 km by 2030, an increase from the target set in 2016. (6,400km). The plan will
include the construction of new expressways connecting the northern and southern regions, several ring routes that will circle
existing urban cores to improve suburban connectivity, and the expansion of existing expressways by extending routes and
increasing the number of lanes. Given the high number of unpaved roads, we anticipate a wave of road modernisation over the next
decade, as currently unpaved roads are upgraded to asphalt or concrete roads. However, we note that some expressway projects
are likely to face land acquisition issues, which may delay project timelines and result in cost inflation. As most expressway projects
are likely procured via PPP, the pace of expansion of Vietnam’s expressway network will depend on the level of private interest,
which will pick up if the PPP framework, legal and financial institutions are strengthened.
Vietnam's Expressway U-Turn A Test For New PPP Law
Vietnam’s Ministry of Transport has released bidding documents for five sub-projects relating to the North-South Expressway. These
projects have been released under the PPP model, representing yet another U-turn in terms of structuring. Interested bidders will
have to raise an estimated VND22.4trn (USD961mn) of capital, which is about a quarter of the total project value of VND100.8trn,
within six months if their bids are accepted.
The five sub-projects are:
• National Highway 45-Nghi Son (45km)

• Nghi Son-Dien Chau (50km)
• Dien Chau-Bai Vot (50km)
• Nha Trang-Cam Lam (29km)
• Cam Lam-Vin Hao (91km)
The Vietnamese government has again changed their stance towards the project, and now opts for the PPP model. This follows an
earlier decision to convert these PPP projects to state projects due to various reasons, including difficulties in attracting quality bids.
We believe that the project’s high price tag is one of the driving factors behind the government’s decision to pursue the PPP model.
The U-turn in decision, in our opinion, highlights the government’s increasing pressure to deliver critical infrastructure required to
ensure sustainable economic development over the medium-to-long term, while working to reduce the financial stress on its own
balance sheets.
This decision comes after the passing of the new PPP Law, which is a potential game changer. The law addresses various
shortcomings of the previous PPP legal framework, most pertinently relating to the allocation of revenue risk. Lingering concern
over high risks associated with PPPs could be alleviated, as revenue risk is now partially shifted to the government. Although we
expect these projects to attract higher quality bids than those received prior to the enactment of the new PPP law, we also foresee
major hurdles for investors in other aspects of the project, such as land acquisition, securing of commercial loans and reducing
foreign currency risks. Also, demand risks pose a challenge for the structuring of the project’s revenue model, especially in the short
term, as these segments are located a distance away from the main demand centres of Ho Chi Minh City and Hanoi.
Metro Projects Support Railways Growth Outlook
Vietnam's railway sub-sector is expected to expand by an annual average of 6.0% in real terms between 2023 and 2032, primarily
driven by ongoing construction of urban transit projects in Hanoi and Ho Chi Minh City. Rapid urbanisation and economic
development have strained existing transport infrastructure in the two cities, prompting the local government to initiate plans to
construct a network of metro and monorail lines to alleviate traffic congestion. These plans are not without obstacles, as authorities
face issues with land clearance and construction delays that lead to cost overruns. However, these projects highlight a strong and
diverse involvement of international financiers and contractors in the railway's sector. For instance, the four lines across Hanoi and
Ho Chi Minh City are being built by four consortia from South Korea, China, Japan and Europe.
The Hanoi Metro project is financed by the World Bank, the Asian Development Bank (ADB) and the European Investment Bank
(EIB). It is being constructed by Daelim Industrial Company and Systra, and became operational in November 2021 (behind the
original target date of 2019). This marks the market's first metro project. Ho Chi Minh City’s two metro lines, namely the USD2.5bn
Line 1 and the USD2bn Line 2, have been hit by delays. These projects involve foreign construction companies, such as Japan-
based Sumitomo and Hitachi and France-based Vinci, as well as financiers such as the ADB, the EIB and KfW. The city has another
five metro lines currently under planning, and construction is likely to start in phases after the first two lines have been completed.
Ambitious Vietnamese High-Speed Rail To Face Several Hurdles
By far the largest project in the railway pipeline is the Hanoi–Ho Chi Minh City High Speed Rail Project. According to initial estimates,
the 1,560km route is valued at USD58.7bn, which is more than three times the next costliest infrastructure project, the USD16.0bn
Long Thanh International Airport Project in Dong Nai province, next to Ho Chi Minh City. The high-speed rail project is spilt into two
phases. Phase I comprises the 360km Ho Chi Minh to Nha Trang southern segment and the 280km Hanoi to Vinh northern
segment. These segments are targeted for completion by 2030. Phase II will link the northern and the southern segments, and is
planned for completion around 2045. Based on a feasibility study conducted by Japan International Cooperation Agency in 2013,
the largest cost components of the project are related to civil works, power systems, the purchase of rolling stocks and land.
The project is expected to greatly benefit the development of smaller cities along the route, such as Thanh Hoa and Vinh along the
northern segment and Phan Thiet and Nha Trang along the southern segment. Although these cities are currently served by
airports and roads, a rail link via the high-speed rail will reduce commute time to the larger cities of Hanoi and Ho Chi Minh City,
therefore enhancing accessibility and convenience. These factors may attract businesses to expand and people to relocate to
smaller cities, thus creating a greater demand for buildings construction and urban infrastructure in the long run, benefitting the
local economy as a whole.
Securing financing will be the greatest challenge to the project. Vietnam currently has a self-imposed public debt-to-GDP ceiling of
65.0%, and current levels of debt have come close to breaching this level. Unless the government revises the debt ceiling limit,
there will be little headroom for the government to issue debt in order to fund the project, even with private involvement through
the PPP model. In addition, a number of other infrastructure initiatives, such as the expansion of the Hanoi and Ho Chi Minh City
metro systems, are also reliant on public funding, which reduces the government's financial capacity. Given these factors, the
government is likely to face challenges in project financing, which may result in delays or, in a worst-case scenario, the cancellation
of the project. We expect the project to experience cost over-runs due to an increase in the price of construction materials and land,
as well as delays associated with adverse weather conditions and inefficiencies during the project execution phase. This will result in
greater financing difficulties for the government. Other potential hurdles to the project include the ability to attract private sector
interest and a weakening business case.
Besides the high-speed rail proposal, we note that there is significant development potential in Vietnam’s regional and long-
distance conventional railways; however, concrete and financed proposals have yet to emerge. Vietnam's current rail network is
centred on a 1,726km single-track mainline running from Hanoi to Ho Chi Minh City that dates from colonial eras and has low
operating speeds and capacities.
There is also scope for the development of international rail connections. The Ministry of Transportation and the Korea International
Cooperation Agency are currently studying the feasibility of a 500km railway link to Laos as the current railway is incompatible with
railways in neighbouring China. The Government of Cambodia has started the feasibility study for a Cambodia-Vietnam railway link.
The line will run from Phnom Penh to Bavet town, which is the Cambodian-Vietnamese international border checkpoint. The
Government of Vietnam will build the railway from Ho Chi Minh City to Bavet. The Cambodian government, through China Railway
International Group, is also studying the possibility of a high-speed road connecting Phnom Penh to Bavet city.
Airports Boosted By Megaprojects
Despite being the smallest constituent of Vietnam’s transport infrastructure industry, the Vietnamese airport infrastructure sub-
sector is set to experience steady growth on the back of a growing project pipeline to tap into the rapidly expanding aviation
industry. We expect it to grow by an annual average rate of 3.9% in real terms between 2023 and 2032. The government has
committed to projects relating to the expansion and upgrade of airport infrastructure. The two largest airports in Vietnam - Tan Son
Nhat International Airport in Ho Chi Minh City and Noi Bai International Airport in Hanoi - will undergo expansion to tackle existing
capacity issues. Smaller projects are also in the pipeline, including the construction of the new Lao Cai International Airport and the
expansion of Phu Cat Airport, Phu Bai Airport and Chu Lai International Airport.
The expansion of Tan Son Nhat International Airport includes a third terminal. Airports Corporation of Vietnam (ACV) is to invest
VND11.0trn (USD472mn) in the construction of the third terminal after the state-run firm was approved to be investor of the
project. The terminal will have a total floor area of about 100,000sq m and will be able to accommodate 20mn passengers annually.
The scope of work will cover the expansion of parking lots and the construction of supporting structures, including technical
buildings, wastewater treatment plants and water stations. Construction was initially expected to start in October 2021, with
completion planned in mid-2023. The project received government approval in January 2022.
ACV also plans to invest VND4.8trn (USD206.2mn) in reconstructing Điện Biên Airport. VND1.5trn (USD64.7mn) will be used for site
clearance, VND1.4trn (USD60.1mn) for developing runways and the terminal, and VND1.7trn (USD73.0mn) for civil airport facilities.
ACV has planned two modes of investment. Under the first option, the company will self-invest in civil and flight areas, while Việt
Nam Air Traffic Management (VATM) will invest in flight control facilities and the local government in site clearance, expecting the
project to finish in 36 months. As per the second option, the project will be sponsored by VATM, the government and the provincial
budget. ACV will operate the project, which is slated to be completed in 40 months. The annual capacity of the airport will be
increased to 2mn passengers and 10,000 tonnes of cargo by 2030.
In the long term, the construction of the new Long Thanh International Airport in Ho Chi Minh City, valued at USD16.0bn, is
projected to increase capacity by 100mn. Ground was broken on the project in January 2021. In March 2021, Vietnam
Airlines proposed to invest around VND10trn (USD433mn) in developing infrastructure at the under-construction airport. The
proposal, submitted to the Ministry of Transport, Ministry of Planning and Investment and the Commission for the Management of
State Capital at Enterprises, covers investment in a cargo terminal, an aviation logistics centre, airline lounges and duty-free retail.
The airline plans to raise some 70% of the investment through loans and the remainder through equity. The three-phase Long
Thanh International Airport is expected to be completed in 2040.
Due to Vietnam’s poor track record of delivering projects on time, we do not expect that these planned airports to be complete by
their current deadlines. In the meantime, many smaller Vietnamese airports are operating below capacity, struggling financially and
facing significant competition from nearby international hubs in Singapore; Kuala Lumpur; Bangkok; and Hong Kong, China. Most
airports handle mostly regional flights that do not generate as much revenue as intercontinental flights. Although the government
aims to eventually privatise the Airport Corporation of Vietnam and introduce greater private sector participation in the sub-sector,
the unfavourable finances of Vietnamese airports could deter risk-averse companies.
Vietnam - Major TTrranspor

