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Da Nang is weighing whether to participate in the Khanh Son waste-to-energy PPP project as updated figures point to a potential shortfall of roughly 1,000 tonnes of waste per day versus the design capacity. Analysts say the gap could tighten cash flow and create financial risk that may ultimately spill over into the public sector.
At Khanh Son in Da Nang, a waste-to-energy plant owned by Vietnam Environment Joint Stock Company is under development and is expected to begin operations in Q1 2027. The facility is designed to handle 1,100 tonnes per day of municipal and ordinary industrial waste, equivalent to 1,250 tonnes per day if only municipal waste is treated. The project is expected to cover municipal waste for the older Da Nang area.
Meanwhile, a second waste-to-energy project planned under PPP for the area, with capacity of 1,000 tonnes per day, has made little progress. Although Da Nang City People’s Council approved the investment policy by the end of 2020, the project was canceled in June 2025 to redo procedures and prepare for inviting investment from the outset. Nearly a year later, it remains at the invitation stage.
Under the regional master plan (Da Nang–Quang Nam merger), the area includes seven waste processing projects with total capacity of about 3,430–3,580 tonnes per day, including: Khanh Son waste-to-energy incineration at 1,100–1,250 t/d; a Khanh Son PPP waste-to-energy plant at 1,000 t/d; Cam Ha composting at 55 t/d; Bac Quang Nam municipal waste processing at 300 t/d; Hoi An waste processing at 120 t/d; Bac Tra My sorting, recycling and hazardous waste treatment at 55 t/d; and Nam Quang Nam waste processing and power generation at 800 t/d.
Current data indicate total waste generated in the region is about more than 2,052 t/d, corresponding to a population of about 3.06 million. With population growth of around 2% per year and waste generation around 0.67 kg/person/day in recent years, the 2030 household waste projection is about 2,300 t/d. When accounting for tourism growth, urbanization, and improved collection rates, the figure could range between 2,300 and 2,550 t/d.
Based on these figures, there is a risk of a shortfall of about 1,000 t/d to operate the plants under the plan. The article notes that this shortfall is comparable to the scale of the proposed 1,000 t/d PPP waste-to-energy project at Khanh Son that has not yet been implemented.
The issue becomes more significant because the project is expected to proceed via PPP. In PPP arrangements, investors typically borrow capital and contracts often include risk-sharing mechanisms between the State and investors, such as guarantees for minimum waste input or guaranteed revenue.
However, the risk can run in the opposite direction. If actual waste is lower than forecast, the State may be required to share the shortfall risk. In that scenario, the problem would not be limited to an underperforming plant; it could become a financial burden on the public budget for many years.
The article also highlights that if a PPP contract is not designed to contain market risk, the burden could shift to the public sector. Then, waste shortfall would become a government obligation rather than a corporate issue.
Forecast errors have already occurred. In 2020, Da Nang forecast municipal waste would reach about 1,800 t/d by 2025, but actual waste was about 1,200 t/d, a gap of 33%.
In the current context, policies promoting waste separation at source and emissions reduction could mean waste generation does not rise as sharply as high-scenario forecasts. The article states waste could even fall significantly—by up to around 30%—if source separation is effectively implemented.
An environmental expert cited in the article says high-scenario forecasts should be used for long-term planning, but applying them directly to investment decisions carries substantial risk. Repeated forecast errors, the expert warns, could translate into a real waste shortfall.
In addition to financial risks, the location of the Khanh Son project raises planning concerns. The facility sits on an axis toward Ba Na Hills, near central urban and industrial zones with high development value. Khanh Son is being developed into a major urban-tourism axis with commercial, service, and logistics functions, and placing a large-scale waste processing plant there could conflict with the intended development orientation.
If both waste-to-energy plants operate, the area would need to absorb large waste volumes, potentially triggering hundreds of daily truck trips through the city center. This could increase pressure on transport infrastructure, affect the living environment, and harm the urban image—even if technical standards are met.
The project also requires a relatively large land area of about 8–10 hectares, including ancillary facilities, plus electrical, water, and transport infrastructure. With limited land and saline groundwater, building infrastructure running tens of kilometers could raise costs and operational risks.
Given the risk of insufficient waste input, the article frames Da Nang’s decision as a trade-off: either preserve a sustainable urban-tourism development space, or accept Khanh Son as a large-scale waste-processing hub and an adjacent waste-transport corridor through the development core, while facing long-term financial risks.
From an investment efficiency perspective, the article says many voices suggest reconsidering the 1,000 t/d PPP plant. If waste input is not guaranteed, the project could operate below capacity and waste resources, including corporate capital, bank loans, and land.
A more feasible approach proposed in the article is to increase the capacity of existing plants to handle an additional 200–300 t/d. This would save land and improve investment efficiency, particularly in light of ongoing waste-separation policies that could reduce the amount of waste requiring processing in the future.
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