Circular 16/2023/TT-BCT: To guide power purchase agreement serving domestic purposes in Vietnam?
Circular 16/2023/TT-BCT: To guide power purchase agreement serving domestic purposes in Vietnam?
On August 31, 2023, the Minister of Industry and Trade of Vietnam issued Circular 16/2023/TT-BCT on guiding power purchase agreement serving domestic purposes.
Accordingly, Circular 16/2023/TT-BCT guides power purchase agreement (hereinafter referred to as “PPA”) serving domestic purposes and promulgates sample domestic PPA according to the form and application with the following objects:
- Electricity retailers (hereinafter referred to as “the Seller”).
- Customers using electricity for domestic purposes (hereinafter referred to as “the Buyer”).
- Other agencies, organizations, and individuals.
Circular 16/2023/TT-BCT: To guide power purchase agreement serving domestic purposes in Vietnam? (Image from the Internet)
What is the format of domestic PPA in Vietnam stipulated in Circular 16/2023/TT-BCT?
Pursuant to Article 3 of Circular 16/2023/TT-BCT regulating the format of domestic PPA as follows:
Format of domestic PPA
1. Domestic PPA shall come in physical form (2 copies of the agreement shall be produced one of which shall be held by each party) or electronic form (which the Buyer can look up and download from website of the Seller). The agreement shall be written in the Vietnamese language.
The parties may negotiate about using other ethnic dialects of Vietnam or foreign languages. In case of discrepancies between a version written in the Vietnamese language and a version written in an ethnic dialect of Vietnam or a foreign language, whichever version is more beneficial to the users shall prevail.
2. Domestic PPAs shall be compliant with form under Appendix attached hereto.
Accordingly, domestic PPA shall come in physical form, including 2 copies of the agreement, one of which shall be held by each party.
The agreement shall be written in the Vietnamese language. However, if there is a need, the parties may negotiate about using other ethnic dialects of Vietnam or foreign languages.
In case of discrepancies between a version written in the Vietnamese language and a version written in an ethnic dialect of Vietnam or a foreign language, whichever version is more beneficial to the users shall prevail.
At the same time, based on Article 5 of Circular 16/2023/TT-BCT regulating the effective period of domestic PPA as follows:
Effective period of domestic PPA
Effective period of PPAs shall be agreed upon by the parties. Effective period of PPAs shall start from the date of signing to the date of expiry as per the law unless otherwise agreed upon in detail by the parties.
Accordingly, the effective period of domestic PPA will be agreed upon by the parties.
In case the two parties do not specifically agree on the term of the contract, the effective period of PPAs shall start from the date of signing to the date of expiry as per the law.
What are the regulations on signers of domestic PPA in Vietnam?
Pursuant to Article 4 of Circular 16/2023/TT-BCT regulating signers of domestic PPA as follows:
- Signers of the Buyer shall be representatives of the Buyer satisfying conditions under Clause 1 Article 8 of Decree 104/2022/ND-CP dated December 21, 2022 of the Government and submitting application for purchase of domestic electricity in accordance with Clause 2 Article 8 of Decree 104/2022/ND-CP to the Seller.
- If the Buyer consists of multiple households sharing electricity under 1 agreement, signers shall be representatives of these households who are authorized by the households in writing.
Sharing households shall satisfy conditions under Clause 1 Article 8 of Decree 104/2022/ND-CP.
The PPA shall specify number of sharing households (with attached lists) and applicable electrify price according to regulations promulgated by the Ministry of Industry and Trade.
- If the Buyer is a tenant, signers of the Buyer shall be identified in accordance with regulations on electricity retail price promulgated by the Ministry of Industry and Trade.
- Signers of the Seller shall be legal representatives or individuals authorized by the Seller and in possession of distribution grids capable of supplying electricity in a manner that fulfills demand of the Buyer.
*Note: The Circular 16/2023/TT-BCT comes into force from October 16, 2023
Agreements signed before the effective date hereof shall continue to apply until expiration. The parties shall still adhere to the Law on Electricity and guiding documents and may make additional arrangements appropriate to sample agreement under Appendix attached hereto. If either party or both parties wish to renew the agreement before expiration, both parties shall consider and negotiate on the renewal. If this is the case, the renewal of agreement shall conform to Circular 16/2023/TT-BCT.
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