CaliToday (09/12/2025): In a significant blow to Vietnam’s long-term energy security strategy, Japan has officially confirmed its withdrawal from the multi-billion dollar Ninh Thuan 2 nuclear power plant project.
Japanese Ambassador to Vietnam, Naoki Ito, told Reuters that the decision was driven by an unfeasible construction timeline proposed by Hanoi, signaling a complex shift in the relationship between the two strategic partners.
The "Impossible" Deadline
The Ninh Thuan 2 project, designed to generate between 2 to 3.2 gigawatts (GW) of power, was a cornerstone of Vietnam’s plan to secure a stable energy future by 2035. Along with the Russian-backed Ninh Thuan 1, these plants were intended to provide the critical baseload power needed for Vietnam's booming manufacturing sector.
However, Ambassador Ito was blunt regarding the logistics:
"The Japanese side is no longer in a position to implement the Ninh Thuan 2 project."
The project’s history is turbulent. Originally conceived in the early 2010s, plans were shelved in 2016 due to safety concerns post-Fukushima and budgetary constraints. When Vietnam reactivated its nuclear program last year, it invited both Japan and Russia to resume their roles.
According to Ambassador Ito, following high-level meetings in November, Tokyo concluded that the completion targets set by the Vietnamese government were simply "too rushed" to ensure safety and feasibility, leading to the formal withdrawal.
A Relationship Under Strain?
The cancellation comes against a backdrop of uncharacteristic friction between Tokyo and Hanoi.
Beyond the energy sector, tensions are simmering regarding Vietnam's environmental policies. Hanoi’s proposed ban on gasoline-powered motorbikes in the city center has drawn sharp criticism from Japanese manufacturers, particularly Honda, which dominates the Vietnamese transport market.
The Japanese Embassy sent a formal diplomatic note to Vietnamese authorities in September regarding the ban but has yet to receive an official response. While Ambassador Ito diplomatically suggested that "the Vietnamese side may want to continue exchanging views," the silence highlights a rare disconnect in a usually tight bilateral relationship.
The Vacuum: New Players Enter the Ring
Japan's exit from the large-scale reactor project leaves a vacuum that other global powers are eager to fill.
While the Russian-led Ninh Thuan 1 project has yet to sign a formal binding agreement, other nations are circling. Sources inside and outside Vietnam indicate strong interest from France, South Korea, and the United States.
South Korea is aggressively exporting its nuclear technology.
The U.S. is looking to counter Russian and Chinese influence in the region’s infrastructure.
France (via EDF) has a long history of nuclear expertise.
Future Outlook: The Pivot to SMRs
Despite withdrawing from the gigawatt-class Ninh Thuan 2, Japan is not abandoning Vietnam's energy sector entirely. Ambassador Ito emphasized that Tokyo remains open to supporting Vietnam in future phases, specifically through Small Modular Reactors (SMRs).
SMRs represent the next generation of nuclear technology cheaper, safer, and faster to build than traditional plants. This pivot suggests that while Japan is walking away from the "legacy" project, it aims to position itself as the partner for Vietnam's future grid modernization.
Current Status: Both the Ministry of Industry and Trade and PetroVietnam (the domestic partner for Ninh Thuan 2) declined to comment. As Vietnam faces looming power shortages, the race to find a partner who can meet both the technical demands and the aggressive timeline is now wide open.