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In brief

On 11 January 2022, the Office of Government of Vietnam (OOG) issued Document No. 229/VPCP-CN to the Ministry of Industry and Trade of Vietnam (MOIT) for the next steps of updating the draft regulations on the implementation of the pilot program on the direct power purchase agreement (DPPA) mechanism between renewable energy power generation companies and major power consumers. Accordingly, the deputy prime minister in charge of the power sector formally agreed to assign the MOIT to develop a new draft DPPA pilot regulation in the form of a Prime Minister decision, ensuring the transparency, efficiency, lawfulness and sustainable development of the power sector.

Previously, the MOIT submitted its Report No. 94/BC-BCT dated 29 October 2021 proposing a new draft legal document regarding the implementation of the DPPA pilot program in the form of a Prime Minister Decision. Respective initial comments and opinions for that purpose have also been obtained from the relevant ministries (including the Ministry of Finance, the Ministry of Planning and Investment and the Ministry of Justice) during November – December 2021.

Compared to the previous draft (in the form of an MOIT circular), this new draft in the form of a Prime Minister decision made significant changes to the tariff mechanisms and transaction structures. A key new change proposed by the MOIT under its Report No. 94/BC-BCT is that the power consumers will take and buy power from EVN/PC at the retail price (instead of the VWEM spot market price plus DPPA charges as proposed under the previous draft MOIT circular). However, as a next step, the MOIT will need to prepare an updated version of New Draft DPPA Decision and then, probably an implementing Circular of the MOIT to provide more details – which should be subject to public comments and further revisions before finalization.

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Oanh Nguyen is partner in Baker & McKenzie´s Ho Chi Minh City office. She has been advising on various aspects of corporate and commercial law for more than 17 years. She has been rated by Chambers Asia as a leading lawyer in Banking & Finance and Projects, Infrastructure & Energy. IFLR 1000 has listed her as a leading lawyer in the areas of Banking & Project Finance and Mergers and Acquisitions. PLC Which Lawyer? has also recommended her for Finance in Vietnam. Ms. Nguyen serves as editor of the monthly Banking and Finance Letter, and has delivered several presentations on foreign investments and M&A in Vietnam.


Thanh Hai Nguyen is a partner based in Baker McKenzie's Hanoi office. He has been serving as Chair of the Legal Committee of the American Chamber of Commerce in Hanoi (AmCham Hanoi) since April 2017, as well as an active member in the Vietnam Business Forum (VBF)'s Power & Energy Working Group and Investment & Trade Working Group. He is an admitted lawyer in Vietnam and a member of the Hanoi Bar Association.

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