On Tuesday, 16 April 2024, EuroCham met with the Deputy Director of the Ministry of Industry and Trade’s Electricity Regulatory Authority of Vietnam (ERAV), Tran Tue Quang, to discuss the government’s latest draft policies for renewable energy projects. The meeting aimed to convey European investors’ concerns and seek clarity on provisions that could impact the bankability and viability of major green energy investments.
EuroCham’s attendees included:
- EuroCham Board Member Stuart Livesey, who also serves as the co-chair of our Green Growth Sector Committee (GGSC)
- EuroCham Board Member Anita Holgersen
- GGSC members including AES, Copenhagen Offshore Partnership, Hogan Lovel, and Nestle, along with representation from the Norwegian Embassy in Vietnam.
During the meeting, several issues were covered:
- Pricing and currency concerns: Seeking clarity on how the transition away from USD-indexed tariffs will ensure predictable revenue streams and mitigate currency-related risks for investors.
- Curtailment risks: Concern over the potential for unregulated curtailment of energy production, which could jeopardize the financial sustainability of projects.
- Dispute resolution: Uncertainty regarding the requirement to use Vietnamese law for disputes between developers and the state-owned offtaker, Vietnam Electricity (EVN).
- Governing law ambiguity: Potential inconsistencies in how Vietnamese law interprets international investment standards. This could create risks for managing and investing in multi-billion dollar projects.
- Legislative changes and investment risks: Seeking greater predictability and transparency in the legislative process to ensure long-term stability in project costs, tariffs, and investor return expectations.
- Termination payment uncertainty: Collaborating with stakeholders to establish transparent and equitable compensation guidelines in the event of project termination, offering greater security for investors.
- Challenges specific to offshore wind projects: Advocating for a pricing structure that recognizes the unique capital requirements and financing complexities of offshore wind projects, promoting investment in this vital renewable energy sector.
EuroCham remains firmly committed to representing our members’ interests in the development of Vietnam’s renewable energy sector. We appreciate the open dialogue initiated with the ERAV and we stand ready to engage further with policymakers on the crucial topics raised in this meeting.
