On 21 July 2022, the MOIT has submitted another proposal to Prime Minister in relation to policy applicable for “transitional solar/wind energy projects” which have been implemented/invested but not achieved COD to enjoy FIT. Particularly, the MOIT explained that it already submitted two options/proposals for the solar/wind tariff i.e., (i) direct price negotiation between solar/ wind generators and EVN based on a tariff bracket issued by the MOIT (NB: as proposed in Submission Letter 17 of the MOIT dated 27 Jan 2022) (Option 1) and (ii) price tender whether EVN will (NB: as proposed in the OL1513 of the MOIT dated 24 March 2022) conduct tender for buying powers from solar/wind projects for 3 years in line with a price bracket issued by MOIT (Option 2).
#1: MOIT stated that Option 1 is in line with the Electricity Law and the legal basis for MOIT to issue the price power bracket is crystal clear. Thus, MOIT proposed the PM to accept this option. Meanwhile, MOIT is of the view that Option 2’s legal basis is not very clear and new laws must be promulgated to enforce this AND MOIT has received many negative comments from the investors, especially in relation to the bankability of the project and cash flow.
#2: MOIT proposed that Option 1 should be applicable for all transitional solar/wind power projects. This means EVN will negotiate directly with solar/wind power generators of the power price.
#3: MOIT proposed that Option 1 also should apply to future solar/wind power projects to ensure the integrity/unification of the policy to renewable projects.
#4: MOIT even proposed that in terms of projects having commercially operated, the PM should instruct the MOIT to review all PPAs to ensure the harmonized interests of the State, EVN, investors and consumers.
#5: MOIT proposed the PM to abolish Decision 13 and Decision 39 governing FITs for solar/wind projects.
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.