As per sources familiar with the situation, European manufacturers are considering investing hundreds of millions of dollars in Vietnam to build wind turbine plants as the country prepares to capitalise on its large untapped potential in offshore wind.

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

Three industry sources, who asked not to be identified because the matter was private, identified Vestas, a Danish turbine manufacturer that manufactures blades, generators, and nacelles in China, as one of the potential investors. Vestas did not respond.

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

The government has set ambitious targets for the offshore wind sector in draught plans but has struggled for years to approve them, with more delays expected and no offshore wind projects currently operational.

However, diplomats, officials, and executives said that the case for manufacturers to locate in Vietnam was compelling due to the country's industrial strength and proximity to advanced offshore wind markets in East Asia.

"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.

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