ansportt Infr
Infrastructur
astructuree Pr
Projects
ojects
Project Sub- Value Size Project Companies Time Status
Name Sector (USDmn) Risk Frame
Metric End
Ha Noi Rail 58,000 1,545km 5.3 Transport Engineering Design Incorporated (TEDI) 2045 At planning
(City)-Ho Chi [Consultant/Project Management] {Vietnam}, stage
Minh (City) Government of Vietnam [Sponsor] {Vietnam}, Vietnam
High-Speed Railway Corporation (VRC) [Sponsor] {Vietnam}, Ernst
Railway and Young [Consultant/Project Management] {UK},
Pr
Project
oject Yachiyo Industry Co Ltd [Consultant/Project
Management] {Japan}, Fukken Co Ltd [Consultant/
Project Management] {Myanmar}, PADECO [Consultant/
Project Management] {Japan}, Transport Investment and
Construction Consultant Joint Stock Company (TRICC)
[Consultant/Project Management] {Vietnam}, Japan
International Cooperation Agency (JICA) [Financier]
{Japan}, Vietnam Railway Corporation (VRC) [Operator]
{Vietnam}
Ha Noi Rail 33,340 364km 5.3 Vietnam Railway Corporation [Sponsor] {Vietnam}, 2045 At planning
(City)-Ho Chi Japan International Cooperation Agency [Consultant/ stage
Minh (City) Project Management] {Japan}, Transport Engineering
High-Speed Design Incorporated [Consultant/Project Management]
Railway
Railway,, Vinh {Vietnam}, Government of Vietnam [Sponsor] {Vietnam},
City
City-Nha
-Nha Transport Investment and Construction Consultant
Trang Joint Stock Company [Consultant/Project Management]
(Khanh Hoa) {Vietnam}, Ernst and Young [Consultant/Project
Section Management] {UK}, Yachiyo Industry Co [Consultant/
Project Management] {Japan}, Fukken Co [Consultant/
Project Management] {Myanmar}, PADECO [Consultant/
Project Management] {Japan}
Long Thanh Airports 14,852 100mn 8.8 Vietnam Airlines Cargo [Sponsor], Transport 2040 Under
International passengers Engineering Design Incorporated [Feasibility] {Vietnam}, construction
Airpor
Airportt per year Airports Corporation of Vietnam [Sponsor] {Vietnam},
Pr
Project,
oject, Japan Airport Consultants [Feasibility] {Japan}, Nippon
Dong Nai Koei Group [Feasibility] {Japan}, ADPI [Feasibility]
{France}, Vietnam Ministry of Transport [Sponsor]
{Vietnam}, Oriental Consultants Global Co [Feasibility]
{Japan}, Airport Design And Construction Consultancy
[Feasibility] {Vietnam}
Ha Noi (City) Rail 13,830 896km 5.3 Government of Vietnam [Sponsor] {Vietnam}, Japan 2032 At planning
- Ho Chi International Cooperation Agency (JICA) [Financier] stage
{Japan}, Vietnam Railway Corporation (VRC) [Sponsor]
{Vietnam}, PADECO [Consultant/Project Management]
Project Sub- Value Size Project Companies Time Status

Name Sector (USDmn) Risk Frame
Metric End
Minh (City) {Japan}, Fukken Co Ltd [Consultant/Project

High-Speed Management] {Myanmar}, Yachiyo Industry Co Ltd
Railway
Railway,, Ho [Consultant/Project Management] {Japan}, Ernst and
Chi Minh Young [Consultant/Project Management] {UK},
(City) - Nha Transport Investment and Construction Consultant
Trang Joint Stock Company (TRICC) [Consultant/Project
(Khanh Hoa) Management] {Vietnam}, Transport Engineering Design
Section Incorporated (TEDI) [Consultant/Project Management]
{Vietnam}
Ha Noi (City) Rail 10,830 285km 5.3 Transport Engineering Design Incorporated (TEDI) 2032 At planning
- Ho Chi [Consultant/Project Management] {Vietnam}, Vietnam stage
Minh (City) Railway Corporation (VRC) [Sponsor] {Vietnam},
High-Speed Transport Investment and Construction Consultant
Railway
Railway,, Ha Joint Stock Company (TRICC) [Consultant/Project
Noi (City)- Management] {Vietnam}, Ernst and Young [Consultant/
Vinh (Nghe Project Management] {UK}, Yachiyo Industry Co Ltd
An) Section [Consultant/Project Management] {Japan}, Fukken Co
Ltd [Consultant/Project Management] {Myanmar},
PADECO [Consultant/Project Management] {Japan},
Japan International Cooperation Agency (JICA)
[Financier] {Japan}, Government of Vietnam [Sponsor]
{Vietnam}, Government of Vietnam [Sponsor] {Vietnam}
Note: Top five projects by value. Project Risk Metric scores out of 10; higher score = lower risk. Source: BMI Infrastructure Key Projects Data
Energy & Utilities Infrastructure

Key View: We forecast growth in Vietnam's energy and utilities construction to average 5.9% annually between 2023 and 2032. We
expect all power types across Vietnam’s power market to increase in installed capacity over the our forecast period. Non-
hydropower renewables growth will be the highest in terms of capacity, followed by fossil fuel capacity. Renewable power project
developers will experience the most opportunities for solar and wind.
Latest Developments
• In October 2023, a consortium of McDermott and Petrovietnam Technical Services secured a limited letter of award worth
USD1.0bn from Phu Quoc Petroleum for work on the Block B gas development project offshore Vietnam. The scope of work
includes the engineering, procurement, construction, installation and hook-up of the project, as well as commissioning services.
The full project contract is slated to be executed in early 2024.
• In October 2023, Electricité du Vietnam (EVN) started construction on the 500kV Monsoon-Thanh My interconnection project
between the Quang Nam province of Vietnam and the 600MW Monsoon wind power project in Laos. The VND1.1trn
(USD45.0mn) interconnection line will add 2.5GW of electricity to Vietnam’s power grid (600MW in a first phase), is scheduled to
be completed in 2024. The power generated from the Monsoon wind project will be sold under a 25-year power purchase
agreement. The wind project is scheduled to be completed in 2025.
• In June 2023, the Department of Industry and Trade of Ho Chi Minh City unveiled plans for the development of a new 6GW
offshore wind power project in Can Gio, Vietnam. A joint venture between Asia Petroleum Energy and Japan-based Tokyo
Gas and Shizen Energy Group will develop the VND313.0trn (USD13.3bn) project. The project will be developed in four phases,
including a 2GW first phase (2031-2035), 1GW second phase in 2035 for hydrogen production, 2GW third phase (2036-2040) for
power generation and 1GW fourth phase for hydrogen production.
• In May 2023, the Government of Vietnam approved its Eighth Power Development Plan, which includes the approval of the grid
interconnection plan for the 3.2GW Bac Lieu liquefied natural gas (LNG)-to-power project. Delta Offshore Energy (DOE) is
responsible for the development of the project. The 130km 500kV Bac Lieu-Thot Not Transmission Line will be owned by the
national government and Electricité du Vietnam. DOE expects to sign a power purchase agreement in Q423, and construction is
due to start in 2024.
• In May 2023, Binh Son Refining and Petrochemical, a subsidiary of PetroVietnam, unveiled plans for the expansion of its Dung
Quat oil refinery in Vietnam. The project, estimated to cost USD1.25bn, will increase the refinery's capacity from 6.5mn tonnes
per annum (mtpa) to 7.6mtpa. The company will secure USD754.0mn in loans for the project, while the remaining funds will be
secured as equity from the federal government. The maintenance of the refinery is expected to start in 2024, while the
expansion project is scheduled for completion by Q128.
Ener
Energy
gy And U
Utilities
tilities Infr
Infrastructur
astructuree Industr
Ener
Energy
gy and utilities infr
infrastructur
astructuree industr
industryy vvalue
alue
4.9 5.5 5.3 5.7 5.7 6.2 6.1 5.9 5.8 5.7 5.6
real gr
groowth, % yy-o-y
-o-y
Power plants and tr transmission
ansmission grids
4.7 5.4 5.1 5.6 5.6 6.1 6.0 5.9 5.7 5.6 5.4
infr
infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth, % yy-o-y
-o-y
Oil and gas pipelines infr
infrastructur
astructuree industr
industryy vvalue
alue
6.7 6.2 6.1 6.0 5.9 5.9 5.9 5.9 5.9 5.9 5.9
real gr
groowth, % yy-o-y
-o-y
Water infr
infrastructur
astructuree industr
industryy vvalue
alue rreal
eal gr
groowth, %
7.0 6.9 6.8 6.8 6.8 6.8 6.8 6.7 6.7 6.7 6.7
y-o-y
Structural Trends
2023-2032: Focus On Expanding Domestic Capacity
We forecast Vietnam’s energy and utilities sector to grow by an average of 5.9% annually between 2023 and 2032. Power
infrastructure will remain the key driver of energy and utilities construction, as a rise in power demand from its expanding industry
and manufacturing sectors will stimulate the rapid development of power capacity. Vietnam is facing an increasing threat of power
shortages as power demand is likely to outpace capacity growth in the near term. We believe that the government will look to
improve the business and operating environment for the sub-sector to attract more private investors and may look to fasttrack
certain power projects. Based on the latest draft of the upcoming energy plan (Power Development Plan 8), Vietnam requires an
additional USD128bn worth of investment in power generation and grid infrastructures by 2030 to meet the increasing demand
and target output.
At present, infrastructure projects in Vietnam are largely driven by government funding, or from financial assistance in bilateral and
multilateral agencies. However, limited government budget and fiscal capacity to meet project financing requirements have posed
some downside risks to the existing project pipeline. Hence, we believe that the government will remain committed to improving
the business environment to attract private investors, particularly foreign ones, to generate more private capital for the power and
renewables market. This will in turn reduce the financial burden of projects on its balance sheet and make them more competitive,
which will be key to support the growth of the sector. The government already has a relatively well-developed public-private
partnership (PPP) framework to attract private capital, particularly for power infrastructure, but there is still room for more
transparency and reliability. The government is also implementing ongoing reforms and making efforts to liberalise regulations in
the power sector, particularly for renewables. Some such efforts include the privatisation of state-owned enterprises and the
introduction of the competitive wholesale generation market.
Most of the new electricity capacity coming online in the next few years will be from coal- and gas-fired power plants; however, we
believe that there is long-term growth potential for renewables, given Vietnam's favourable conditions for solar and wind power, and
as the government reconsiders planned coal plants, after ratifying the Paris Agreement on climate change. Vietnam opened its
power generation sector to independent power producers (IPPs) in 2012 after launching its competitive generation market (CGM)
scheme, the first phase of its power market development road map. Under the CGM, IPPs forward their asking prices to the Electric
Power Trading Company (EPTC). The EPTC then purchases the electricity via a competitive cost-based pool and sells it to
distribution companies and major consumers at regulated prices. A number of IPPs have gained a foothold in the market since
2012 and now generate around 80% of the national power supply. Greater private sector participation is a promising and necessary
development, as Vietnam does not have the fiscal strength to finance its ambitious power plans.
Thermal Facilities Dominating Power Infrastructure Growth

