Vietnam’s FDI Reaches Over $21.5 Billion in First Half
In the first six months of the year, registered Foreign Direct Investment (FDI) into Vietnam’s manufacturing and processing sector hit nearly $12 billion, marking a 3.9% increase year-on-year. According to a report from the Foreign Investment Agency (FIA) under the Ministry of Finance, this sector continues to be a cornerstone for FDI attraction, accounting for the largest share in both new projects (38.2%) and capital adjustments (56.5%).
China currently leads in the number of new FDI projects within manufacturing and processing, contributing 30.1%. This trend indicates that Chinese businesses are relocating production to leverage the advantages of ASEAN’s regional and international trade networks.
Alongside the strong capital inflows, the Industrial Production Index (IPI) for manufacturing and processing in the first six months also rose by 11.1% compared to the same period in 2024, outperforming the overall industrial sector’s 9.2% increase. Total retail sales of goods climbed by 9.8%, which, although lower than last year’s 10.8% for the same period, still reflects positive consumption.
However, inventory levels are showing an upward trend. By the end of June, inventories in the manufacturing and processing sector increased by 6.7% m-o-m and 12% y-o-y compared to June 2024. The average inventory ratio reached 85.7%, significantly higher than last year’s 76.9%.
Despite high inventory, most businesses maintain a positive outlook. A survey by the General Statistics Office revealed that 80.8% of manufacturing and processing enterprises anticipate Q3 operations to be better or stable compared to Q2. Notably, FDI enterprises are the most optimistic at 81%, followed by the non-state sector (80.7%) and state-owned enterprises (79.8%).
Overall, total registered FDI in Vietnam (including new registrations, adjusted capital, and capital contributions/share purchases) reached over $21.5 billion, a nearly 33% increase y-on-y. For newly registered capital alone, there were 1,988 investment projects totaling almost $9.3 billion, a nearly 10% decrease in capital compared to the same period last year.
The FIA assesses that the balanced growth in both capital scale and project numbers demonstrates investor confidence in Vietnam’s business environment. The consistent FDI flow, the trend of production expansion, and business expectations are seen as foundational elements for the manufacturing and processing industry to continue leading investment attraction in the latter half of 2025.
Industrial Park Businesses Shift to Flexible Strategies
According to VNDirect Securities Company, the US tariff event in April 2025 and the decision to postpone its enforcement for 90 days have made the outlook for the industrial park (IP) sector more unpredictable than ever.
The firm believes that IP businesses are still under significant pressure due to their direct dependence on FDI and international trade, despite the rapid recovery of the stock market.
The assessment suggests that in the coming period, without clearer developments from the US side, land leasing demand may fluctuate and market sentiment will remain fragile.
In this context, VNDirect notes that many IP businesses are proactively adopting defensive strategies in the face of external risks, such as postponing capital increase plans, reviewing operating budgets, and diversifying revenue streams.
Although land leasing activities are still ongoing, investor sentiment in the stock market has become more cautious, especially concerning clients with a high proportion of exports to the US.
Therefore, VNDirect recommends a neutral stance on IP stocks for investors. “While the fundamentals are still supported by approved projects, reinvested FDI, and improving infrastructure, information ‘noise,’ especially related to tariffs, could create short-term upside pressure,” the firm advised.
The market is currently in a “wait-and-see” state regarding IP stocks. If policies are more favorable than expected, IP stocks could be re-evaluated. Conversely, a worse scenario would put pressure on profit margins and delay new capital inflows.
According to VNDirect, from the low point in April 2025 until now, this group has only increased by an average of about 14%, significantly lower than the VN-Index, reflecting continued investor caution towards stocks directly affected by tariff risks.
Regarding the IP sector’s outlook, the wave of IP approvals continued into 2025. In Q1 2025 alone, 13 new IP projects were granted investment licenses with a total area of 3,951 hectares – almost equaling the entire year of 2023.
These projects are concentrated in Bac Giang, Thai Nguyen, Binh Phuoc, and Ba Ria – Vung Tau, indicating a very abundant future supply.
However, activity slowed in April due to concerns related to US tariffs. Nevertheless, the approval momentum quickly recovered in May, with an additional 12 projects being approved. As of now, 2025 has seen 25 new IP projects, totaling 7,692 hectares.
Reportedly, the profits of IP businesses in Q1 2025 were stable, but the full-year target remains a challenge.
This quarter recorded impressive growth momentum from major IP development companies compared to the same period last year.
For instance, BCM, SZC, and others announced strong revenue growth driven by land leasing activities, with increases of 127.5% and 93.8% respectively.
