Format of domestic power purchase agreement in Vietnam

Format of domestic power purchase agreement in Vietnam (Internet image)

On August 31, 2023, the Minister of Industry and Trade of Vietnam issued Circular 16/2023/TT-BCT guiding power purchase agreement serving domestic purposes.

1. Format of domestic power purchase agreement (PPA) in Vietnam

Specifically, Article 3 of Circular 16/2023/TT-BCT stipulates the format of domestic PPA as follows:

- 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.

- Domestic PPAs shall be compliant with form under Appendix attached to Circular 16/2023/TT-BCT.

2. Signers of domestic PPA in Vietnam

Pursuant to Article 14 of Circular 16/2023/TT-BCT, signers of domestic PPA in Vietnam as follows:

- The electricity purchaser must have active legal capacity as per the law, have a request for electricity purchase and residence information of the household where the electricity is purchased or supporting documents of ownership, management and use of place where the electricity is purchased and submitting application for purchase of electricity for daily living of the purchaser in paper or electronic form, containing; Application form for electricity purchase and one of the following documents:

+ Citizen identity card, identification card, certification of residence information, notice of personal identification number and citizen information in the National Population Database of the representative of the electricity purchaser. At a place where electricity purchase is registered, the household purchaser can only sign 01 Contract.

+ In case the household's residence information is not used at the electricity purchase location, the electricity purchaser shall provide a copy of one of the following documents: Certificate of house ownership; certificate of land use right (on land with houses); house division decision; house sales contract; house lease contract with a term of 01 year or more or other documents proving the ownership, management and use of the electricity purchase location with a term of 01 year or more to register for electricity purchase and only sign 01 Contract

- 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 must have active legal capacity as per the law, have a request for electricity purchase and residence information of the household where the electricity is purchased or supporting documents of ownership, management and use of place where the electricity is purchased.

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.

3. Acts breaking contract of electricity purchase and sale in Vietnam

According to Article 13 of Decree 137/2013/NĐ-CP, regulations on acts breaking contract of electricity purchase and sale are as follows:

-  Violations of the electricity sellers include:

+ Postponing the electricity supply according to the signed electricity purchase and sale contract, unless the facilities of customer have not yet had full conditions for operation;

+ Failing to ensure quality, quantity of electric energy, stability in electricity supply according to the signed contracts except for force majeure circumstances;

+ Recording wrongly meter readings of electricity meter; calculating wrongly electricity charge on the bill;

+ Postponing or failing to pay compensation for the electricity purchaser in respect to damages caused by their fault;

+ Other acts breaking regulations of electricity purchase and sale.

- Violations of the electricity purchasers include:

+ Postponing implementation of the assigned contracts;

+ Using electricity improperly with purpose stated in contract;

+ Using in excess of yield already registered in chart of sub loading stated in contract of electricity purchase and sale at rush hour;

+Failing to make liquidation of contracts when they fail to use electricity;

+ Paying electricity charge later than provided time without legitimate reason;

+ Postponing or failing to pay compensation for the electricity seller in respect to damages caused by their fault;

+ Other acts breaking regulations of electricity purchase and sale.

More details can be found in Circular 16/2023/TT-BCT taking effect on October 16, 2023 and replacing Circular 19/2014/TT-BCT dated June 18, 2014 and Circular 38/2022/TT-BCT dated December 30, 2022

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