Vietnam's new PPP law seen as an important catalyst for growth

In Asia’s infrastructure race, Vietnam is among the leaders. The country's demand for sustainable infrastructure investment could reach $25 billion per year, according to the World Bank.

Without the PPP law, transactions in Vietnam are exposed to a higher degree of legal risk. As a result, Vietnam’s infrastructure sector annual growth potential is capped at only 6.1% through 2029, despite it has one of the fastest-growing economies in the world, Fitch commented.

Emerging economies in the region will invest as much as $26 trillion through 2030 to build transport networks, boost power supply and upgrade water and sanitation facilities.

Vietnam, one of the smallest economies in the region, is boosting infrastructure to lure more foreign investors as it positions itself as Asia's next tiger economy, Bloomberg cited data from Asian Development Bank

Currently, Vietnam’s State budget accounts for about two-thirds of infrastructure investment demands, World Bank says. Inviting private sector to participate in developing infrastructure is a need.

The government has recognized the urgent need to attract private capital into the infrastructure space to keep pace with development. Fitch forecasts Vietnam’s economy to grow at an average of 6.4% year-on-year in real terms over the next decade through 2029, as the country emerges as a choice manufacturing hub and continues to attract foreign direct investments.

Rapid economic growth in Vietnam over the past decade has drastically increased the demand for transport, energy, and power infrastructure, with the government moving to invest heavily through public spending.