Gamuda Land Proposes Metro Link Between Ho Chi Minh City and Long Thanh Airport
The Malaysian conglomerate, which has been present in Vietnam for nearly 20 years, has proposed investing in a metro line to connect with Vietnam’s largest mega-airport.
Specifically, Gamuda Land proposes to participate in the construction of the Thu Thiem – Long Thanh Airport metro line, spanning 41.83 km with an additional 4.4 km access road, operating at a speed of 120 km/h. This metro line would feature 20 stations, including 16 elevated and 4 underground stations. The total investment capital is estimated at approximately $3.4 billion.
Earlier in mid-May 2025, during a meeting with Chairman of the Ho Chi Minh City People’s Committee Nguyen Van Duoc, Mr. Liew Bing Fooi, Chairman of Gamuda Land JSC, expressed the company’s interest in researching the development of a metro line connecting Ho Chi Minh City with Long Thanh International Airport.
Additionally, the company is also interested in other urban railway lines within Ho Chi Minh City to contribute to enhancing urban transportation capacity and sustainable development.
In Malaysia, Gamuda is a pioneer in developing large-scale, modern metro (MRT) lines across the country.
For example, the Kajang MRT Line, inaugurated in 2017, was the first MRT project Gamuda participated in. Following that, the Putrajaya MRT Line, opened in 2023 with a length of 56.2 km, became an iconic project for being the world’s first to implement Autonomous Tunnel Boring Machine technology – an automated tunnel boring machine integrated with artificial intelligence developed by Gamuda itself.
Beyond MRT systems, Gamuda has also played a key role in electrified railway projects, notably the Electrified Double Track Project (EDTP) for the Ipoh – Padang Besar section, which comprehensively upgraded railway transport capacity in northern Malaysia.
More recently, the group continued its mark in Penang by participating in the Penang Mutiara Line (MTL) LRT project, comprising over 20 km of tracks and 19 stations, connecting George Town to the international airport.
In addition to Malaysia, the company has also invested in metro and urban railway systems in Singapore, Taiwan, and Australia.
Da Nang Invites Investors for Nearly $3 Billion Waste-to-Energy Project
The Da Nang Department of Agriculture and Environment has issued a call for interested investors to register for a household solid waste treatment plant project with a capacity of 1,000 tons per day. The project will be implemented at the Khanh Son solid waste treatment complex, under a Public-Private Partnership (PPP) model.
The plant will process waste into electricity, with a power generation capacity of 20MW on an area of nearly 54,000 square meters.
The chosen PPP contract form is expected to be Build-Lease-Transfer (BLT), with a total investment exceeding 2,777 billion VND (approximately $110 million), which the investor and the PPP project enterprise will be responsible for arranging through their equity, without using state capital.
Da Nang City will allocate a budget to pay the investor according to the waste treatment service contract, based on the actual volume of waste and the unit price stipulated in the contract, projected at $19.5 per ton.
The project’s investment implementation period is from now until 2028, after which the investor will operate it for 25 years, not including the time to complete procedures for feasibility study preparation, appraisal, approval, investor selection, and construction.
It is known that the waste-to-energy project with a capacity of 20MW and 1,000 tons of waste per day was approved in principle by Da Nang at the end of 2020. However, the Da Nang authorities later revoked this investment policy due to non-compliance with certain requirements.
Meanwhile, another waste-to-energy plant project at the Khanh Son solid waste treatment complex began construction in early 2025 with a total capital exceeding 2,000 billion VND (approximately $80 million), a capacity of 650 tons of waste per day, and 18MW of electricity. However, this project showed signs of environmental law violations, leading to the prosecution of the construction commander and two subordinates.
Waste-to-energy is one of the energy types encouraged in Power Master Plan VIII, with the advantage of both treating solid waste and utilizing a clean energy source. According to the latest adjusted plan, Vietnam’s total waste-to-energy capacity will reach 1,444 – 2,137 MW by 2030.
Private Enterprises Allowed to Invest in Railway Projects
To encourage organizations and businesses to invest in railway projects through Public-Private Partnerships (PPP) or direct investment, the amended Railway Law stipulates that the State guarantees funding for compensation and resettlement support for these projects. Additionally, the Law clearly defines the State’s management role through the participation of state agencies in controlling steps after the investment policy approval, such as inspecting acceptance work and approving the list of standards applicable to projects, as railway projects are often large-scale, technically advanced, technologically complex, and highly demanding in terms of safety.
