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Vietnam Infrastructure Spotlight - February 2021

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.


No new rooftop PPAs after 31 December 2020

EVN announced in letter 8420/EVN-KD that it will stop signing rooftop solar PPAs as from 31 December 2020. This development is not unexpected. Decision 13 of the PM provides that the FIT regime applicable to rooftop solar projects will expire on 31 December 2020. 

Developers will now have to wait for further guidance of the government on the next FIT regime for rooftop projects.  It is unlikely that an auction or bidding process will be required to determine the tariff of a rooftop project. However, given output redundancy and grid capacity concerns, one should expect the new FIT regime to be much less favourable. If the redundancy issues become worse, the Government may delay the new FIT regime until a more comprehensive renewable power development policy is formed.

EVN’s purchases from renewable projects in 2021

Since early January 2021, there have been reports of a significant decrease in electricity consumption in Vietnam.  EVN and the National Dispatch Centre (NDC) foresee that the decreasing trend may continue in 2021.  This decrease in demand has been attributed to the detrimental impact on the economy of Covid-19 and on severe storms in the centre of the country in 2020.

While demand has decreased, supply in renewable projects has increased quickly in the last two years.  This has resulted in significant concerns of NDC about redundant generation output and an overloaded grid.  On 12 January 2021, the head of the NDC estimated that in 2021, NDC may need to cut purchases of about 1.3 billion kWh from renewable projects. The reduced purchase would be mainly from renewable and solar projects because

(i)     the fast development of solar projects in some provinces has caused material overload to the grid there;

(ii)    it is not possible to reduce the dispatch from thermal or hydro due to technical issues, so cuts in purchases from solar project are necessary.

Other factors might be involved: wind and solar tariffs are generally higher than those of thermal and hydro projects; it will be more costly for thermal power plants to stop generating than for wind or solar projects to do so; and most thermal projects are now either State-owned or BOT and have more privileges than renewable IPPs.

It is important to stay close with EVN/NDC to monitor the curtailment risks.  For rooftop projects, it is now more important that the projects focus more on direct generation for the roof owners rather than the sale to EVN.



  • Mong Duong 2 project. US-based AES Corporation has signed an agreement to sell its entire equity interest in the 1,242 MW Mong Duong 2 coal-fired power plant in Quang Ninh province to a consortium led by an undisclosed US-based investor. The new investors will own 51 per cent equity interest in Mong Duong 2, while Posco Energy owns 30 per cent and China Investment Corporation owns the remaining 19 per cent. Source: Hanoi Times
  • Song Hau 2 Thermal Power. Malaysia-based Toyo Ventures has entered into an investment and development agreement with Chinese state-owned China Energy Engineering Investment on the2,120 MW Song Hau 2 coal-fired power project in Hau Giang province. Toyo in early January 2021 signed a 25 years BOT contract with MoIT with total investment of US$3.243 billion. Source: The Edge Markets
  • O Mon II project. The Prime Minister has approved the investment planning of the 1,050 MW O Mon II thermal power plant project with preliminary capital of US$1.33 billion. The investor is a joint venture between Vietracimex and Marubeni from Japan. EVN was assigned to check and evaluate the total investment value of the project in order to ensure a reasonable price in the PPA. Source: Vietnam Investment Review

Oil & Gas

  • Nam Con Son 2. PetroVietnam Gas Corporation (PV Gas) has signed a US$65.1 million loan for the second phase of the adjusted Nam Con Son 2 Gas Pipeline Project, and Vietcombank has signed the credit agreement with PV Gas to finance the project. The first phase, laying 151 km of undersea pipeline off the coast of Ba Ria-Vung Tau province was completed in 2015, and the second phase will build pipelines for transporting gas from the Cuu Long and Nam Con Son fields to the mainland. Source: Vietnam Plus


  • Airport PPP. The Civil Aviation Authority of Vietnam (CAAV) has submitted a plan to the Ministry of Transport to mobilise resources for the development of aviation infrastructure, proposing the construction and expansion of six airports across the country under the PPP model.  CAAV suggested applying the same model that was applied to the Van Don International Airport project in Quang Ninh province, in which private investors will construct, manage and operate the airport under the PPP format with BOT contracts. Source: The Saigon Times
  • Soaring airlines. Despite the pandemic, a new airline Vietravel Airlines operated its first commercial flight on 25 January 2021.It is the sixth carrier in the fiercely competitive aviation market after Vietnam Airlines, Vietjet, Jetstar Pacific, Vietnam Air Services Company, and Bamboo Airways. Source: VN Express International and Aerotime
  • Groundbreaking. The construction of Long Thanh International Airport kicked off on 5 January, opening opportunities fordomestic private and international businesses. Theairport would be built in three phases over three decades and is expected to become the country’s largest airport.So far, many have showed strong interest in the project, including names from Sweden like Ericsson and ABB. Source: Vietnam Investment Review


  • Private sector invades seaports. Domestic private player HATECO has proposed investment in container terminals 5 and 6 at Lach Huyen International Gateway Port area. After two weeks of appraisal, MPI reported its findings to the Prime Minister for his consideration and approval. If HATECO officially wins the investment, the group will become the first private company in Vietnam to join the local deep-seaport market, which to date has been dominated by foreign investors or state-controlled seaport operators. Source: Vietnam Investment Review


  • Still difficult - 1. HCMC has been struggling for years to attract foreign investment in key infrastructure projects, with legal challenges and risks discouraging investors.Of 11 key infrastructure projects for which the city had sought to find foreign investors, 10 received no interest.Most of the key infrastructure projects are public transport projects that seek to reduce chronic traffic congestion.Source:Vn Express International
  • Still difficult – 2. With a long-awaited restructuring plan, state-owned railway group Vietnam Railways (VNR) hopes for the go-ahead in 2021 to attract private investment. Source: Vietnam Investment Review
  • Still difficult - 3. The NationalAssembly Standing Committee approved the use of public funds to change two North-South Expressway sub-projects from PPP to public investment. Months after the tendering process began, those two projects have failed to interest bidders. Source: Vietnam News