Vietnam is attracting a growing pipeline of data-centre investment as global operators seek alternatives to more constrained markets such as Singapore and Malaysia, but disputes over electricity tariffs, grid capacity and land tenure are complicating efforts to turn planned projects into operating facilities.
Viettel and CMC, two of Vietnam’s largest technology groups, are in an ongoing dispute with the Ho Chi Minh City unit of state utility Vietnam Electricity over electricity tariffs applied to their data centres. The dispute has highlighted differences over how pricing rules are interpreted and applied.
In February, Viettel and CMC joined VNPT, FPT and VNG in warning that a shift from production to higher commercial electricity tariffs had increased power costs by more than 50 per cent at some facilities. Electricity is typically the largest component of data-centre operating expenses.
About six months later, Singapore-based STTGDC, formerly ST Telemedia Global Data Centres and recently acquired by a KKR-Singtel consortium, announced that it would withdraw from a planned 60 megawatt (MW) data centre in Ho Chi Minh City and sell its 65 per cent stake to joint-venture partner VNG.
The project, unveiled in 2024, was planned for a 2.5 hectare site 1.5 km from the companies’ existing 9.6 MW data centre. STTGDC said the site no longer met its investment and commercial requirements, with the remaining land-use term expiring in 2041 considered unsuitable for the long-term operation of a hyperscale facility.
Lionel Yeo, STTGDC’s chief executive for South-east Asia, said Vietnam continued to have strong long-term fundamentals because of digital-economy growth, cloud adoption and demand for artificial intelligence infrastructure. But he said those factors did not make every site investable.
“A viable development also requires sufficient scale and land tenure, strong connectivity, and a clear path to securing power at the capacity, cost and within the timeframe required,” Yeo told The Business Times. He said predictability was critical because data centres were long-life assets requiring multi-decade investment.
The power constraints extend beyond individual projects. In a September 10 report, the Ministry of Industry and Trade warned that Vietnam faced “very serious challenges” from an imbalance between energy supply and demand. It said investment in generation and grid projects remained below the levels required under the national power plan through 2030, with about 45 per cent of generation projects yet to receive investment approval.
The ministry estimated a nationwide capacity shortfall of about 4,300 MW in 2027, rising to about 14,000 MW by 2030. It identified data and AI centres, electric-vehicle charging infrastructure and cooling and heating systems among emerging sources of electricity demand. The ministry recommended minimising the placement of such facilities in major load centres, including Hanoi and Ho Chi Minh City.
Despite the constraints, the pipeline remains substantial. Fitch Solutions research firm BMI estimated in July that Vietnam had about 148 MW of live data-centre capacity, with another 79 MW under construction and 874 MW planned. Domestic operators Viettel, VNPT and FPT remain prominent, while Google, Alibaba, AWS, G42, STTGDC and Sembcorp are exploring or developing capacity.
BMI said realised capacity was likely to lag the headline pipeline because of rising commercial electricity tariffs and grid constraints. Sembcorp Development is pursuing a 4.5 hectare hyperscale and AI-ready campus in Ho Chi Minh City with BB Holdings, planned for up to 90 MW in phases.
BMI nevertheless described Vietnam as a “credible secondary South-east Asian data-centre hub” for 2026 to 2030. At an energy industry conference in Ho Chi Minh City on September 22, Oscar Loza of Constant Energy said there was “definitely a problem in terms of infrastructure and lack of power”, but added: “If somebody wants to start investing in data centres, they should probably look at Vietnam for the future.”