Vietnam - Total Installed Power Capacity, MW
e/f = BMI estimate/forecast. Source: EIA, National sources, BMI
Thermal Power Makes Up Majority
The latest draft of the PDP8 shows a shift away from coal-fired power plants and is mooting the elimination of nearly 15GW of
planned coal projects and for coal to account only 37.0% of Vietnam’s electricity by 2025, due to slow progress and environmental
oppositions to some coal projects. A decision is yet to be made on this and we believe that the government is likely to retain an
ongoing commitment to coal at present, given that there is a substantial amount of capacity under construction and it is unclear
how the government would halt the development of these projects without incurring significant compensation costs. The sheer
size of the coal project pipeline means that growth in the coming few years is still largely assured. According to our Key Projects
Data (KPD), there is around 13.9GW of coal power plants that are already under construction and another 29.5GW in the pre-
construction stages.
The lack of support for coal projects by international and national development banks means that Vietnam will have to rely on less-
stringent sources of funding such as the Mainland China-led Asian Infrastructure Investment Bank or private investors. The Mong
Duong 2 plant in the Quang Nih province was one of Vietnam's first foreign-backed build-operate-transfer (BOT) coal-fired plant,
while four other projects are also being implemented by foreign IPPs under BOT contracts. The government is also relying on
foreign firms to provide technologically advanced equipment for coal plants to improve efficiency. For example, in January 2016,
South Korea-based Doosan Heavy Industries & Construction secured a USD560mn contract from EVN to build the 600MW Vinh Tan
IV coal-fired power plant.
Natural Gas Generation Will Be Reliant On LNG Imports
We have seen a rapid expansion of the LNG-to-power project pipeline over the last one to two years, as the government has shifted
its strategy towards the use of LNG as a source for power generation and looked to create more favourable conditions for foreign
investors to develop such projects. This supports our long-held view that Vietnam will increasingly rely on LNG in the power sector,
given depleting domestic gas resources and rising investor interest in LNG projects. This is also supported by the availability of
funding and rising foreign capital inflows in the domestic power, natural gas and LNG sectors, as well as a downturn in global gas
prices, reinforcing its attractiveness as a supply source due to low production costs.
We stress that this has to go hand-in-hand with adequate gas infrastructure, particularly in regasification terminals and pipelines.
Vietnam is struggling to meet natural gas demand, especially in its southern provinces where most major industrial zones are
located. Efforts to increase domestic gas output have faced continued headwinds amid a mix of low oil prices, exploration
slowdown and state-owned PetroVietnam’s financial struggles. In this context, LNG is the ‘safe’ alternative. The anticipated
commissioning of PV Gas’s 1.4bcm Thi Vai LNG terminal in the Ba Ria-Vung Tau province in 2022 will allow Vietnam to begin
importing LNG for the first time. LNG imported via Thi Vai will supply two LNG-fired power plants, Nhan Trach 3 and 4 (1,500MW), in
the Dong Nai province, which are scheduled to be completed by 2023 and 2024 respectively.
France-based EDF, along with Japan-based Sojitz Corporation, Kyushu Electric Power and local firm Pacific Corporation,
is also developing a larger 8.2bcm Son My LNG terminal in phases. Phase I (4.1bcm) will include a 2,000MW LNG-to-power plant in
Binh Thuan and is expected to be commissioned by 2023-2024. Phase II (4.1bcm) consists of three LNG-fired power plants, with a
combined capacity of 2,250MW, which could come on stream in 2027-2028. This will see 72.0% of the new gas-fired generation
capacity built across Vietnam underpinned by LNG imports. The remainder will be supplied by fresh production from two giant
offshore gas developments, Block B (Malay-Tho basin) and the Ca Voi Xanh (Song Hong basin) fields.
In particular, the US has been making strong inroads into Vietnam’s LNG and power sectors in recent quarters, with an aim to boost
bilateral trade of the fuel. This is especially due to the Vietnamese government's plans to import more large-scale LNG from the US.
Beyond the US, we also see strong involvement of Japan-based, South Korea-based and Thailand-based companies, which have all
expressed interest in developing the nascent LNG power industry in Vietnam.
Coal Dominates Power And Grids Project Pipeline

Vietnam - Power & Grid Infrastructure Project Pipeline Value By Type
Source: BMI Infrastructure KPD
Hydropower: Indispensable But Problematic
Hydropower will continue to play an important role in Vietnam's energy mix, but future growth will be hampered by a lack of
additional sites and growing environmental concerns among provincial governments. This was reflected in the province of Thua
Thien Hue's nine planned hydropower projects, which were cancelled by the provincial People's Committee in late 2012. We
anticipate that hydropower generation will account for 19.4% of the domestic energy mix by 2032. Unlike other power sectors, the
hydropower sector has seen lower private participation, as only plants with capacities greater than 30MW are eligible for the
competitive generation market, which was implemented in July 2013. Many of the planned projects are smaller scale, and producers
would only be able to sell electricity directly to state utility EVN at a much lower and unattractive rate.
Environmental concerns have led to the resistance of hydropower project development in certain provinces. In October 2018, local
authorities of the flood-susceptible Nghe An province in north-central Vietnam have decided not to grant licences to new
hydropower projects, citing potential damage to the natural habitat as a primary reason. During the monsoon season, many locals
suffered huge losses from flooding caused by the release of water from the dams. Many other provinces have also seen a serious
loss in forest cover due to the presence of hydropower plants. The collapse of the Xe-Pian Xe-Namnoy Dam in July 2018 in Laos also
raised concerns about the safety of hydropower plants.
Slow Growth For Hydropower

Vietnam - Hydroelectric Power Generation & Growth (2022-2032)
Renewables In Focus
The Vietnamese government plans to increase the amount of electricity generated from renewable sources by more than threefold,
with a particular focus on expanding capacity in the wind and solar sectors. Favourable feed-in tariffs have been introduced to
encourage investments in the traditionally cost-prohibitive renewables sector. With an estimated 8.6% of landmass suitable for wind
power generation and long coastlines, Vietnam’s advantageous geography presents it with a significant opportunity in the
development of both onshore and offshore wind farms, with a potential cumulative capacity of more than 24GW. The country is also
a source of rare metallic minerals that are essential raw materials for the production of wind turbines and photovoltaic cells.
The increasingly supportive regulatory environment for the sector offers substantial opportunities for investors, which has notably
strengthened the pipeline. In an attempt to encourage foreign investments and growth in the sector, the government offers some
preferential policies, attractive feed-in-tariffs and other financial incentives, such as preferential tax and duty levies. The government
is also look to transition toward competitive auctions from 2022, which will be crucial for more sustainable longer term
growth. We stress that the government remains highly committed to boosting the country’s renewables growth, particularly as it is
seen as a potential strategy to deal with looming power shortages, and could provide other more supportive mechanisms to retain
investor interests. We note that the government is expected to announce a new PDP8, and we have long highlighted that renewable
energy will likely see a greater focus. Based on the country’s latest draft power development plan, the government targets to install
2GW of wind capacity and 4GW of solar capacity by 2025, and 6GW and 12GW respectively by 2030, but these targets are expected
to see substantial increases. The latest draft accounts for 6GW by 2025 and 10GW by 2030 for wind, and 12.5GW by 2025 and
20GW by 2030 for solar. Preliminary media reports from the region also highlighted a possible 12GW wind target by 2025. We
believe the finalised plan will include more specific details on mechanisms to support growth of the sector and boost investor
interests.
However, the specifics still remain in question as at time of writing. Most recently, the deputy prime minister said that the solar
capacity targets are 'too high' and should be lowered in favour of offshore wind power. Previously, the ministry also said that the
government as looking to modify the PDP8 following Vietnam’s net-zero pledge at the COP26 Summit, and will reduce the share of
both LNG and coal in its future energy mix. We note that the plan has already been revised four times since the first draft was
released in February 2021, with notable differences across each revision in terms of targets, and the stance around thermal sources.
The Ministry of Industry and Trade asked for the implementation of the plan to be deferred to Q222 and approved by end of June
2022.
There has been a significant uptick in solar and wind project approvals by the government since 2017, which has boosted the
project pipeline significantly. At present, our KPD shows that non-hydro renewable power plants make up 81 out of all 144 power
infrastructure projects in the pre-construction and construction phase. Most notably, Enterprise Energy has plans to build the Ke Ga
offshore windfarm in Binh Thuan, Vietnam with a 3.4GW capacity, which will be the largest offshore wind farm in the region if it
comes to fruition. The project has registered some progress, given that the prime minister has requested for a formal proposal for
the project to be included into the country’s power development plan, and this is set to boost the wind power project pipeline
significantly.
Lagging Behind Neighbours