Regarding compensation and resettlement support when the State reclaims land, the draft Law stipulates that provincial-level People’s Committees are allowed to decide to separate compensation and resettlement support into independent projects and can directly assign contractors for this work. This is one of the important contents aimed at resolving the “bottleneck” of site clearance, which is the main cause of delayed progress and cost overruns.
Concerning construction contracts, the Government’s report clarifies that to ensure excessive power is not granted to consultants, which could lead to difficulties in controlling costs and prices, the draft Law has been revised to remove the decision-making authority of consultants, limiting the application to only three provisions of the FIDIC model contract conditions instead of the entire set, and adding responsibilities for the investor.
The Minister of Construction further stated that the Government has reviewed and revised the provisions of the draft Law that take effect from July 1, 2025, and those that take effect from January 1, 2026, to ensure the feasibility of the early-effective provisions.
Furthermore, to ensure no disruption to railway activities, especially construction investment activities, the Government has directed a thorough review of cases requiring transitional arrangements for projects whose investment policies were decided before this law took effect, and has provided transitional provisions for system safety assessment.
Industrial Production Expected to Break Through in Late 2025
The main driver of growth comes from the manufacturing and processing industry, which saw an 11.1% increase, contributing 9.1 percentage points to the overall growth and continuing to be the “pillar” of the entire industrial sector. Additionally, the water supply, waste management, and wastewater treatment sector also recorded an impressive 11.3% increase, contributing 0.2 percentage points.
Conversely, the mining sector remains a “bottleneck,” experiencing a 3% decline, which reduced the overall sector’s growth by 0.5 percentage points. Many second-level manufacturing industries showed strong growth: motor vehicle production soared by 31.5%; leather and related products increased by 17.1%; rubber and plastics by 17%; apparel by 15.1%; other transport equipment by 14.1%; non-metallic mineral products by 13.7%; fabricated metals by 11.8%; beds, wardrobes, tables, and chairs by 11.7%; metals by 11%; food processing by 10.8%; and electronic, computer, and optical products by 9.8%.
Key industrial products also experienced widespread “explosions.” Automobiles led with a record 70.2% increase; televisions rose by 21.9%; NPK fertilizers by 18.9%; liquefied petroleum gas (LPG) by 16.9%; regular clothing by 14.9%; cement by 14.8%; leather footwear by 14.3%; steel bars and angles by 13.9%; and sugar by 12.8%.
The growth momentum spread widely, with 62 out of 63 provinces and cities experiencing an increase in their Industrial Production Index (IIP). Notably, Phu Tho led with a 45.5% increase, followed by Nam Dinh (32.6%), Bac Giang (27%), Ha Nam (22%), Vinh Phuc (18.9%), and others. Several other localities such as Thai Binh, Quang Ngai, Thua Thien Hue, Tien Giang, Ben Tre, Long An, Tay Ninh, Hoa Binh, Dak Lak, Quang Ninh, Binh Phuoc, Hai Phong, and Thanh Hoa all recorded increases of over 15%.
According to the General Statistics Office, heading into the second half of 2025, many factors are expected to further boost the growth momentum of Vietnam’s industrial sector. Firstly, from July 1, 2025, Vietnam will transition to a streamlined local government model, reducing intermediate layers, which will help businesses easily access policies and quickly implement production and investment plans.
Concurrently, intensified efforts to combat counterfeit goods will help sanitize the market, protect genuine products, and incentivize businesses to expand production. Additionally, accelerating public investment disbursement and promoting FDI in real estate, supporting industries, etc., will contribute to stimulating construction material manufacturing sectors such as cement, steel, and concrete.
For exports, key manufacturing sectors like electronics, textiles, and footwear continue to hold advantages due to preferential tariff framework agreements with the US. FDI attraction into manufacturing and processing continues to account for the largest share of total foreign investment, with major projects in electronics, computers, and technological equipment. This will be an important push to maintain industrial growth momentum in the coming months.
However, many challenges remain ahead. The mining sector is unlikely to recover in the short term, and fluctuating global energy prices continue to drive up production costs. Furthermore, trade policies and tariffs from the United States and other major markets could disrupt supply chains, affecting business competitiveness.
Another pressure point is the transition to green, clean production and technology application, which requires significant capital and is not easily achievable for many small and medium-sized enterprises.
The General Statistics Office believes that with a solid foundation from the first six months, Vietnam’s industrial production can fully expect to break through in the second half of 2025. However, to achieve this, businesses need to continue adapting flexibly, increasing productivity, promoting technological innovation, and improving domestic supply chains.
