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Green buildings are gaining momentum in Vietnam, offering significant opportunities for investors. Vietnam has collaborated with the United Nations Development Programme (UNDP) and World Bank to build green cities, and such partnership with foreign entities is likely to continue. Rapid urban population growth in the country could result in energy shortage, decline in natural resources, environmental and social impact, and rise in pollution, creating demand for green buildings.
According to ConsTrack360's Q4 2020 Global Construction Survey, green construction industry in Vietnam is expected to grow by 31.8% to reach VND 97,196.8 billion in 2021. The green construction industry in Vietnam is expected to record a CAGR of 20.7% during 2021-2025. Overall green construction output in the country will increase from VND 97,196.8 billion in 2021 to reach VND 206,325.8 billion by 2025.
Buildings are the largest consumers of energy, holding 35-40% share in final energy consumption, owing to increasing urbanization and expansion of building sector. In 2019, as per Vietnam Green Building Council (VGBC), the number of green buildings touched 150 in the country.
UNDP partners with the Ministry of Construction and the private sector to diminish energy consumption and improve energy efficiency in many high-rise buildings in the country. The MOC and UNDP's Energy Efficiency Improvement in Commercial and High-Rise Residential Buildings in Vietnam (EECB) has launched 75 solutions and deployed them in 17 buildings. The initiative enabled to generate energy savings between 25% to 67%, or a greenhouse emission reduction of 11,547 tCO2.
The Ministry of Construction’s Housing and Real Estate Market Management Bureau (HREM) signed a Memorandum of Understanding (MoU) with German Development Cooperation-GIZ Vietnam for joint development of the Vietnam Green Housing Programme (VGHP) under the implementation Programme for Energy Efficiency in Buildings (PEEB). The MoU aims to improve energy efficiency and reduce GHG emissions in the affordable housing market.
Moreover, by 2030 the Vietnamese Government intends to reduce greenhouse gas emissions by 9% compared to business as usual and further up to 27% with international support based on updated Nationally Determined Contribution (NDC). The construction sector has enacted various policies to facilitate the construction of green buildings.
ConsTrack360 expects that government initiatives such as the Vietnam Energy Efficiency Programme (2019-2030); Revised Law on Construction (2020); and construction materials development strategy of Vietnam (2021 – 2030), with a vision to 2050, is expected to attract more investment in the green building market in Vietnam.
