In expanding financial resources, the public-private partnership (PPP) method eases the burden on the State budget, Dr. Vu Tien Loc, Chairman of the Vietnam International Arbitration Center (VIAC), told a seminar launching a report on PPP contracts and a report on mobilizing new financing for infrastructure projects in Vietnam on November 16. “However, in order to truly attract resources from the private sector, it is necessary to build investor confidence in this method,” he said.

“Regarding capital demand for infrastructure development, capital resources mobilized from the private sector play an extremely important role and can be mobilized if there are sufficient suitable mechanisms, because Vietnam is in need of capital for infrastructure development.”

The PPP model has been supported by a range of legal documents but actual implementation still encounters challenges.

The 2017 Global Infrastructure Outlook shows that Vietnam needs more than $600 billion to fulfil infrastructure targets by 2024.

Meanwhile, the Vietnam Business Forum’s Infrastructure Working Group estimates that each year the Vietnamese Government can only spend between $15 and 18 billion (about 7 per cent of GDP) on infrastructure. The country actually needs around $25-30 annually for investment in infrastructure, including in the electricity sector.