Equinor, Norway’s state-owned energy company, announced that it has scrapped its plans to invest in Vietnam’s offshore wind sector.
According to a Reuters report, this decision represents a blow to Vietnam’s ambitions for green energy expansion.
Despite Vietnam’s appeal to international investors due to its favorable wind conditions in shallow coastal waters, delays in regulatory reforms have led some potential investors to rethink their commitments.
This marks the first instance of Equinor shutting down an international office dedicated to offshore wind projects.
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In recent years, the company has withdrawn from over a dozen countries with oil and gas operations, redirecting its focus toward renewable energy and low-carbon technologies.
The energy company’s withdrawal adds to the challenges for Vietnam’s offshore wind sector, following Danish firm Orsted’s decision last year to pause its plans for large-scale wind farms in the country.
Vietnam plans to install 6 gigawatts (GW) of offshore wind capacity by 2030, which would represent 4% of its total planned capacity.
This is part of its strategy to cut coal usage and achieve net zero carbon emissions by mid-century.
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However, the execution of the strategy has faced delays due to political dilemmas, which have caused a hindrance in necessary reforms and projects.
The sensitive nature of developing projects in the disputed South China Sea complicates progress.
The industry ministry is now pushing to allocate the first pilot offshore wind project to state-owned enterprises, a move that foreign investors fear could impede industry growth due to the limited capabilities of local firms.