Selected Asia Markets - Non-Hydropower Renewables, % share of total electricity generation (2022-2032)
More Investment In Transmission Network
Investment in grid infrastructure will rise with the growing demand for electricity in the country. The demand for electricity is mainly
driven by rapid urbanisation and economic growth in the country’s two largest population centres, Hanoi in the north and Ho Chi
Minh City in the south. The current network transmitting electricity from the north and central areas to the south is overloaded and
under strain, causing instances of power outages and larger power losses. Under the draft PDP8, the Ministry of Industry and Trade
estimated the need for USD32.9bn to develop its power grids over 2021-2030. The plan proposes to continue the expansion of
500kV transmission systems to transmit power from source centres in the central and southern regions to larger load centres in Ho
Chi Minh City and the Red River Delta. The ministry is also mooting the application of a smart grid and 4.0 technology into the
transmission network.
Water: Rapid Urbanisation And Climate Change Driving Needs
Vietnam’s water infrastructure needs are diverse, ranging from water supply infrastructure to wastewater management systems and
facilities, to anti-flood infrastructure. We forecast real growth in Vietnam’s water infrastructure to average 6.8% annually in real
terms across our forecast period through to 2032, making it an outperformer within the overall energy and utilities sector.
Existing water supply and treatment facilities are inadequate and face increasing strain from the growing populations of many cities,
alongside increasing water demand from both the industrial and agricultural sectors. In addition, severe and increasingly
unpredictable weather patterns due to climate change will place a greater level of stress on Vietnam’s existing water resources,
especially during the dry season when water flows are lower. In 2019, water levels in the Mekong River fell to their lowest in more
than 100 years, disrupting water supplies to farms and factories. According to the International Water Resources Associations,
Vietnam faces a shortage of water, with water output of less than 4,000cu m per head per annum. As the economy continues to
expand and industrialise, water demand will rise and form a larger proportion of overall water withdrawal over our forecast period.
Water security and access to clean water has become an increasingly important issue in recent years. This points to a need to invest
in more robust water supply infrastructure and to diversify the country’s water sources.
Based on our KPD, there are 21 major water projects that are currently at the planning and construction phases, with a total value of
around USD2.9bn. We note that this figure is low in comparison with the larger power and transmission sub-sector. However, we
expect more projects to be announced over the coming years, as the regulatory and operating environment for water infrastructure
projects improves. The prime minister issued a directive in August 2020 to call for improving legal frameworks, new investment
models, and new operation and management technologies to ensure sufficient clean water. In particular, the Ministry of
Construction was tasked with developing a bill on clean water management in 2021. It was also to develop a project for state water
management with more private sector involvement. In addition, the new law on PPPs, which came into effect on January 1 2021,
includes water infrastructure, and will play a crucial role in improving the regulatory framework for investments. We believe that
these efforts will set the stage for more private investment in water infrastructure over the coming years. Given the country’s large
investment needs, we expect foreign companies to form a growing proportion of the water sector competitive landscape as well.
Vietnam - Major Ener

Energy
gy And U
Utilities
tilities Infr
Infrastructur
astructuree Pr
Projects
ojects
Project
Sub- Value
Project Name Risk Size Companies Status
Sector (USDmn)
Metric
Ør
Ørsted
sted Wind - na 13,000 3,900MW Ørsted A/S [Sponsor] {Denmark}, Tap doan T&T Group At planning stage
Offshore [Sponsor] {Vietnam}
Thang LLong
ong Wind - 6.2 11,900 3,400MW Societe Generale [Consultant/Project Management] At planning stage
Off
Offshor
shoree Wind Offshore {France}, MHI Vestas Offshore Wind [Equipment]
Pr
Project,
oject, Binh {Denmark}, Enterprize Energy [Sponsor] {Singapore},
Thuan Vietsovpetro [Construction] {Vietnam}, PVC-MS
[Construction] {Vietnam}, Cong ty co phan dịnh vị
Thien Nam [Consultant/Project Management]
{Vietnam}, Hai Duong Co [Consultant/Project
Management] {Vietnam}
La Gan Off
Offshor
shoree Wind - 6.2 10,000 3,500MW NIRAS [Consultant/Project Management] {Denmark}, At planning stage
Wind Pr
Project,
oject, Binh Offshore Copenhagen Infrastructure Partners [Sponsor]
Thuan {Denmark}, Binh Thuan Province Government
[Sponsor] {Vietnam}, Asia Petroleum Energy
Corporation [Sponsor] {Vietnam}, Novasia Energy
[Sponsor] {Vietnam}, Trung tâm Quy hoạch và Điều tra
tài nguyên - môi trường biển khu vực phía Bắc
[Consultant/Project Management] {Vietnam},
Geological Survey of Denmark and Greenland
[Consultant/Project Management] {Denmark}, AXYS
Technologies [Consultant/Project Management]
{Canada}
Block B - O Mon Oil & 8.4 10,000 6.4bn cu PTT Exploration and Production Public Company At planning stage
Gas Pipeline Gas m gas Limited - PTTEP [Sponsor] {Thailand}, Mitsui & Co
Pr
Project
oject Pipeline per year [Sponsor] {Japan}, PetroVietnam [Sponsor] {Vietnam},
Vietnam Oil and Gas Group [Sponsor] {Vietnam}
Kien LLuong
uong Coal- Coal 6.1 6,700 4,400MW Shearman & Sterling [Consultant/Project At planning stage
Fir
Fired
ed P
Poower Management] {US}, China Huadian Corporation
Comple
Complex, x, Kien [Construction] {Mainland China}, Standard Chartered
Giang [Financier] {UK}, Tan Tao Energy Corporation [Sponsor]
{Vietnam}
Note: Top five projects by value. na = not available. Project Risk Metric scores out of 10; higher score = lower risk. Source: BMI Infrastructure KPD
Residential/Non-Residential Building
Key View: We forecast Vietnam's residential and non-residential building sector to grow by 4.0% in 2023, as squeezed access to
financing will limit construction growth in Vietnam's residential property sector, dragging on overall construction growth in the
country. Reportedly, developers had suspended USD34.0bn worth of projects by the beginning of June 2023. In the medium-to-
long term, we expect that the trend towards supply chain diversification will support industrial construction, as the country aims to
attract manufacturing capacity and to move away from Mainland China. We forecast the sector to grow by an annual average of
7.2% in real terms between 2024 and 2032.
Latest Developments
• In November 2023, Vietnam's Ministry of Planning and Investment submitted a report for a USD2.2bn tourist complex, including
a casino, in the Quang Ninh province. The project, which has been proposed by the People's Committee of the province, is set to
be developed on a 2.4sq km site in the Van Don Economic Zone. Work on the site is due to start before the end of 2023, with full
completion expected in 2032.
• In October 2023, Pandora earmarked Q124 to build a USD163mn jewellery crafting facility in Vietnam. The facility will come up in
the Vietnam Singapore Industrial Park of Binh Duong. The manufacturing facility is scheduled to be operational in 2026.
• In October 2023, construction work started on the Hậu Giang Agricultural and Food Processing Factory Complex in Sông Hậu
Western Industrial Park, Hậu Giang Province, Vietnam. The Westfood Hậu Giang factory, funded by the Westfood Hậu Giang Joint
Stock Company, will be built on an area of 70,000sq m, with a total investment of VND666bn (USD27.4mn). The facility will have
a production capacity of 30,000 tonnes per annum. Operations are expected to start in Q125.
• In September 2023, China-based Trina Solar unveiled plans to invest USD400mn to build a solar panel manufacturing facility in
Vietnam. The factory would cover 250,000sq m of industrial property. Production is due to start in 2025.
• In September 2023, South Korea-based SK Group secured a new investment registration certificate from the Hải Phòng
Economic Zone Authority to invest USD500mn in the ECOVANCE high-tech biodegradable materials plant in the city of Hải
Phòng, Vietnam. The facility will come up on a 32,089sq m area in the CN5.5G2 land lot, DEEP C Hải Phòng I Industrial Zone.
Construction on Phase I is due to start in the middle of December 2023, with completion expected nine months therefrom.
While the facility currently reaches around 35,000 tonnes of products per annum, after Phase II is completed, the capacity will be
increased to 70,000 tonnes per annum.
Residential/Non-R
esidential/Non-Residential
esidential Building Industr
Residential and non-r
non-residential
esidential building industr
industryy
7.1 4.0 7.2 8.0 7.8 7.2 7.0 7.0 6.9 6.9 6.8
value rreal
eal gr
groowth (%)
Residential Building Industr
Industryy V
Value
alue R
Real
eal Gr
Groowth
7.7 2.6 3.4 7.4 7.5 7.2 7.3 7.4 7.4 7.5 7.6
(%)
Non-r
Non-residential
esidential Building Industr
Industryy V
Value
alue R
Real
eal
6.6 5.2 10.2 8.4 8.1 7.1 6.8 6.7 6.5 6.4 6.3
Gr
Groowth (%)
Structural Trends
2023-2032: Positive Outlook Supported By Foreign And Private Investment
In the near term, squeezed access to financing will limit construction growth in Vietnam's residential property sector, dragging on
overall construction growth in the country. Reportedly, developers had suspended USD34bn worth of projects by the beginning of
June 2023. We thus forecast the residential and non-residential building sector to grow by 4.0%, which is below its historical average,
in 2023. In the medium-to-long term, we expect that the trend towards supply chain diversification will support industrial
construction, as the country aims to attract manufacturing capacity and move away from China. We forecast the sector to grow by
an annual average of 7.2% in real terms between 2024 and 2032.
There are a number of positive factors which will support growth, including rapid urbanisation and industrial development trends.
With more than 50% of Vietnam's population expected to be living in cities by 2050, there will be a sustained demand for new
residential construction over our forecast period. Foreign manufacturers, including those from China, are increasingly targeting
Vietnam as a destination for industrial investment, owing to lower labour costs, fast economic growth rates and the improving
logistics situation.
The government is gradually relaxing restrictions on investment. As a result, significant amounts of private and foreign capital are
being funnelled into residential and commercial real estate projects. A significant proportion of private investment in Vietnam has
and will continue to come from Japan and China, and we expect that rising investment flows will lead to further growth as Vietnam
becomes an even more attractive market, especially compared with higher-risk and slower-growing peers such as Cambodia and
Laos. Vietnam's young demographic profile and urbanising population are generating fundamental demand for residential and non-
residential buildings.
Need For Affordable Housing To Spearhead Residential Sector Growth
Strong economic growth has generally led to rising income levels, which has resulted in an increase in demand for higher-end
residential real estate, especially in dense urban areas such as Hanoi and Ho Chi Minh City. The influx of foreign developers, mostly
involved in developments catering to the high-end segment, has resulted in a relative shortage of affordable housing. This situation
is exacerbated by persistent rural-urban migration trends in the country. Vietnam’s urbanisation rate is estimated at 37.3% as of
2021, and this figure is expected to rise to 44.5% in 2030 and will reach 57.3% in 2050.
We forecast positive growth in the residential building segment of average annual growth of 7.4% between 2023 to 2032. Recent
key developments in the residential building sector include:
• Mitsubishi Corporation and Nomura Real Estate have agreed to acquire an 80.0% interest in the second phase of the Grand Park
housing development project in Ho Chi Minh. Phase II, which is estimated to cost JPY100bn (USD918mn), will cover 260,000sq
m. The phase, which was ready for handover in 2022, will deliver more than 10,000 residential units. The entire development
spans 2.71sq km and is being developed by Vinhomes. The project, including Phase III, which was launched in 2023, is scheduled
to be fully completed around 2026. When completed, Grand Park will have offices, residences, sports and commercial facilities,
among others.
• Daewoo Engineering and Construction (Daewoo E&C) has signed an investment development agreement with various South
Korea-based financial institutions to invest in a real estate project at the upcoming Star Lake City in Hanoi. The USD386mn
development comprises two 35-storey buildings, which will house a hotel, serviced residences, business offices and retail
facilities. Daewoo E&C, along with Korea Development Bank and KB Securities, will establish a special-purpose company to carry
out the project. Completion is scheduled for 2024.
Urbanisation A Primary Driver Of Real Estate Demand

