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Wednesday, 16/06/2021

Key takeaways about investment in renewable energy projects according to Decree 35/2021/ND-CP guiding the implementation of the Law on Public-Private Partnership

Decree 35/2021/ND-CP issued by the Government on 29 March 2021 detailing and guiding the implementation of the Law on Public-Private Partnership 64/2020/QH14 issued by the National Assembly on 18 June 2020 (“Decree 35”). Decree 35 takes effect from 29 March 2021, replacing Decree 63/2018/ND-CP issued by the Government on 4 May 2018 on investment in the form of public-private partnership.

ND CP

Investment in the form of public-private Partnership (“PPP”) for renewable energy projects is regulated under Decree 35 with the following key takeaways:

  • Investment sector. Investing in renewable energy projects falls under investment in electrical grids and/or power plants according to Article 2.2 (a) of Decree 35. However, investors is not permitted to invest in power transmission systems (including transmission lines and substations with voltage levels above 110 kV) because the State holds a monopoly in transmission activities pursuant to Article 4.2 of Law on the Electricity 28/2004/QH11 promulgated by the National Assembly on 3 December 2004 (amended and supplemented on 20 November 2012) and Article 3.34 of Circular 25/2016/TT-BCT issued by the Ministry of Industry and Trade issued on 30 November 2016 regulations on the electricity transmission system (amended and supplemented on 18 November 2019).
  • Investment size. Total investment at least 500 billion VND according to Article 2.2 (b) of Decree 35.
  • Investor selection. Open bidding, or negotiate competitively, or appointment of investors or selection of investors in special cases Article 34 of Decree 35.
  • Bidding for renewable energy projects. Open bidding applied to renewable energy projects under Decree 35 (“PPP Bidding”) is different from auction of independent renewable energy project that do not follow PPP (“IPP Auction”). IPP Auction does not follow Decree 35 and the Law on Public – Private Partnership. Instead, IPP Auction has its own mechanism developed and issued by the Ministry of Industry and Trade. At the moment, the Ministry of Industry and Trade is establishing a mechanism for solar power development to report to the Prime Minister for consideration and promulgation of the Mechanism to encourage the development of solar power in Vietnam.

PECC’s representative also attended the Seminar “Consultation to Draft Decree guiding the implementation of the Law on Public-Private Partnership” held on October 19, 2020 by VCCI, relevants attended and listened to the entire content of the Draft Decree, thereby providing discussion ideas, amendments, and improvements.

Reported by Nguyen Chau Phong/Nguyen Tuan Phat (Legal Department PECC3)

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