CHAIRMAN'S INSIGHTS

Good news for Solar Power Investors

There is currently a lot of interest in renewables, in Vietnam, and in particular Solar energy projects. There have been over 70 licenses issued recently for solar energy projects and many of these are in Ninh Thuan Province, where there are over 140 projects licensed.[1]. The interest has been generated by the Feed in tariff incentive granted by the Vietnamese Government approved some time ago setting a tariff of US$ 9.35 cents per KWH for those projects operational by June 2019, with a 20 year term.

This has created many M & A potential deals as Vietnamese investors look to sell their projects or to partner with foreign strategic investors, who can bring both capital and expertise.

As the deadline looms closer it has become clear that the number of projects that will be able to meet the June 30th 2019 deadline, for implementing operations, is going to be a few only at best the Government has issued a document to extend the preferential feed in tariif until December 2020 for those projects in the Province of Ninh Thuan.

However several commentators now expect this extension to be applied to the whole country but there is as yet no evidence to support this and it is not clear according to Baler Mckenzie whether this applies only to the feed in tariff rate or the whole scheme.

What is clear is that the Government seems determined to continue to adopt a pragmatic approach to attracting investment in those sectors where they are targeting investment in line with central policy and also assisting those provinces where renewables are part of the socio economic development plan.



[1] Vietnam Investment Review July 16th 2018

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