28 August, 2018
Solar energy industry in Vietnam remains one of the most legally unpredictable areas as the saga around the possible COD extension appears to re-emerge. On 8 August 2018, the Government issued a Resolution No. 104/NQ-CP summarizing the decisions that this authority reached in its regular meeting in July 2018. In this 12-page long document, the Government only briefly addressed the issue of possible COD extension for PV energy projects in Ninh Thuan (Point 14). Accordingly, it appears that after many backs-and-forths, the long proposed COD extension for Ninh Thuan solar power projects will be approved.
This proposal has been through a lot of hectic struggles. The market would recall that rumor for such extension was first emerged in June 2018, before an official letter from the Prime Minister Office killed it off in July 2018.
Now, it appears that the advocates for COD extension finally prevail as this is the first ever such COD extension is approved by a legal document issued by the Government rather than quasi-judicial official letters.
It must be noted that the language under Resolution No. 104 does not provide a certainty as it still calls for MPI to finalize another legal document to formalize this extension. However, Resolution No. 104 provides a clear mandate that MPI must finalize such legal document prior to 20 August 2018. As this article is published, such document should be already in place but there is no such information available on the public domain to confirm it.
That means the players in this market will need to take every movement by the Government with a pinch of salt in light of internal struggles that we have witnessed.
A very important note is that this COD extension is not for every one. First, it only limits to solar power projects in Ninh Thuan province, which adds up so far to 2,000 MW. So, a project owner in Binh Thuan would need to pass this news as reference only even though we learn that many players and watchdogs are pushing for a nationwide COD extension, expecting to be out end of this year. Second, only projects which are already in the master plan approved by the MOIT and the Government will receive this treatment. That means, new and upcoming projects will not receive this COD extension.
As experience will tell, there will be a lot more to learn from this new area for both sides, government and the investors. Please stay tuned for more updates!
For further information, please contact:
Oliver Massmann, Partner, Duane Morris
omassmann@duanemorris.com