Vietnam – Population & Urbanisation Rate (2020-2050)
e/f =BMI estimate/forecast. Source: National sources, BMI
Strong Investment In The Industrial Sector
Foreign direct investment (FDI) will play a key role for the expansion of Vietnam’s industrial building sector, as Vietnam emerges as a
global manufacturing hub. Based on a substantial project pipeline and rising levels of FDI, our forecasts for the non-residential
buildings segment show growth of 7.5% annually on average between 2023 and 2032.
The difficulties between the US and China with trade in 2019 led to a growing number of low-end electronics and textile
manufacturing companies to relocate their factories into Vietnam. The Covid-19 outbreak in 2020 and subsequent recovery, which
caused massive disruptions to the global supply chain, will most likely prompt further shifting of production lines away from China,
with Vietnam likely to benefit. Already, South Korea-based electronics giant Samsung has invested in a facility in Ho Chi Minh City,
with other multinational consumer electronics companies such as Denmark-based Sonion and Japan-based Sharp having
successfully established manufacturing bases in Vietnam. Other companies with plans to set up production lines in Vietnam
include Microsoft, Nintendo, Ricoh and Dell.
The oil and gas sector is expanding in Vietnam. ExxonMobil has secured approval from the Haiphong city authorities for the
construction of a USD5.0bn liquefied natural gas power and terminal project in the country. The project will be constructed in two
phases, with the first phase including the installation of three units of turbines with 750MW capacity each, and the construction of a
floating dock warehouse and a gas pipe. The remaining 2.25GW capacity will be installed in Phase II of the project, along with the
construction of the floating storage units. Phase I is likely to become operational over 2026-2027, and Phase II will be completed
over 2029-2030.
Reforms to the country’s investment-related laws over the past decade have had a positive effect on FDI inflows. However, we note
that Vietnam continues to have a difficult business operating environment, with limits on foreign ownership and investments
governed by multiple laws and decrees.
Heavy Investment In Manufacturing To Continue

Vietnam – Total Investment By Sub-Sector, VNDbn (2005-2019)
Source: General Statistics Office of Vietnam, BMI
Vietnam's concurrent investment in infrastructure will sharpen its competitive edge over other regional peers (eg, Bangladesh, India
and Cambodia), and will present tailwinds to industrial construction activity over our forecast period. A number of industrial parks
established across the country have been successful in attracting foreign investors, with a mixture of tax incentives, lower operating
costs and accessibility to nearby roads and port infrastructure. Vietnam’s competitive advantage will continue to increase, as work
progresses on major infrastructure projects aimed at improving logistics in the country. For example, the construction of the North-
South Expressway linking Hanoi and Ho Chi Minh City will increase domestic transportation capacity along a corridor that connects
industrial zones with urban centres, ports and the border with China. Efforts to boost capacity and improve the efficiency of major
ports such as the Cai Mep International Terminal near Ho Chi Minh City will also raise the attractiveness of nearby industrial areas.
Rapid Recovery In Tourism Will Attract Investment

Vietnam - Tourism Arrivals (2020-2027)
e/f = BMI estimate/forecast. Source: General Statistics Office of Vietnam, BMI
Tourism Boom To Help Non-Residential Buildings Sector Growth
The non-residential buildings sub-sector growth will also be supported by our expectations for Vietnam’s tourism and hospitality
sector to grow strongly over the next decade. Over the past decade, Vietnam has grown to become a popular tourist destination for
regional tourists from Japan, South Korea and China, and tourism has since grown to become an increasingly important contributor
to GDP growth. We expect the market to recover relatively rapidly from the disruption caused by the Covid-19 pandemic, as the vast
majority of countries have lifted all travel restrictions as of 2023. As a result, we continue to hold a positive view of the sector in the
long term, as the government continues to promote the country as a choice tourist destination. We expect to see more investment
increase hotel capacity in Hanoi and Ho Chi Minh City. There will also be more construction of holiday resorts in beach destinations
such as Da Nang, Hoi An and Nha Trang.
Industry Risk/Reward Index

Vietnam Infrastructure Risk/Reward Index
Key View: Vietnam continues to outperform on our Infrastructure Risk/Reward Index, remaining one of the most attractive
investment destinations for infrastructure. Vietnam outperforms on its Industry Rewards, underpinned by our robust growth
forecasts for the market. Strong regulatory support for the sector will continue to drive growth, while also gradually improving its
Industry Risks over our forecast period. While squeezed access to financing for domestic developers in the residential building
sector will weigh on activity in the property sector, it may provide opportunities for foreign firms to increase their presence.
Risk/Reward Snapshot
Vietnam and Asia-Pacific Risk/Reward Index
Scores out of 100. Higher score = more attractive market. Source: BMI Infrastructure Risk/Reward Index
Global And Regional Ranks
• Global rank (out of 104): 11th

• Regional rank (out of 21): 5th
Key Features And Latest Updates
• Vietnam outperforms on its Industry Rewards and remains one of the highest-scoring in the region. We expect the market to
expand robustly over the coming decade, and for Vietnam to be one of the fastest-growing markets in the region.
• We anticipate that relations between Vietnam and Russia will remain strong over our forecast period, even as many markets
move to isolate Russia over the Ukraine war. The close relationship is likely to be sustained, given Vietnam’s dependence on
Russian military equipment for defence and strategic joint oil projects. The key challenge for Vietnamese policymakers is
simultaneously maintaining close relations with the US, which is becoming increasingly important economically for Vietnam.
Risk/Reward Matrix Breakdown

Vietnam & Asia-Pacific - Infrastructure Risk/Reward Index By Component
Note: Scores out of 100; higher score = more attractive market. Source: BMI Infrastructure Risk/Reward Index
Competitive Landscape
The competitive landscape in the Vietnamese construction and infrastructure market is one of the most diverse in South East Asia.
Foreign contractors are awarded more than half of construction roles, reflecting the openness of Vietnam's construction market.
Historically, homegrown state-owned enterprises dominated the market; however, as Vietnam continues to liberalise its market and
enact more supportive policies to encourage greater infrastructure investment, we expect foreign participation in Vietnam's
construction market to grow in the coming years. While domestic contractors remain a significant presence in the construction
industry, private and foreign companies have a much stronger presence in areas where they have a competitive advantage. These
areas include design, consulting, building and managing projects (especially projects that are more technically challenging), and
supplying high-value industrial goods, such as rolling stock and wind turbines. These foreign players are essential to the
development of Vietnam’s infrastructure sector, as they bring technology, and expertise in project management and construction
methods.
Based on data from our proprietary Infrastructure Key Projects Data (KPD), local companies have the largest presence in the
construction scene, holding around 43% of the total construction roles awarded. The proportion of local dominance is lower when
compared with its regional peers. For example, in Indonesia, local companies hold a 65.0% market share; Thai companies hold
56.0% in Thailand; and Malaysian companies hold 62.0% in Malaysia. Only the Philippines has a lower share of domestic dominance
than Vietnam, at 34%. Major domestic players include CotecCons, Civil Engineering Construction Corporation and LILAMA Vietnam
Machine Installation Corporation across various projects. Vietsovpetro and PVC-MS hold the largest share in terms of project value,
but this is concentrated in the Thang Long Offshore Wind Project alone.
Construction Landscape Is Well Diversified

Vietnam - Share Of Construction Roles By Company Origin
Note: May include territories, special administrative regions, provinces and autonomous regions. Source: BMI Infrastructure KPD
The enactment of the Public-Private Partnership (PPP) Law, which came into effect on January 1 2021, signals the government’s
intention to attract more private sector investment in the infrastructure sector. We believe that foreign players will play an
increasingly important role in Vietnam's overall competitive landscape over the next decade. Based on our KPD, there are currently
176 infrastructure projects that are earmarked as PPPs. The majority of these fall under the road and bridge sub-sector, with a total
estimated value of around USD32.2bn. We believe that PPP projects implemented in the Vietnamese road and bridge sub-sector
will serve as a litmus test to assess the effectiveness of the new PPP law and will likely be the sub-sector with the most opportunities
in the near term. We note that 57.0% of all contractor roles are awarded to foreign companies, with three origin markets dominating
- South Korea, Mainland China and Japan. Leading the pack are South Korean companies, with 150.% of market share, represented
by established brands such as GS E&C, Doosan Heavy Industries & Construction and POSCO E&C. In particular, three South Korean
engineering companies, namely GS E&C, POSCO E&C and Hamon Group, were involved in the construction of the USD9.0bn Nghi
Son Oil Refinery and Petrochemical Complex, which was completed in 2018. South Korean dominance in the petrochemical sector
is also demonstrated by Hyundai Engineering & Construction and POSCO’s role in the construction of the USD5.4bn Long Son
Island Petrochemical Complex, which is slated for completion by 2023. South Korea-based companies are further involved in the
construction of power and transport infrastructure, with Doosan appointed as contractor for the 1,330MW Nghi Son 2 Coal Fired
Power Plant and POSCO appointed as contractor for the 12.5km Ha Noi (City) Urban Metro Line 3, along with Daelim Industrial.
Stronger Foreign Presence In Non-Contractor Roles

Vietnam - Share Of Design, Consulting & Equipment Provider Roles By Company Origin
China trails second and currently holds 13.0% of market share. Besides being involved in the construction of segments of the
North-South Expressway and the Hanoi Urban Metro Line 2A, most China-based contractors are involved in the construction of
power projects. We are of the view that China-based investments and involvement in Vietnam’s infrastructure market face a higher
level of political risks, given the volatile state of bilateral relations between the two markets. Japan-based companies hold 8.0% of
market share and are mainly involved in infrastructure projects in the transport and water sectors. Examples include the
construction of the Ho Chi Minh (City) Metro - Line 1 project, which is handled by Shimizu Corp, Sumitomo Corp and Maeda Corp,
and the Binh Hung Sewage Treatment Plant Expansion Project which is primarily tasked to Hitachi Corp.
Japan is more active in the financing landscape in Vietnam. Data from our KPD reveals Japan’s dominance of the Vietnamese
infrastructure financing landscape, with Japan-based financiers accounting for slightly more than 20% of all roles (52 out of 254).
The most active Japan-based financier in the market is the Japan International Cooperation Agency (JICA). JICA has been active in the
Vietnamese market for many years, and had assisted on numerous projects such as the construction of the Cai Mep-Thi Vai
International Port and the Hai Phong (City) 2 Thermal Power Plant, completed in 2013 and 2014 respectively. More recent projects
with JICA involvement include the financing of segments of the North-South Expressway, and the planning of the proposed Hanoi-
Ho Chi Minh City High Speed Rail, which is estimated to cost around USD58bn. The big three Japan-based commercial banks Bank
of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation and Mizuho are also actively involved in lending activities related to
various power projects.
Japan Plays Large Role In Financing Vietnam Infrastructure

Vietnam - No. Of Financier Roles By Origin
In terms of financing, Vietnam remains heavily dependent on concessional loans and developmental finance. We note that export
credit agencies and developmental finance institutions account for more than 40% of all the financier roles in the pipeline (106 out
of 255). This is largely as Vietnam remains a higher-risk market, and will require the support of concessional financing for projects to
be more viable. Among the top 10 financiers in Vietnam, the Asian Development Bank (ADB) and JICA account for the largest share
of project roles. The ADB is actively involved in multiple transport projects, including the Dau Giay (Dong Nai)-Lien Khuong (Lam
Dong) Highway project, the Ho Chi Minh (City) Metro Line networks and segments of the North-South Expressway.
Concessional Financing Remains Key To Vietnam Infrastructure Market

Vietnam - Share Of Financing Roles By Financier - Top Financiers
Vietnam - K
Key
ey Play
Player
erss Financial Data
Name Latest FY Market Cap Revenue Growth (% Operating Profit Growth Net Debt/ Price/
Earnings (VNDbn) y-o-y) (% y-o-y) EBITDA Earnings
Ratio
Cotec
Cotecccons Construction Dec-20 4,650 -38.7 -66.0 -10.95 18.66
Hoa Binh Construction Dec-20 3,648 -31.7 -63.5 9.48 47.21
Gr
Group
oup
Lilama Corpor
Corporation
ation Dec-20 1,116 -13.9 na 4.26 24.49
na = not available. Source: Bloomberg, BMI
Company Profile
Electricity Vietnam Group
• Electricity Vietnam (EVN)'s power companies account for • Tightening credit conditions in the domestic banking sector
almost 60% of Vietnam's total electricity generation. are a key source of funds for EVN. These, together with rising
• EVN has a diversified portfolio and is involved in all types of construction costs, have severely hindered EVN's ability to
power plant projects. implement its investment mandate.
• High debt levels are inhibiting plans for expansion.
• The Vietnamese government is committed to energy sector • Vietnam's Electricity Law (2005) might make operating in
development and latest Power Development Plan requires the electricity sector more complex, especially in relation to
USD128bn in investment by 2030. transitional procedures.
Company Overview
Founded in 1995, EVN is a state-owned utility engaged in the generation, transmission, trading and distribution of electricity.
Although Vietnam has gradually been liberalising its power sector, EVN continues to have a monopoly on power distribution and
trade. EVN owns limited liability power companies, including Power Generation Corporation No. 1, Thu Duc Thermal Power One
Member Limited Liability Company, Electricity North Vietnam, Southern Electricity Corporation, Central Electricity Corporation, TP
Power Corporation Hanoi and the Electricity Corporation TP Ho Chi Minh City. The subsidiary in charge of EVN's transmission grids is
the National Power Transmission Corporation. EVN also has seven other joint stock companies and three affiliates.
As of 2020, EVN's power companies accounted for 39.0% of total electricity generation in the country. EVN also has various
ownership stakes in several independent power plants. EVN has played a role in Vietnam's successful rural electrification
programme by implementing power projects financed by the World Bank.
Activities And Projects
EVN has a number of projects planned over the next few years, including the 50MW Phuoc Thai 1 Solar Farm; the 360MW Ialy HPP
extension; and the Quang Trach II Thermal Power Plant, which has a total capacity of 1,200MW. EVN has also made significant
progress in improving access to electricity, and, at the end of 2020, reported that 99.3% of rural households had been connected to
the national electricity grid. It is aiming for 100% connectivity by the end of 2025.
In addition, National Power Transmission Corporation began operations of its first digital transformer station in Thuy Nguyen district
on April 19 2021. The 210kV station cost around USD15mn and is expected to improve power supply reliability and efficiency for
the neighbouring regions. EVN aims to have all equipment on transmission lines and 80.0% of 110kV circuit facilities to be
digitalised by the end of 2022, and 100% on all medium- and higher-voltage power lines by 2025. According to EVN, it has
completed 61 out of 63 centres for remote control of transformer stations and converted 670 of the 844 transformer stations into
unmanned ones.
Key Financial Data

Key Financial Data FY2017 FY2018 FY2019 FY2020
Revenue (VNDmn) 294,847,705 338,500,562 394,890,318 403,283,407
Net pr
profit
ofit (VNDmn) 6,593,474 6,817,761 9,720,033 14,480,303
Total Assets (VNDmn) 701,580,171 706,504,275 721,460,460 729,451,768
Note: Limited data available as EVN is not publicly listed. Source: EVN, BMI
Coteccons
• The largest private construction company in Vietnam. • Limited experience in infrastructure - past projects have
• Posted strong revenue growth over the past few years. primarily been in the residential/non-residential real estate
• Presence in Cambodia and Laos gives it experience and a sector.
head start, as those markets develop. • Often supported by international organisations for
infrastructure projects. The Noi Bai Terminal 2 was
supervised by Japan Airport Consultants.
• Vietnam has significant infrastructure spending plans, • A lack of technical/managerial expertise and skilled workers
especially in roads and railways. in Vietnam for high-value infrastructure projects.
• Recent laws relaxing foreign ownership of real estate in
Vietnam will help drive demand for Coteccons's projects.
Company Overview
Coteccons is the largest private construction company in Vietnam. In addition to Vietnam, the company has infrastructure and real
estate projects in Cambodia and Laos. Coteccons also controls subsidiaries in building materials and interior furnishing. Most of the
company's ongoing projects are in the residential/non-residential building sector, but its infrastructure subsidiary is also engaged in
the construction of expressways, airports and water systems. Coteccons listed on the Ho Chi Minh City Stock Exchange in 2009.
Coteccons has undergone rapid growth in revenue over the past few years, and the company says that it aims to become the
largest construction company in Vietnam. Although it lacks the institutional weight of Vietnam's numerous state-owned
construction firms, Coteccons has an advantage as a more efficient private company and it is well positioned to take advantage of
the country's growing construction and infrastructure market.
While Coteccons has a significant pipeline of real estate projects - including Landmark 81, a multi-use tower slated to be the
second-tallest building in Vietnam - the company has gradually been expanding into the public infrastructure space. The company
was involved in building Terminal 2 at Hanoi's Noi Bai International Airport, which opened in 2015, and is currently building a bypass
road in Phu Ly, Ha Nam province. Coteccons says its goal was for revenue from infrastructure projects to account for 50.0% of total
revenue by 2020.
Key Financial Data

