How Vietnam Can Launch A Bankable Solar Power Purchase Agreement

Following the issuance of the Prime Minister's Decision No. 11/2017/QD-TTg ("Decision 11") on the development of solar power in April 2017, which we reported in " Vietnam Goes Green with New Guidance on Solar Power Projects", the Ministry of Industry and Trade ("MOIT") has proposed a draft circular that, once issued, will guide the implementation of Decision 11. The draft circular includes a power purchase agreement (PPA) standard form that, pursuant to Decision 11, will be mandatory for the sale of solar power to the Vietnamese government-owned single purchaser – Electricity of Vietnam (EVN). The draft PPA falls short of expectations since it heavily resembles the one used for wind independent power projects (IPPs), which is generally viewed as appropriate for only very small projects. The viability of the PPA standard form is critical to a well-functioning regulatory framework for the burgeoning Vietnamese solar energy sector. Investors and other stakeholders, such