Guidelines for selecting offshore wind power project investors in Vietnam from February 1, 2025

Guidelines for selecting offshore wind power project investors in Vietnam from February 1, 2025​ (Image from Internet)

On November 30, 2024, the National Assembly of Vietnam passed the Law on Electricity 2024.

Guidelines for selecting offshore wind power project investors in Vietnam from February 1, 2025

According to the provision in Article 29 of the Law on Electricity 2024, the selection of investors for offshore wind power projects in Vietnam shall proceed as follows:

- Offshore wind power projects shall select investors as follows:

+ Public investment projects shall be executed in accordance with public investment laws;

+ Public-private partnership investment projects shall follow laws regarding public-private partnership investment;

+ Business investment projects shall be implemented according to investment laws.

- Except for projects under the authority of the National Assembly's investment policy approval, the Prime Minister of Vietnam shall approve the investment policy and at the same time approve the investor for the following offshore wind power business investment projects:

+ Projects that do not conduct a bidding process to select investors due to national defense or security reasons, based on the opinions of the Ministry of National Defense or the Ministry of Public Security;

+ Projects for which the investment policy and investor approval are granted as specified at point a, clause 1, Article 28 of the Law on Electricity 2024. To be specific:

“Article 28. Approval or Decision on Investment Policy for Offshore Wind Power Projects

1. Investors submit dossiers to propose the investment policy approval for offshore wind power projects including:

a) An enterprise wholly owned by the State submits dossiers proposing investment policy approval and investor approval simultaneously, or proposes investment policy approval to carry out investor selection through bidding.”

- Besides the subjects specified in clause 2, Article 29 of the Law on Electricity 2024, selecting an investor to carry out the offshore wind power business project to supply electricity to the national grid will be in accordance with the Law on Electricity 2024 and procurement laws. The electricity price ceiling in the bidding documents shall not exceed the highest electricity price of the price framework issued by the Ministry of Industry and Trade. The winning electricity price for investor selection is the maximum electricity price for the buyer to negotiate with the winning investor. Bidding documents shall be prepared according to legal regulations and include the following documents and content:

+ A draft power purchase agreement agreed upon by the bidding organization and the electricity purchaser;

+ Incentives and preferential policies stipulated in clause 3, Article 26 of the Law on Electricity 2024, as follows:

“Article 26. General Provisions

...

3. Offshore wind power projects shall enjoy the following mechanisms and policies based on conditions and durations stipulated by the Government of Vietnam:

a) Long-term minimum contractual electricity output for projects supplying electricity to the national grid;

b) Exemption and reduction of marine area use fees;

c) Exemption and reduction of land levy, land rent.”

- Based on the conditions of socio-economic development, objectives for development and investment attraction for each period, and the conditions of the electricity market development, to ensure electricity supply security, the Government of Vietnam regulates the following content:

+ Conditions for investors to participate in bidding;

+ Selection of investors for implementing offshore wind power projects to meet development goals per planning and attract investment in this field;

+ Negotiation and conclusion of business investment project, and power purchase agreement contracts with winning investors stipulated in clause 3, Article 29 of the Law on Electricity 2024.

Refer to the Law on Electricity 2024 effective from February 1, 2025.

The Law on Electricity 2004 (amended in 2012) becomes invalid from the effective date of the Law on Electricity 2024, except in cases specified in clauses 1, 2, 3, and 4, Article 81 of the Law on Electricity 2024.

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