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EU manufacturers eye offshore wind turbine plants in Vietnam -sources

Power-generating windmill turbines are pictured at a wind park in Bac Lieu province

By Francesco Guarascio

HANOI (Reuters) - European manufacturers are considering investing hundreds of millions of dollars in Vietnam to build wind turbines plants, sources familiar with the situation said, as the country gears up to exploit its large untapped potential in offshore wind.

The Southeast Asian country is seen as a potential major player in the sector because of its strong winds in shallow waters near coastal, densely populated areas, according to the World Bank Group.

Three industry sources, who declined to be named because the matter was confidential, named Danish turbine maker Vestas, which produces blades, generators and nacelles in China, as one of the potential investors. Vestas declined to comment.

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The companies were looking for sites near ports but talks with local authorities and industrial parks were still preliminary, as investors were waiting for the country to approve clear rules on offshore wind farms, the sources said.

The government has set ambitious targets in draft plans for the offshore wind sector but has struggled for years to approve them, with more delays seen as likely, and no offshore wind projects currently in operation.

But the case for manufacturers to locate in Vietnam was strong because of its industrial strength and proximity to advanced offshore wind markets in East Asia, diplomats, officials and executives said.

"We expect important investments to be decided this year by major global players in the offshore wind sector for the manufacturing of wind turbine components and Vietnam stands a good chance to welcome these," said Bruno Jaspaert, director of DeepC, an industrial zone in northern Vietnam.

Erik Kjaer of the Danish Energy Agency, also said on the sidelines of a wind conference in Hanoi on Thursday: "It would make sense to invest because of the country's strong steel output" which is key to making turbines, while noting competition from China and Taiwan.

(Reporting by Francesco Guarascio @fraguarascio; Editing by Ed Davies)