We say welcome in the local language to our new EGP country: Vietnam. Business operations in this southeast Asian nation only began a few months ago, but we have already achieved some great results. In this interview, our Head of Business Development, Asia-Pacific region, Chung Gu Yoon, talks about the exciting challenges that lie ahead.
Vietnam is a country with enormous potential: in recent years it has seen rapid expansion in terms of wind and solar power, while it is one of the fastest growing markets when it comes to electricity demand. Not only that, it has a vibrant economy and a young, numerate population. We meet our Head of Business Development for the Asia-Pacific region, Chung Gu Yoon, who talks about the challenges we will face over the next few years in a new country for EGP.
Please describe how EGP Vietnam is structured, in terms of its team, functions, and general purpose.
EGP Vietnam (EGPVN) was officially established in December 2021 with a core team to develop a renewable energy project pipeline that will enable it to contribute to the energy transition in Vietnam. While the Business Development team, which is largely based out of our Singapore office, had been scouting the market since 2016, we needed a local team to bring our pipeline projects to a level that was ready for investment. Currently, we have a core team of 10 employees consisting of Business Development (BD), Engineering & Construction (E&C), Procurement, Legal, Administration Finance & Control (AFC), and People & Organization (P&O).
What are the main business objectives and targets for EGP Vietnam, for this initial period? Could you give an example of the activities that have already been - or will be - put in place (in terms of plant, training, recruitment, and relations with local communities)?
In our current business plan, we have a target of commissioning our first utility-scale renewable energy power plant by 2024. To reach this goal, we already have 5692 MW of projects in our pipeline, out of which 915 MW are at an advanced stage. We have also set a target of increasing this advanced-stage pipeline to 1600MW by the end of the year.
As most of our employees are new hires who joined the Enel family less than a year ago, we have been focusing our efforts on the onboarding of our new team members. In addition to the new onboarding program, which was prepared at the regional level and followed by all employees, each of the functions has conducted its training and induction programs. In particular, visits by colleagues from EGP Korea (Procurement and E&C), which was also established recently, meant that common experiences and knowledge could be shared directly and effectively.
As you can imagine, setting up the organization and recruiting/onboarding our first employees was quite challenging during the pandemic. However, now that the restrictions have been lifted, visits by colleagues and the ability to go to the office to meet with colleagues and counterparts have greatly improved the pace of induction and collaboration.
While recruitment continues for a few more positions, we will maintain this core team of professionals to bring our project to investment, after which we will look at the enlargement of the team to cope with the increasing operational needs.
As for relations with local communities, we are working through our local development partners to engage with stakeholders (government, community, and suppliers) to develop our greenfield project pipeline. We are also working with our Sustainability team to explore ways to employ our Creating Shared Value (CSV) approach in the development of our projects.
Vietnam is a fascinating country with a rapidly growing economy and a bright population whose members are particularly good at math. What do you think the country and its people have to offer when it comes to building a green energy company in terms of human resources?
Vietnam has been an economic success story, achieving double-digit GDP growth for more than two decades. With a burgeoning manufacturing industry and a growing middle class, it has also been one of the fastest-growing markets in terms of electricity demand. Furthermore, with a median age of 32, Vietnam also boasts a young and vibrant population that's eager to grow and improve its quality of life.
Vietnam has become a leader in renewable energy growth in recent years. Since 2018, there has been a boom in both solar and wind energy, with more than 22,000 MW being installed in the last four years. As such, Vietnam's government, industry, and workforce have shown their ability to oversee such growth.
We are excited to have in our team professionals who have been part of this recent growth.
Could you offer us a quick overview of the energy scenario in Vietnam and your point of view regarding EGPs contribution to leading the energy transition there?
Vietnam is one of the fastest-growing markets in the world, both in terms of GDP and electricity demand. While it has already achieved impressive growth, with more than 22 GW installed in the past four years, it will need an even more ambitious growth trajectory to realize its goal of net-zero (carbon neutrality) by 2050. It is expected to need more than 150 GW of renewable energy by 2045.
We believe that Vietnam could potentially become EGP's largest market in the Asia Pacific following India. To give you an idea, achieving a 10% market share in Vietnam would mean reaching an installed capacity of 6 GW by 2030.
The Vietnam government has been implementing a long-term plan to restructure its power sector. It has already introduced a wholesale electricity market and has begun the process of unbundling its generation sector. In the future, it is planning to further deregulate the distribution and retail sectors. This may open further opportunities for Enel's other business lines to enter the market and create further value.
Can you give us a recent example of success?
We recently signed an agreement to secure our first project (solar PV, 160 MW) which we expect to be investment-ready over the next 6 to 12 months. This required extensive negotiations with a local partner and due diligence for both commercial and technical issues. This involved the entire team (BD, E&C, Procurement, Legal) to ensure the project's viability and for our local partner to have the confidence that we can provide value to such a near-term opportunity.
Securing this project will give visibility in implementing our first renewable energy project in Vietnam when the next remuneration regulatory scheme will be announced in the coming months.
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