Key Financial Data FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Revenue (VNDbn) 20,783 27,177 25,861 23,733 14,589 9,077
Pr
Profit
ofit after tax (VNDbn) 1,422 1,653 1,510 711 334.5 24.1
Earnings per shar
sharee (VNDbn) 20,669 20,436 18,357 8,856 4,383 323
Source: Bloomberg, BMI
Vinaconex
• One of the largest and most diversified infrastructure • Operating segments, such as alcohol and tobacco trading, or
companies in Vietnam, making it capable of participating in a operating supermarkets share few synergies with core
wide variety of projects. construction business.
• Close relations with the government, as a partially state- • Bureaucratic inefficiencies in the organisation carried over
owned enterprise, has helped it win contracts on strategic from its days as a government agency; Vinaconex has 26
projects. subsidiaries at last count, many with overlapping
• Vertically integrated, with businesses in design, engineering, responsibilities.
construction, management and the production of building
materials.
• Vinaconex is well positioned to benefit from Vietnam's fast- • Sizeable debt/equity ratio of more than 1.8 could limit the
growing construction industry, which is being driven by extent of future investments and business expansion.
rising private investment and a pipeline of government- • Increasing competition from private and foreign
supported projects. construction companies, as the government liberalises the
• Labour-export business will be useful as less-developed sector and reduces foreign-investment restrictions.
economies in the region, such as Cambodia or Myanmar,
seek construction expertise from foreign companies.
Company Overview
Vinaconex is a major construction, infrastructure, investment and trading company. The company, through its numerous
subsidiaries, is involved in transport, energy and utilities infrastructure, as well as in real estate, social infrastructure and other public
works projects. Vinaconex also has subsidiaries involved in the production, transportation and trading of construction materials, as
well as a myriad of other services, ranging from forestry and financing to education and labour supply. In 2008, Vinaconex was the
first state-owned enterprise in Vietnam to be publicly listed, although a majority of shares are controlled by the government.
Vinaconex's size, historical ties with the government and experience in projects across infrastructure sectors mean that it continues
to have a steady stream of construction projects. The company is actively involved in projects, ranging from residential and
commercial construction (such as the Trung Hoa - Nhan Chinh New District in Hanoi) to roads, airports, power plants and water
supply and treatment facilities. We believe that Vinaconex is well equipped to continue to take advantage of Vietnam's fast-growing
construction industry. The company says it has long-term plans to consolidate construction into one of its two core businesses.
Vinaconex regularly partners with foreign engineering and construction companies, especially on projects requiring higher levels of
technical expertise. For example, the company is working with China Road and Bridge Construction on the 2km USD132mn Cao
Lanh Bridge, and with South Korea-based Kumho Engineering and Construction and the US-based Turner Construction on the
USD400mn VietinBank Business Centre in Hanoi. On the Vinaconex website, the company states that it wants to cooperate with
foreign companies to build managerial, technical and working experience. Foreign companies are likely to capitalise on this
opportunity, as partnering with firms like Vinaconex would help increase their access to Vietnam's booming construction industry
and improve their experience and knowledge of the local operating environment.
The company has a number of businesses tangential to engineering and construction, which are seen as hallmarks of vertical
integration and bureaucratic inefficiencies. Vinaconex also owns a design consultancy, produces construction materials, manages
shopping centres and supermarkets, oversees the export of labour for foreign construction projects, and operates schools and
shops for their workers. While aspects of these businesses can help support construction on the supply and demand sides, they also
risk perpetuating bureaucratic inefficiencies in the company from its days as a government agency, decreasing its operational
competitiveness compared with newer private firms.
Key Financial Data

Key Financial Data FY2016 FY2017 FY2018 FY2019 FY2020
Revenue (VNDmn) 8,547,840.97 10,852,128.15 9,730,996.87 2,909,253.44 2,602,078.09
Net inc
income
ome (VNDmn) 499,586.63 1,341,537.12 492,457.53 726,817.53 1,663,427.80
Pric
Price/earnings
e/earnings rratio
atio 11.94 7.58 21.98 18.4 12.57
Source: Bloomberg, BMI
Infrastructure Methodology
Connected Thinking
BMI employs a unique methodology known as 'Connected Thinking'. This means that our analysis captures the inter-relatedness of
the global economy, and takes into account all of the relevant political, macroeconomic, financial market and industry factors that
underpin a forecast and view. We then integrate them so as to explain how they interact and affect each other. Our Connected
Thinking approach provides our customers with unique and valuable insight on all relevant macroeconomic, political and industry
risk factors that will impact their operations and revenue-generating potential in the industry/industries within which they operate.
We use a transparent forecasting model as a base for our industry forecasts, but rely heavily on our analysts' expert judgement to
ensure our forecasts capture all of the insights we derive using our unique Connected Thinking approach. We believe analyst
expertise and judgement are the best ways to provide the most accurate, up-to-date and comprehensive insight to our customers.
Infrastructure Methodology
Our data and forecasts capture the entire spectrum of construction activities, including all areas of civil engineering and building
construction, as defined under the ISIC Rev.4.
Our data and forecasts for Infrastructure are broken down into: transport (road, rail, ports and airports) and energy & utilities (power
plants & transmission grids, water, oil & gas pipelines). Our building data and forecasts are broken down into residential and non-
residential construction.
Construction Industry
Construction Industry Value
Our construction data is derived from national accounts from each market's national statistics office (or equivalent) or from
international organisations which compile national account data, most notably the UN. Specifically, it measures the gross value
added (GVA) of the construction industry over the reported 12-month period in nominal values. GVA (also known as GDP by
industry) measures the contribution to overall GDP. The components of value added consist of compensation of employees, taxes
on production and imports less subsidies, and gross operating surplus. We source our construction industry value data in nominal
local currency terms.
This data is used because it is reported by virtually all markets and can therefore be used for comparative purposes.
Construction Industry Value Real Growth
Our construction industry value forecasts are based on a regression model, using a market's own historical time series and key
macroeconomic variables, such as gross fixed capital formation, from BMI Country Risk.
In addition, we will also apply analyst expert judgement to refine and finalise our construction industry value real growth forecast,
based on exogenous and endogenous variables or events, not captured by our regression model. Real growth is defined as industry
value nominal growth adjusted for industry-specific inflation (construction deflator).
Bearing in mind that other factors need to be taken into consideration, both quantitative and qualitative, our analysts also factor in
industry-specific issues in deriving our forecasts:
• Political risk - potential change in leadership, policy continuity

• Regulatory outlook - pricing structures of specific markets, bureaucracy, red tape
• Currency outlook - currency volatility, cost of imports
• Funding availability - fiscal health of the government, openness to private/foreign investment
• BMI Infrastructure Key Projects Data - indication of a market's infrastructure project pipeline by sector
• High Frequency Data – construction permits, starts, confidence etc
• Company developments - reflective of market dynamics and competitive landscap
Construction Industry, % Of GDP/Construction Value (USD)
These are derived indicators, calculated using our Country Risk team's GDP and exchange rate forecasts.
Construction Output
These figures refer to the gross output of the construction industry. Gross output measures the total sales or receipts of the
industry, including sales to final users in the economy as well as sales to other industries. Gross output consists of construction
industry value and intermediate consumption.
As in the case of construction industry value data, our construction output data is derived from national accounts from each
market's national statistics office (or equivalent) or from international organisations which compile national account data, most
notably the UN.
Forecasts are the result of a regression model, using a market's own historical time series as well as our construction industry value
forecasts.
Construction Intermediate Consumption
These figures refer to the intermediate consumption of the construction industry. Intermediate consumption measures the goods
and services employed in the production process of other goods and services and not for final consumption. Intermediate
consumption is equivalent to the difference between gross output and GVA.
Our Construction Intermediate Consumption figures are a function of construction output minus construction industry value.
Cement Data
We forecast Portland cement production, consumption and net exports, in millions of tonnes.
Our historical national production data is sourced from the United States Geological Survey (USGS), while trade data is sourced from
TradeMap by the International Trade Centre. By calculating production and net exports, we are able to determine historical
consumption levels.
These consumption levels are then forecast over our 10-year forecast period using our construction growth forecasts, reflecting the
changing demand picture for cement from the industry.
Construction Sector Employment
Total Construction Employment
This data is sourced from either the national statistics office or the International Labor Organization. It includes all those employed
within the sector.
Our total construction employment forecasts are based on a regression model, using a market's own historical time series and key
macroeconomic variables from our Country Risk service.
Infrastructure Data Sub-Sectors
Infrastructure Data Sub-Sectors
Source: BMI
For select markets, in addition to our construction industry value figures, we also provide industry value (gross value added) figures
for subsectors of the construction industry.
We use a combination of historic data as reported by central banks, national statistics agencies and other official data sources, and
leverage our analysts’ knowledge of market and subsector dynamics and project information included in our proprietary BMI
Infrastructure Key Projects Data, a comprehensive catalogue of the major power, transport, utilities, residential and non-residential
projects in each market.
Given a variation in construction sub-sector classifications under various national accounts systems currently in use, we segment
official construction sub-sector data into consistent and proprietary categories to compare industry value across sub-sectors. First,
our construction industry data is broken down into infrastructure construction on one hand and residential and non-residential
building construction on the other. Infrastructure construction is then broken down where possible into transport infrastructure and
energy and utilities infrastructure, which are then further broken down where possible into the categories illustrated in the figure
above. Residential and non-residential building construction in turn is broken down where possible into residential building and
non-residential building.
Our infrastructure sub-sectors industry value forecasts are based on a regression model, using a market's own historical time series
and key macroeconomic variables, such as fixed capital formation, from our Country Risk service.
In addition, we also apply analyst expert judgement to refine and finalise industry value real growth forecasts, based on exogenous
and endogenous variables or events, not captured by our regression model.
The residential and non-residential industry values are a function of construction minus infrastructure industry value. We further rely
on national sources and our BMI Infrastructure Key Projects Data to further estimate the separation between the two areas of
building when historic data is not available.
Infrastructure Risk/Reward Index
Our Infrastructure Risk/Reward Index (RRI) quantifies and ranks a market's attractiveness within the context of the Infrastructure
industry, based on the balance between the Risks and Rewards of entering and operating in different markets.
We combine industry-specific characteristics with broader economic, political and operational market characteristics. We weight
these inputs in terms of their importance to investor decision-making in a given industry. The result is a nuanced and accurate
reflection of the realities facing investors in terms of first the balance between opportunities and risk and second between industry-
specific and broader market traits. This enables users of the index to assess a market's attractiveness in a regional and global
context.
The index uses a combination of our proprietary forecasts and analyst assessment of the regulatory climate. As regulations evolve
and forecasts change, so the index scores change providing a highly dynamic and forward-looking result.
The Infrastructure Risk/Reward Index universe comprises 104 markets.
Benefits Of Using Our Infrastructure RRI
• Global Rankings: One global table, ranking all the markets in our universe for Infrastructure from least (closest to zero) to most
attractive (closest to 100).
• Accessibility: Easily accessible, top down view of the global, regional or sub-regional Risk/Reward profile.
• Comparability: Identical methodology across 104 markets for Infrastructure allows users to build lists of markets they wish to
compare, beyond the confines of a global or regional grouping.
• Scoring: Scores out of 100 with a wide distribution, provide nuanced investment comparisons. The higher the score, the more
favourable the market profile.
• Quantifiable: Quantifies the Rewards and Risks of doing business in the infrastructure industry in different markets around the
world and helps identify specific flashpoints in the overall business environment.
• Comprehensive: Comprehensive set of indicators, assessing industry-specific risks and rewards alongside political, economic
and operating risks.
• Entry Point: A starting point to assess the outlook for the infrastructure industry, from which users can dive into more granular
forecasts and analysis to gain a deeper understanding of the market.
• Balanced: Multi-indicator structure prevents outliers and extremes from distorting final scores and rankings.
• Methodology: The index is a combination of proprietary BMI forecasts, analyst insights and globally acceptable benchmark
indicators.
Weightings Of Categories And Indicators

