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ARTICLE · 09 JANUARY 2024

New Rules On Electricity Pricing And Power Purchase Agreements From MOIT

Duane Morris LLP
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On 30 December 2023, the Ministry of Industry and Trade (the "MOIT") issued the draft Circular on the method to determine the electricity generation price and Power Purchase...

VietnamEnergy and Natural Resources
Oliver Massmann
Oliver Massmann
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On 30 December 2023, the Ministry of Industry and Trade (the "MOIT") issued the draft Circular on the method to determine the electricity generation price and Power Purchase Agreements (the "PPAs") to replace Circular No. 57/2020/TT-BCT dated 31 December 2020 (the "Draft Circular"). Overall, the Draft Circular regulates the methods for determining the electricity price and PPAs alongside the procedures for the inspection of PPAs.

In further details, the Draft Circular provides some of the notable provisions as follows:

  • To determine the electricity generation price, the reasonable costs of the investor and an internal rate of return not exceeding 12% must be considered. The electricity price encompasses many elements, including the particular connection bidding price and the PPA price, which are determined and agreed upon using the procedures outlined in the Draft Circular. Also, according to the Draft Circular, fees, and payments such as value-added tax,

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