Viet Nam can generate 2,400MW per year from renewable sources by 2020, or 5 per cent of the total electricity production in the country, experts have said. However, this will need significant start-up capital assistance from the Government, they add.

"The percentage of electricity generated from renewable energy sources will depend on the funds made available from the State budget for this sector," said Le Tuan Phong, deputy director of the Ministry of Industrial and Trade's Energy Department.

Phong, who heads the ministry's renewable energy committee, said the sector would focus on developing small-scale hydropower plants, wind and solar energy, as well as biogas projects.

The ministry had submitted to the Government a master plan for the development of renewable energy, including strategies, incentive policies and regulations to encourage the development of this sector, he said.

Vu Dinh Tuan, CEO of the German-Vietnamese Fuhrlaender Viet Nam Wind Power Joint Stock Company, said the incentive policies for businesses investing in clean energy were not focused or detailed enough, and had been applied differently in various localities.

He said there was high potential for developing wind energy in Viet Nam, "but this sector requires much more capital."

The American True Wind Solution Organization has said that Viet Nam has the highest potential for generating wind energy among Laos, Cambodia and Thailand.

Tuan said the Government should create favourable conditions for the renewable energy to develop, including rapid approval of land grants, pricing policies for alternate energy and permission for different sectors to get involved.

While there are several wind energy projects in the pipeline in the provinces of Binh Dinh, Lam Dong, Ninh Thuan and Binh Thuan, only the last-mentioned has come up with detailed development plans.

The Fuhrlaender Viet Nam Company is planning to build a US$25 million factory for installing wind power turbines, which has already been approved by Binh Thuan authorities.