Infrastructure Risk/Reward Index
Source: BMI
The RRI matrix divides into two distinct categories:
Rewards: Evaluation of an industry's size and growth potential (Industry Rewards), and macro characteristics that directly impact
the size of business opportunities in a specific industry (Country Rewards).
Risks: Evaluation of micro, industry-specific characteristics, crucial for an industry to develop to its potential (Industry Risks) and a
quantifiable assessment of the political, economic and operational profile (Country Risks).
Assessing Our Weightings
Our matrix is deliberately overweight on Rewards (60% of the final RRI score for a market) and within that, the Industry Rewards
segment (60% of final Rewards score). This is to reflect the fact that when it comes to long-term investment potential, industry size
and growth potential carry the most weight in indicating opportunities, with other structural factors (demographic, labour statistics
and infrastructure availability) weighing in, but to a slightly lesser extent. In addition, our focus and expertise in emerging and frontier
markets has dictated this bias towards industry size and growth to ensure we are able to identify opportunities in markets where
regulatory frameworks are not as developed and industry sizes not as big as in developed markets, but where we know there is a
strong desire to invest.
Infr
Infrastructur
astructuree RRI Indicator
Indicatorss - Explanation And Sour
Sourcces
Source Rationale
Rewards
Industr
Industryy R
Rewar
ewards
ds
Construction Industry Value BMI Forecast Size of the construction industry indicates potential for opportunities
and scale of operations. USDbn, Five Year Average Forecast.
Construction Industry Value BMI Forecast Growth of the construction industry indicates potential for growth in
opportunities. Real Growth, % Change y-o-y, Five Year Average Forecast.
Project Pipeline, % of Industry BMI Key Projects Data/BMI Size of the project pipeline in the pre- and under-construction phase
Value Forecast relative to the construction industry size, indicates the potential for
project opportunities, progression of projects through the pipeline and
growth of pipeline.
Countr
Countryy R
Rewar
ewards
ds
GDP Per Capita BMI Forecast The wealth of the population indicates demand for infrastructure. USD,
Five Year Average Forecast
GDP Per Capital Growth BMI Forecast As a population gets richer, we would expect to see greater demand for
infrastructure, especially transport. Local Currency, % Change y-o-y, Five
Year Average Forecast. Except: Zimbabwe & Venezuela where USD is
used.
Population BMI Forecast Larger population creates greater demand for infrastructure. Five Year
Average Forecast
Population Growth BMI Forecast Growth of population necessitates increased infrastructure stock. %
Change y-o-y, Five Year Forecast.
Urban Population % Of Total BMI Forecast High and growing concentration of population in urban areas indicates
greater pressure on infrastructure assets. Five Year Average Forecast.
Risks
Industr
Industryy Risks
Infrastructure Competitive BMI Subjective Indicator Assesses the openness of the competitive landscape. Considers the
Landscape sophistication and saturation of the existing market, the ability to
compete fairly in tenders and barriers to international companies
entering the market.
Construction – Timeliness BMI Project Risk Index Measures the risk of delays to project development. Based on ability to
secure permits and the potential for protracted bureaucracy to delay or
increase the cost of operations.
Construction – Contracts BMI Project Risk Index Measures the risk of contracting issues. Assesses both the efficiency of
contract resolution and the sophistication of local regulations.
Legal Environment BMI Operational Risk Index Measures risk stemming from lack of transparency and legal protection.
Assesses the strength of rule of law, transparency and investor
protection.
Labour Market Risk BMI Operational Risk Index Measures the risk to project development based on the labour market.
Assesses the size, education levels and cost of employment.
Countr
Countryy Risks
Long-Term Economic Risk Index BMI Country Risk Index Takes into account the structural characteristics of economic growth,
the labour market, price stability, exchange rate stability and the
sustainability of the balance of payments, as well as fiscal and external
debt outlooks for the coming decade.
Source Rationale
Short-Term Economic Risk Index BMI Country Risk Index Seeks to define current vulnerabilities and assess real GDP growth,
inflation, unemployment, exchange rate fluctuation, balance of
payments dynamics, as well as fiscal and external debt credentials over
the coming two years.
Long-Term Political Risk Index BMI Country Risk Index Assesses structural political characteristics based on our assumption
that liberal, democratic markets with no sectarian tensions and broad-
based income equality exhibit the strongest characteristics in favour of
political stability, over a multi-year time frame.
Short-Term Political Risk Index BMI Country Risk Index Assesses pertinent political risks to investment climate stability over a
shorter time frame, up to 24 months forward.
Operational Risk Index BMI Operational Risk Index Focuses on existing conditions relating to four main risk areas: Labour
Market, Trade & Investment, Logistics, and Crime & Security.
Source: BMI
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olonnade,, Canary W
Wharf
harf,, L
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ondon, E14 5GN, UK
Tel: +44 (0)20 7248 0468
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Web: www.fitchsolutions.com/bmi
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ISSN:
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Key Forecasts And Latest Updates

Construction And Infr

Construction And Infr

2023-2032: Numerous Growth Drives Make Vietnam A Regional Outperformer

Maintaining Strong Growth Trends

f = BMI forecast. Source: Asian Development Bank, BMI

Continued Government Support Under 2021-2025 Five-Year Plan

Vietnam, Cambodia And Laos Leading Regional Growth

e/f = BMI estimate/forecast. Source: Local sources, BMI

New PPP Law A Milestone For Vietnamese Infrastructure Market

Roads And Bridges Dominate PPP Project Pipeline

Source: BMI Key Projects Data

Road PPP Projects A Test

Greater Flood Protection Needed

2023-2032: Growth Ahead But There Will Be Challenges

Urbanisation And Industrial Expansion Driving Transport Needs

Urban Population Growth to Strain Transport Networks

f = BMI forecast. Source: National sources, BMI

Ports And Waterways

Aggressive Road Expansion Under Way

Vietnam's Expressway U-Turn A Test For New PPP Law

The five sub-projects are:

• National Highway 45-Nghi Son (45km)

Metro Projects Support Railways Growth Outlook

Ambitious Vietnamese High-Speed Rail To Face Several Hurdles

interest and a weakening business case.

Airports Boosted By Megaprojects

Vietnam - Major TTrranspor

Project Sub- Value Size Project Companies Time Status

Minh (City) {Japan}, Fukken Co Ltd [Consultant/Project

Energy & Utilities Infrastructure

2023-2032: Focus On Expanding Domestic Capacity

Thermal Facilities Dominating Power Infrastructure Growth

e/f = BMI estimate/forecast. Source: EIA, National sources, BMI

Thermal Power Makes Up Majority

Natural Gas Generation Will Be Reliant On LNG Imports

Coal Dominates Power And Grids Project Pipeline

Source: BMI Infrastructure KPD

Hydropower: Indispensable But Problematic

Slow Growth For Hydropower

e/f = BMI estimate/forecast. Source: National sources, BMI

Lagging Behind Neighbours

e/f = BMI estimate/forecast. Source: National sources, BMI

More Investment In Transmission Network

Water: Rapid Urbanisation And Climate Change Driving Needs

Vietnam - Major Ener

2023-2032: Positive Outlook Supported By Foreign And Private Investment

Need For Affordable Housing To Spearhead Residential Sector Growth

Urbanisation A Primary Driver Of Real Estate Demand

e/f =BMI estimate/forecast. Source: National sources, BMI

Strong Investment In The Industrial Sector

Heavy Investment In Manufacturing To Continue

Source: General Statistics Office of Vietnam, BMI

Rapid Recovery In Tourism Will Attract Investment

e/f = BMI estimate/forecast. Source: General Statistics Office of Vietnam, BMI

Tourism Boom To Help Non-Residential Buildings Sector Growth

Industry Risk/Reward Index

Global And Regional Ranks

• Global rank (out of 104): 11th