VietNamNet Bridge – There is a growing tendency that Vietnamese enterprises now like making large-scale investments in the projects in foreign countries.

Earlier this month, the Vietnam-Laos Joint Stock Corporation, in which Song Da Group holds the controlling stakes, kicked off the construction of Xekaman 1 hydropower plant in Sanxay district in Attapeu province in Laos. The 100 percent Vietnamese invested project has the total investment capital of 441 million, and it will have the designed capacity of 322MW.

To date, this is the largest scaled investment in a power project in Laos. The project, once again, shows a new movement of Vietnamese businessmen bringing capital to other countries to seek investment opportunities.

Investment on power projects on the rise

At the kick-off ceremony of Xekaman 1, the project was mentioned as a part of the energy cooperation program between Vietnam and Laos which started in 2006. The aim of the program is that power plants will be built in Laos so as to develop the infrastructural conditions in Laos. Especially, the power plants will sell 3000-5000 MW of electricity to Vietnam.

In fact, in the first phase of the cooperation program, the investment scale was modest due to problems in profitability, the poor infrastructural conditions in Laos, and many other reasons.

However, Vietnamese enterprises have been trying to push up investments in power plants in recent years, especially at a time when power shortages have become more serious, and Vietnam is forced to import electricity at high prices. Meanwhile, problems relating to the profitability of projects have been settled, since Vietnam is coming closer to using market pricing mechanisms.

The fact that local power companies are asking local enterprises to cut power consumption by 20 percent in 2011, which is a big challenge for manufacturers, has turned out to be an opportunity for power companies.

According to the Ministry of Planning and Investment (MPI), in the first two months of the year alone, three outward investment projects in electricity, water and air conditioner manufacturing and distribution were registered by Vietnamese investors. The registered investment capital of the projects is 1.2 billion dollars,,which accounts for 97 percent of total outward investment in the first two months of the year.

Most recently, on March 2, Song Da Group received an outward investment license for Sekong 3 project in Laos, capitalized at 275 million dollars.

As for the group alone, to date, three its power projects have entered the construction including Xekaman 1 and 3 and Sekong 3 power plant, capitalized at 1.03 billion in total.

Going abroad a trend

Also according to MPI, 16 outward investment projects in nine business fields were registered in the first two months of the year. The total registered capital has reached 1.264 billion, only 300 million dollars lower than the foreign direct investment in Vietnam registered for the same period.

If comparing with the first 10 years since Vietnamese enterprises began making outward investment, the registered capital in the first two months of 2011 is 93 times bigger. The investment capital in 1999-2005 is just equal to 58 percent of the registered capital in the first two months of 2011.

It seems that Vietnamese investors tend to like big projects. Every project registered in the first two months of the year has the capital of 79 million dollars on average, much higher than the investment projects in Vietnam during the same period, at 14.6 million per project.

By the end of February 2011, Vietnam had had 575 outward investments, and Vietnamese enterprises had registered to make investment in 55 countries and territories, capitalized at 23.7 billion in total.

C. V