Copenhagen Infrastructure Partners ( CIP ), a Danish fund manager focused on renewable energy, has signed a joint development agreement with state-run energy group Petrovietnam to advance one of Vietnam’s first offshore wind projects, marking a major milestone in the country’s clean energy transition.

The deal comes at a time when Vietnam, an energy-hungry Southeast Asian economy, has yet to put any offshore wind farms into operation. Notably, Danish energy giant Orsted – a global leader in offshore wind – announced in June 2023 that it had “paused market development activities in Vietnam” while saying that the country remains an “important supplier market”.

While CIP did not disclose the name of the project when it announced the agreement with Petrovietnam on August 27, industry sources point to the 3.5-gigawatt La Gan project in the former province of Binh Thuan, now part of Lam Dong province. It is expected to cost about US$10.5 billion. The project site is about three hours’ drive north of Ho Chi Minh City.

Currently in the early development stage and subject to regulatory approvals, the project is one of Vietnam’s first offshore wind initiatives. La Gan would diversify the country’s energy mix, strengthen energy security, and support the development of a local supply chain, while also unlocking long-term economic value.

CIP is developing the project together with Copenhagen Offshore Partners, its exclusive offshore wind development partner.

The latest deal builds on a memorandum of understanding signed by CIP and Petrovietnam in March 2024. “This agreement is a significant step forward in our partnership with Petrovietnam,” says CIP partner Robert Helms. “By combining CIP’s global experience and expertise in offshore wind with Petrovietnam’s proven offshore expertise and deep understanding of the local market, we are well-positioned to deliver one of Vietnam’s first offshore wind projects and to establish the groundwork for future offshore wind projects in Vietnam.”

According to Vietnam’s revised Power Development Plan VIII, offshore wind power capacity serving domestic demand is planned to hit 6,000 megawatts by 2030 and increase to 17,032MW by 2035. By 2050, the figure is projected to reach between 113,503MW and 139,097MW. To date, however, no offshore wind projects have received in-principle approval.

The Vietnamese government and the World Bank estimate Vietnam’s offshore wind potential at around 600 gigawatts. The energy source is expected to supply 12% of the nation’s total electricity output by 2035.