As you may know, in late March 2021, the very first draft of the Prime Minister’s Decision on the Approval of National Power Development Planning VIII (PDP8) (“Draft”) has been published through unofficial sources (i.e. not through MOIT’s website). Such Draft was planned to be signed off at the end of March during the last days of Prime Minister Nguyen Xuan Phuc’s administration, but it was delayed as the hand-over to new administration was already under way. It appeared that the investors and LNG-to-power projects in this Draft were scaled down comparing to those in the PDP8 proposal published by Ministry of Industry and Trade (MOIT) earlier.
On 23 April 2021, the Deputy Prime Minister (DPM) Le Van Thanh directed a Government’s meeting on the PDP8 and concluded that, among others, PDP8 must be (i) updated with qualifications for prioritized projects, and (ii) revised to reasonably review and allocate development of power sources, especially LNG-to-power projects in PDP8 in order to ensure the competition, optimization on development of power system. DPM asked the MOIT to careful review and digest opinion from EVN in its official letter No. 1645/EVN-KH dated 2 April 2021. Finally, the DPM required the MOIT to submit the updated PDP8 proposal prior to 15 June 2021.
Unfortunately, due to Covid-19 situation and heavy workload on updating the PDP8 proposal, MOIT failed to submit a revised proposal to the Government for consideration. On 17 June 2021, the MOIT Minister arranged a press meeting to update the PDP8 progress and planned to submit the revised PDP8 proposal to the Government within June 2021.
So far, it is not crystal clear whether the MOIT has finished the revised PDP8 proposal. However, on 2 July 2021, an article from Bloomberg naming “The U.S. Risks Losing Out From Its Own Trade Push in Vietnam” pointed out that Vietnam may not want to support LNG-to-power projects from USA investors as the need to reduce trade deficit with USA is phasing out due to change of strategic approaches from the President Biden’s administration. This article also questioned about the feasibility of all LNG-to-power projects proposed by USA investors so far: “The IEEFA has raised questions about the feasibility of at least seven of the proposed projects. Several of them had appeared on the nation’s previous power plan of nine proposals, or on the draft of a new plan that expanded to more than 40 projects by February. The plan, which was supposed to have been approved in early April, was kicked back to the trade ministry by Deputy Premier Le Van Thanh for reconsideration and whittling down to the most viable.” This might be a signal from the MOIT that the LNG-to-power projects in the final PDP8 would have been scaled down and restructured to greenlight only projects with strong support from USA government and clear financial capability.
Pending the draft PDP8’s finalization, we advise that the investors follow-up and coordinate with MOIT and their local partners/ consultants on the process/ progress for inclusion of LNG projects into the future PDP8. We could assist you to review and identify the application, documents and licensing process issues and advise to facilitate the process including meeting and negotiating with relevant stakeholders.
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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.