VIETNAM SOLAR POWER - THE FIRST OFFICIAL PPA – VIETNAM INVESTMENT REVIEW INTERVIEWING DR. OLIVER MASSMANN

1. VIETNAM SOLAR POWER - THE FIRST OFFICIAL PPA – VIETNAM
INVESTMENT REVIEW INTERVIEWING DR. OLIVER MASSMANN
1. Could you point out for me the good point of this solar PPA?
While the previous draft solar PPA does not require the Feed-in-Tariff (FiT) conversion between
USD and VND be according to the exchange rate at the time of payment, this newly issued solar
PPA repeats the language in Decision No. 11/2017/QD-TTg (Decision 11) that the FiT will be
adjusted according to the fluctuation in the VND/USD exchange rate. This is consistent with
what is stipulated in Decision 11.
In addition, I note that while the FiT for power output from on-grid projects is adjusted
according to the fluctuation in the VND/USD exchange rate, meaning at any time during the
year, it is not the same for rooftop projects. Instead, the mentioned FiT for excessive power
output generated from rooftop projects remains the same throughout the first year of operation,
and the new FiT for the next year will be adjusted based on the announced VND/ USD exchange
rate of the last working day of the previous year.
2. Are there any concerns of investors that the solar PPA has not solved?
The rights of the investors are not fully protected in the following cases:
- when EVN is in the process of installing equipment, or making repairs, replacement, inspection
or examination of the grid connection of the seller's power plant;
- when the transmission grid or the distribution grid connected to EVN’s grid has a problem or
grid equipment directly connected to EVN's transmission grid or the distribution grid has a
problem; and
- when EVN’s grid needs support to recover after the incident in accordance with the provisions
of operation of the national power system and the standards, technical regulations of the electric
industry.
- allocation of feeding points into the grid
It is quite risky for the producer if the output is ready to be fed to the grid but the connection is not
available to do so. Absent a clear indication of whether the Solar PPA is a ‘take or pay” agreement,
investors will find it difficult to secure and ensure the profits and revenue of their projects.
 No international arbitration dispute resolution clause
 No Government guarantee to enhance the credit of EVN as the sole off-taker;
 No provision addressing the risks of changes in applicable laws; and
 The Solar PPA is required to follow a specific template, which is not bankable.

2. 3. Is this PPA solar bankable or not?
This PPA is not bankable due to reasons specified in 2).
4. In your opinion, how Vietnam government should do in order to reach their target
for solar power capacity in the coming to time?
There is an increasing interest of foreign investors in the sector, proven by the fact that there are
many solar projects with total capacity of 10,000 MW registered with the MOIT. However, not
many of them have submitted the pre-feasibility study to the MOIT for consideration. There are
many reasons behind this, but the most important ones are the lack of Government guarantee of
EVN’s payment obligation in the PPA and currency hedging. Thus, the Government should
consider a mechanism where EVN has to fulfil its payment obligation and the investors are
ensured that they will be able to remit their profits abroad in foreign currency.
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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if
you have any questions or want to know more details on the above. Dr. Oliver Massmann is the
General Director of Duane Morris Vietnam LLC.
Thank you!