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Vietnam Infrastructure Spotlight - September 2020

Freshfields' Vietnam Infrastructure Spotlight keeps you up-to-date with the key business and legal developments in this sector. Please contact us if you would also like to receive either our Vietnam M&A Spotlight or our Vietnam Competition Law Spotlight.


New model PPA for solar power projects

On 17 July 2020, The Ministry of Industry and Trade (MoIT) issued Circular 18/2020/TT-BCT (Circular 18). It contains a new model power purchase agreements (PPA) applicable to ground-mounted and rooftop solar power projects. It contains few changes in respect of risk allocation, which were considered by sponsors and international lenders as material hurdles to international project financing.  In particular,

  • no take-or-pay provisions;
  • Electricity of Vietnam (EVN) is permitted to stop taking energy output anytime the grid encounters operational issues or is under maintenance;
  • no agreed termination payment, resulting in the project company having to assume the burden of proof to prove damages when it comes to disputes on EVN’s failure to pay;
  • no change-in-law protection; and
  • dispute resolution continues to go through MoIT before being heard in a Vietnamese court, unless EVN agrees to arbitration.



  • Long-stop. The MoIT held a meeting with the National Assembly Economic Committee on power development. The MoIT requested the National Assembly to issue a new resolution to solve legal issues relating to power development. Source: Hanoi Times
  • Covid’s long reach. The disastrous impacts of the COVID-19 caused commercial electricity output and selling prices to decline, hitting the revenue of many businesses in the industry. Source: Vietnam Plus
  • Hotspot. Ninh Thuan province has proposed to develop another 4,600MW plant using LNG, making up for shelved nuclear energy plans.The original plan to have 4,600MW of nuclear power in the province was abandoned by the National Assembly in November 2016, and the province needs to produce that energy with alternative fuel sources. The Government plans to make Ninh Thuan a renewable and LNG energy hotspot in the country. Source: Vn Express International
  • Very hot spot. Vietnam is seeking a return to nuclear power after 2035 amid warnings that dwindling natural resources could lead to electricity shortages.A draft power plan by the MoIT envisages building nuclear power plants with a capacity of 1,000MW by 2040 and 5,000MW by 2045. Source: Vn Express International


  • Chan May LNG. US-Vietnamese joint venture Chan May LNG has announced plans to invest up to US$6.2 billion in an LNG and power project in Thua Thien Hue province. The project would include 4GW power plant, LNG terminal and storage facilities. The initial phase of 2.4GW is expected to be commissioned in 2024, and the second phase of 1.6GW by 2028.Source: Asian Power

Renewable Energy

  • Blowing in the wind. Bamboo Capital has a portfolio of wind power projects with a capacity of 652MW and plans to build a 300MW plant in Ca Mau this year. Source: Bizhub
  • Go GE. GE Renewable Energy has secured two 30MW contracts to supply wind turbines to the Quoc Vinh Soc Trang and Lac Hoa Soc Trang wind farms located in the Mekong Delta. Source: Vietnam Investment Review
  • Waste. Vantaa Energy, one of the big energy players in Finland, has expressed interest in investing 200-300 million euros in a waste-to-energy plant in the central province of Quang Nam. It is seeking to cooperate with potential domestic partners on the project. Source: The Saigon Times

Oil & Gas

  • Red gold. An oil and gas well Ken Bau-2X has been discovered in Block 114 of the Red River Basin, and is estimatedto contain 9 trillion cubic feet of gas with associated condensates. Eni Vietnam and Essar E&P are the two operators of Block 114 each with 50 per cent. Source:Hanoi Times
  • Bolted horses? The MoIThas proposed to the Government to allow Vietnamese petrol retailers to transfer stakes to foreign investors, but not exceeding 35 per cent. Once its proposal is approved, the petrol and oil trading scene may see more foreign players. Source: Vietnam News
  • Low energy. Japanese giant energy group ENEOS Corporation (formerly JXTG Nippon Oil & Energy) has registered to buy 1 per cent of Vietnam’s largest petroleum distributor Petrolimex. ENEOS is linked with JX Nippon Oil & Energy Vietnam, Petrolimex’s second largest shareholder with 8.73 per cent stake. Source: Hanoi Times


  • Brakes. Major transport projects continue to be delayed as foreign experts are unable to fly to Vietnam because of the COVID-19 pandemic. Source: Vn Express International


  • North-South Expressway. The Ministry of Transport (MoT) said it prefers investors who are financially capable, have experience and tap the lowest amount of State funding to execute the North-South Expressway’s component projects under the PPP format.Althoughparticipating investors have already gone through the pre-qualification, the MoT will keep reviewing the qualifications of the investors during further bidding rounds.Source: The Saigon Times
  • HCMC – Long Thanh expressway expansion. The MoT has approved Dong Nai province’s proposal to widen the HCMC-Long Thanh expressway to 10 lanes from the current four in order to ease traffic congestion. The expansion is urgent since the expressway is a key transport route connecting HCMC to the proposed Long Thanh International Airport. Source: Vietnam Plus


  • Covid casualty. National flag carrier Vietnam Airlines is seeking an urgent bailout of VND12 trillion (US$521.7 million) from the government to help it shelter from the global health crisis. Source: Vietnam Investment Review
  • Pre-emptive strike. The Ministry of Planning and Investment (MPI) has asked the Prime Minister to halt plans to open a new airline in Vietnam. MPI has submitted to the Prime Minister the appraisal of investment policy of domestically-invested Kite Air. Kite Air hoped to launch in the second quarter of 2020.Source:Vietnam Plus


  • Seaports. A 10 per cent increase in container handling service charges was proposed and discussed by the Viet Nam Maritime Administration. The goal is to attract investment in seaports and remove the difficulties for seaports and marine transportation companies. Source: Vietnam News


  • LOGOS enters Vietnam with US$350m venture. Australian logistics real estate group LOGOS has announced the establishment of its first Vietnam venture with an unnamed “global institutional investor” for the development of logistics facilities across the key markets of HCMC, Hanoi and Da Nang. Source: The Leader