Requirements for investor of hydropower projects in Vietnam

Requirements for investor of hydropower projects in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Principles of management of hydropower project construction investment in Vietnam

According to Article 12 of Circular 43/2012/TT-BCT, the principles of management of hydropower project construction investment are as follows

- The investment in construction of hydropower projects must ensure:

+ Compliance with the regulations of the law on investment, construction, water resources, environmental protection and other relevant regulations;

+ Compliance with the hydropower planning and in accordance with the electricity development plan approved by the competent authority.

- In case the projects are under the hydropower planning but not yet included in the electricity development plan or not in accordance with the electricity power development plan, the competent authorities permitting investment must consult the Ministry of Industry and Trade of the compatibility of the project with electricity development planning before considering permission for investment.

- Any change in the legal status of the investor, scope, tasks, schedule of hydropower projects in the construction process must be competent state agencies related to written permissionbefore implementation.

2. Requirements for investor of hydropower projects in Vietnam

Requirements for investor of hydropower projects include:

- As enterprises of economic sectors established under the provisions of the Law on Enterprises and having business line of construction investment of hydropower projects.

- Having sufficient financial capacity to implement the project: Investors must ensure their equity of at least 30% of the total investment of the project and being committed in writing by the credit institutions, financial institutions, banks for the rest of the investment loan.

Investors must report to the competent authorities on the selection of the investors specified in Clause 2, Article 15 of Circular 43/2012/TT-BCT and on the plan to allocate investment capital for the projects and ensure the compliance with progress of the project implementation.

- Investor is not the investor of another project which is being slowly deployed or delayed later than 12 months compared with regulation in the investment certificate, unless it is suspended or extended for the implementation of the project by provisions of the law on investment.

Investors have to provide copies of dossiers relating to the implementation of the projects in which they are investors to the investment authority for consideration and shall be responsible for the accuracy of this information.

(Article 13 of Circular 43/2012/TT-BCT)

3. Selection of investor of hydropower project in Vietnam

Pursuant to Article 15 of Circular 43/2012/TT-BCT, the selection of investor of hydropower project in Vietnam is regulated as follows:

(1) The selection of investor of hydropower project must ensure:

- Compliance with current regulations of the law on investment, procurement and other relevant regulations.

- Proper selection of the investor with the highest capacity and experience to carry out investment projects on schedule, quality assurance and minimization the negative impacts of the project on the environment and society.

(2) The selection of investor of hydropower project is implemented as follows:

- For projects in the list of power in the national electricity development plan but the investors are not identified:

Complying with the regulation of the law on investment and decision on approval of national electricity development plan of the Prime Minister.

In particular, the competent authorities selecting the investors must consult the ministries and sectors and localities concerned for review before submission to the competent authorities for the approval of the project investor.

- For other projects: the provincial People’s Committee having projects shall organize the selection of the investor; consult the Ministry of Industry and Trade about the compatibility of the project with planning and the meeting the requirements of the investor; consult the relevant agencies for consideration and approval.

(3) In case the project is located in many provinces, the provincial People’s Committee shall assume the prime responsibility and consult the Ministry of Industry and Trade and the People’s Committees of provinces concerned and other agencies as prescribed to select the investor.

(4) The consulted agencies specified at (2) shall reply consulting agency within 10 working days from the date of receipt of a written request for consultation.

Beyond this time limit, if the relevant authorities have no opinion, they shall be deemed to agree with the consulting agencies on the selection of project investors.

(5) Encouraging the selection of an investor to carry out cluster of hydropower projects related to the regulation of the flow or use power grid works of capacity transmission in common of the hydropower plants.

(6) Enterprises that have invested funds and participated in hydropower planning in accordance with Clause 4, Article 8 of Circular 43/2012/TT-BCT are prioritized to become the investor of a number of hydropower projects in that planning study if registering investment and meeting the prescribed requirements.

Nguyen Thi Hoai Thuong

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