Southeast Asian energy and climate organizations have issued a stark warning to international financial institutions over the severe financial, environmental, and climate risks surrounding Vietnam’s planned liquefied natural gas (LNG) expansion, stressing that the country’s LNG pipeline has become increasingly unbankable and mired in prolonged delays.
Of the 22.5 gigawatts (GW) of planned LNG capacity under Vietnam’s Power Development Plan 8 (PDP8), only two projects are currently operational, representing just 1.62 GW. The overwhelming majority of proposed LNG projects remain stalled as developers struggle to secure bankable power purchase agreements (PPAs), exposing the sector’s growing financial instability amid volatile global fuel prices.
“The delays in LNG projects we are witnessing are not minor speed bumps—they are clear indicators of a volatile, broken energy model,” said Gerry Arances, Executive Director of the Center for Energy, Ecology, and Development (CEED).
“Financiers must confront this reality and withdraw from these unbankable gas and LNG projects now before they become stranded assets,” continued Arances.
Several LNG developments have repeatedly pushed back their construction timelines due to financing and contractual challenges.
The 3,000 MW Long An LNG project, despite being backed by major South Korean institutions including GS Energy, the Export-Import Bank of Korea (KEXIM), and the Korea Development Bank (KDB), continues to face significant delays after failing to secure a long-term electricity offtake agreement.
Meanwhile, the Son My LNG project, previously reported to have received support from the U.S. International Development Finance Corporation (DFC), was confirmed through an official inquiry by Energy Shift Southeast Asia to be absent from the DFC’s active project portfolio, with no records found in either its public or internal systems.
Energy Shift Southeast Asia said these developments underscore the growing financial risks facing LNG investments across Southeast Asia and should serve as a warning to banks, export credit agencies, insurers, and development finance institutions considering further exposure to gas and LNG.
“As the world accelerates its transition away from fossil fuels, Southeast Asia is urging global financiers to withdraw from Vietnam’s failing LNG pipeline,” said Anj Dacanay, Lead Campaigner of Energy Shift Southeast Asia. “Investing heavily in gas and LNG undermines Vietnam’s remarkable progress in renewable energy. Rather than locking the country into decades of fossil fuel dependence, international financiers should align their investments with renewable energy systems that are cleaner, more resilient, and increasingly more affordable.”
Vietnam has emerged as one of Southeast Asia’s fastest-growing renewable energy markets. Renewable energy now contributes approximately 44 percent of the country’s electricity generation, demonstrating that the country is well-positioned to strengthen its role as a regional clean energy leader without relying on volatile imported LNG.
The groups emphasized that continuing to finance LNG infrastructure risks creating stranded assets, burdening consumers with higher electricity costs, and delaying the transition toward a secure and sustainable energy future.
“We urge international financial institutions to recognize the clear market signals,” the organizations said. “Vietnam’s energy future lies in renewable energy—not in an increasingly risky and unbankable LNG expansion.”