ThaiCham petitions the Vietnamese Government on renewable electricity FIT prices

The Thai Chamber of Commerce and Industry in Vietnam (ThaiCham) has just sent a letter to Prime Minister Pham Minh Chinh proposing a preferential electricity price mechanism (FIT) and payment obligations under signed Power Purchase Agreements (PPA).

This group of businesses has invested in Vietnam’s renewable energy projects, with a capacity of more than 2,594 MW, with a total capital of about 2.57 billion USD. These projects are among the group of renewable energy plants that will stop paying electricity bills from 2023 due to commercial operations (COD) without acceptance documents. According to a previous report from the Ministry of Industry and Trade, there are 173 factories or parts of grid-connected solar and wind power plants facing this situation. Of these, there are nearly 150 concentrated solar power projects operating on the national power system.

ThaiCham said that in the past two years, businesses sent more than 20 official dispatches to the Ministry of Industry and Trade, Vietnam Electricity Group (EVN) and Electricity Trading Company (EPTC) related to the temporary reduction of FIT electricity price payments. But until now, they have not received a written response or official directive from the operator.

At the most recent meeting between ThaiCham and EVN on November 25, EVN said all reports had been submitted to the Ministry of Industry and Trade and the Government. The problems are waiting for “decision from the competent authority”.

According to ThaiCham, delayed payments expose these investors to serious financial and policy risks. Specifically, factories have their FIT payments reduced by 25-50%. Meanwhile, they also do not have information about the official timeline for receiving full payment under the PPA Contract or handling overdue debts.

“Increased liquidity pressure affects obligations to lenders – many of which are international banks,” the Association informed. In addition, this also causes concern for shareholders, regulators and auditors of companies listed on the stock exchange.

The investors affirmed their compliance with the COD commercial operation date conditions and the terms of the PPA. They believe that this prolonged problem has significantly damaged investor confidence and Vietnam’s attractiveness as a long-term renewable energy investment destination.

They said that the government authority should take a final decision to confirm the implementation of signed Power Purchase Agreements (PPA) and restore FIT payments under the contract.

“Timely removal of problems will ensure fairness, legal transparency and consistency in Vietnam’s investment environment,” ThaiCham stated.

In March, a number of domestic and foreign business associations also petitioned the Government and the Ministry of Industry and Trade on maintaining the stability and consistency of renewable electricity price policies. According to estimates by businesses, this could lead to a loss of nearly 100% of the projects’ equity, equivalent to more than 13 billion USD. They emphasized that unexpected changes in policy will reduce investor confidence, affecting decisions to expand investment in the future.