Green transformation in industrial zones welcomes new investment wave

Overview of the Vietnam Industrial Real Estate Forum taking place on the afternoon of July 30, 2024. Photo: T.D

Highlights of investment attraction

Information at the Vietnam Industrial Real Estate Forum (VIPF) 2024 with the theme "Greening to welcome new investment waves" organized by Investment Newspaper on July 30, the Organizing Committee said that by the end of May 2024, the whole country had 425 industrial parks and export processing zones established with an industrial land fund of about 89,200 hectares. Of which, 299 industrial parks have been put into operation, attracting a large amount of investment capital, supplementing important resources for investment in socio-economic development of the country in general, as well as of localities in particular.

By the end of 2023, industrial parks and economic zones nationwide have attracted over 11,200 foreign direct investment (FDI) projects and 10,600 domestic investment projects, with total investment capital reaching 251.6 billion USD and 2.67 million billion VND, respectively; realized investment capital reached about 68.2% and 45.3%, respectively.

Notably, according to Ms. Trang Le, Senior Director of Research and Consulting, JLL Vietnam, in 2023, FDI attraction increased by 34%, which was much more impressive if compared to the total FDI growth of only 3%. This shows that the shift of FDI globally has slowed down, but Vietnam still emerges as a bright spot.

Looking back at the development of 30 years, it can be affirmed that the model of industrial parks and economic zones has always been an important role and position as well as a driving force for growth and the process of industrialization and modernization of the country. Moreover, it is a channel to attract domestic and foreign investment resources, contributing to improving the business environment and enhancing competitiveness, ensuring sustainable development. However, as green growth and sustainable development are becoming the favorite trend of many countries in the world, the pressure from the requirements of the market and partners for sustainable development is increasing; the greening of industrial parks and economic zones to welcome green investment capital is a mandatory requirement.

Many difficulties in practice

Recently, many large domestic and foreign investors, especially foreign investors such as LEGO, Heineken, etc., have paid special attention to green production through the construction of carbon-neutral factories in Vietnam, while using renewable energy and green energy for production and business activities.

Therefore, eco-industrial parks are becoming the selection criteria of foreign investors with the goal of sustainable development, economic benefits combined with responsibility to the community and society, especially associated with ESG criteria as required by industry chains.

Despite many advantages, according to Ms. Trang Le, Vietnam is in the early stages of testing the eco-industrial model. However, putting eco-industrial models into practice will still face many difficulties.

First, it can be said that there is not much financial support for investors. Green transformation is costly in the early stages, and certain support is needed to put the greening model into practice. Currently, it mainly comes from the private sector, but not everyone has enough resources to widely apply it.

Given policies, there are only external frameworks and lacking specific, in-depth regulations, which are crucial to easily put the ecological industrial model into practice.

Mr. Hardy Diec, CEO of Industrial Park Management and Services Joint Stock Company (Vietnam Industrial Park) said that, along with facilitation measures, the licensing process should also be simplified. Vietnam is in the sights of many multinational companies but they are still afraid of this barrier. Only when these barriers are lifted, will international investors continue to pour into Vietnam, and when they come to Vietnam, they will bring with them an entire ecosystem, allowing Vietnam to compete better and better…

Especially, given greening, the biggest challenge is cost. Definitely, there must be an expense on a percentage of the land fund to deal with environmentally friendly requirements. With industrial parks, there will be programs to ensure that our projects are always environmentally friendly and meet the needs of customers, Mr. Hardy Diec emphasized.