From a policy perspective, it is essential to continue creating favorable conditions regarding the legal framework, credit resources, supporting digital transformation, and developing supporting industries. Industrial production will continue to be one of the important “locomotives” of the economy. If growth drivers are effectively utilized and risks are well-managed, the industrial sector can certainly provide a solid foundation for the 8% GDP growth target in 2025.
EVN Secures Non-Government Guaranteed Loan for Power Projects
Vietnam Electricity (EVN) has signed a $65 million loan agreement with KfW, the German Reconstruction Bank, to fund the expansion project of the Tri An Hydropower Plant. This marks the first time KfW has provided a direct loan to EVN without a government guarantee. The Tri An Hydropower Plant expansion, with EVN as the investor, is the final dam/hydropower plant in the cascade system on the Dong Nai River before it flows through Ho Chi Minh City.
With a capacity of 200MW, operating in parallel with the existing Tri An hydropower plant, the project aims to ensure a stable and cost-effective electricity supply while being environmentally and socially friendly.
Currently, EVN is considered one of KfW’s most important partners, and KfW is one of Germany’s leading banks. In the power sector alone, since 2009, KfW has signed nine ODA and non-refundable grant agreements with EVN, totaling 891.5 million EUR, with six projects already completed and disbursed.
KfW has committed approximately 800 million EUR in ODA, preferential loans, and non-government guaranteed loans for new projects by EVN and its member corporations in the coming period. With a total investment of over 3,900 billion VND, the Tri An hydropower expansion is expected to commence main construction in June this year, with turbine unit 1 becoming operational in Q3 2027 and the entire project completed by Q4 of the same year.
EVN stated that the project will increase capacity mobilization for the southern region’s load, especially during peak hours, contributing to improving the power system’s operational regime. The Tri An hydropower expansion is one of eight key energy sector projects that Deputy Prime Minister Bui Thanh Son recently urged to proactively resolve difficulties, accelerate construction, and ensure timely completion.
At the same time, there will be criticism and disciplinary measures for projects that fall behind schedule, impacting electricity supply for socio-economic development and national energy security. KfW is one of EVN’s traditional partners, alongside JICA, JBIC, and AFD, for loan financing.
EVN has, in fact, admitted difficulties in arranging capital for its power projects, stemming from procedures for approving capital mobilization plans and regulations on credit limits. For instance, EVN’s total investment capital demand for the 2021-2025 period is approximately 600,000 billion VND, an 11% increase compared to the 2016-2020 period.
During this period, EVN will commence 10 power generation projects with a total capacity of 8,240MW and complete and put into operation 338 grid projects with a total length of approximately 17,000km. However, EVN’s leadership stated that investment and construction activities for power projects face numerous difficulties in the capital mobilization process. Meanwhile, EVN is only allowed to directly borrow foreign capital through self-borrowing and self-repayment methods for projects not exceeding the Group B project level (stipulated in Decree No. 10/2017/ND-CP). However, the total investment of most of EVN’s power generation projects exceeds the Group B project level, making it very difficult for EVN to arrange foreign loans through the self-borrowing and self-repayment method.
Ho Chi Minh City Reports to Prime Minister on $2 Billion Super Data Center Project
The HCMC People’s Committee has submitted a report to the Prime Minister regarding a proposed $2 billion Hyperscale Data Center project. The committee has also requested a meeting between the Prime Minister and the investor group to present detailed challenges and propose solutions. Specifically, to effectively implement the “four pillars” of Politburo resolutions and Prime Minister’s decisions, the HCMC People’s Committee is actively attracting investment into high-tech projects, prioritizing core technologies to build the city into a leading business and technology innovation hub in Asia.
The HCMC People’s Committee has received an investment proposal for a roughly $2 billion Hyperscale Data Center project from a consortium of investors including G42 (whose main shareholder is the UAE’s sovereign wealth fund), Microsoft (US), FPT, VinaCapital, and Viet Thai.
This project aims to provide comprehensive AI solutions and advanced infrastructure for cloud service customers in Asia and globally. Designed as an “AI Factory,” this project holds strategic significance, with the potential for widespread impact on HCMC’s socio-economic development, contributing to GDP growth, attracting foreign investment, creating thousands of high-quality jobs, and developing IT human resources for the city.
Since its establishment in 2018 in Abu Dhabi (UAE), G42 has expanded its global footprint in AI solutions and cloud computing infrastructure. G42 currently operates 24 data centers with a capacity of 204 MW, is a preferred partner of Microsoft, and aims to reach 500 MW in 6 countries by 2029. In Vietnam, G42 plans to implement AI through models such as Cloud Dividend to quantify revenue growth and job creation, enhance labor skills, improve public services, and quality of life.
