Criteria for assessing the effectiveness of investment development in the electricity sector for selecting investors to implement energy project investments in Vietnam

Criteria for assessing the effectiveness of investment development in the electricity sector for selecting investors to implement energy project investments in Vietnam

The evaluation criteria for the effectiveness of investment in the development of the electricity sector in selecting investors for the implementation of energy projects in Vietnam are as follows:

- The electricity price ceiling is set based on the bidding documents of the project and below the ceiling (maximum price) of the electricity generation price frame corresponding to the type of power source issued by the Ministry of Industry and Trade in the bidding year.

- The principles for establishing the electricity price ceiling are agreed upon with the electricity purchaser according to the legal regulations on electric power in the bidding documents based on:

+ Reasonable and legitimate expenses of the investor throughout the entire economic life of the project; the Internal Rate of Return (IRR) should not exceed 12%.

+ The electricity price ceiling excludes value-added tax, water resource tax, charges for the rights to exploit water resources, forest environment service fees, environmental protection fees for solid waste, and for industrial wastewater (applicable to thermal power plants) and other taxes, fees, and monetary charges as regulated by competent state management agencies (except for taxes and fees accounted for in the electricity price plan).

More details can be found in Circular 27/2024/TT-BCT, which takes effect from November 21, 2024.

In case the energy project investment has not issued the bidding documents or has issued but not yet closed the bidding, the bidding documents must be prepared in accordance with Circular 27/2024/TT-BCT.

If the energy project investment has closed bids but by the date Circular 27/2024/TT-BCT comes into effect the investor selection results have not been approved, the evaluation of the bidding documents shall continue based on the issued bidding documents.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE