New Circular On Development Of Rooftop Solar Power Projects In Vietnam.
Legal News & Analysis - Asia Pacific - Vietnam - Energy & Project Finance
6 April, 2019
On 11 March 2019 the Ministry of Industry and Trade (MOIT) issued Circular No. 05/2019/TT-BCT (Circular 05) to amend some articles of Circular No. 16/2017/TT-BCT, dated 12 September 2017, of the MOIT providing for the development and model power purchase agreement (PPA) of solar power projects in Vietnam (Circular 16). Circular 05 will come into effect as from 25 April 2019.
The most remarkable point provided in Circular 05 is the guidance on the price for purchasing and selling electricity with respect to rooftop solar power projects. In particular:
Prior to 1 January 2018, the purchasing price of electricity (VAT exclusive) shall be VND2,086/kWh (equivalent to U.S.cents9.35/kWh, according to the central exchange rate of VND over USD quoted by the State Bank of Vietnam on 10 April 2017, which is VND22,316/USD).
As from 1 January 2018, the above-mentioned purchasing price shall be adjusted according to the central exchange rate of VND over USD quoted by the State Bank of Vietnam on the last working day of the previous year.
In addition, Circular 05 has amended and supplemented some articles of the model PPA for rooftop solar power projects. The new amended version of the model PPA for rooftop solar power projects now includes the following provisions:
(i) Electricity for sale;
(ii) Price of purchasing and selling electricity;
(iii) Confirmation on meter readings, power on grid and billing;
(v) Rights and obligations of the parties;
(vi) Other agreements; and
(vii) Implementation provisions.
In accordance with the revised version of the model PPA for rooftop solar power projects, the electricity payment for purchasing electricity shall be made within 07 (seven) working days after (i) the parties agree on meter readings, power on grid and billing figures and (ii) the seller submits the relevant payment documents to the purchaser. Otherwise, the purchaser shall be subject to late payment interests which are equivalent to the average interest of inter-banking for 1 month term.
The PPA for rooftop solar power projects will become effective as from its execution date, and will be valid for 20 years as from the signing date (unless the term of PPA is extended or the PPA is terminated prior its term).
For further information, please contact:
Mark Fraser, CEO/ Managing Partner, Frasers Law Company