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Foreigners’ acquisition of Vietnamese renewable energy projects deemed normal

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HCMC – The partial or complete acquisition of renewable energy projects in Vietnam by foreign investors is a normal market practice stipulated in the Investment Law, according to an official with the Ministry of Industry and Trade.

Many foreign investors have poured large sums of money into solar and wind power projects in Vietnam and later acquired some of these projects.

In 2018, B. Grimm Power PLC, one of Thailand’s largest private power producers, acquired an 80% stake in Phu Yen TTP Joint Stock Company, the owner of a 257-megawatt solar power project in the south-central coastal province of Phu Yen.

Earlier, the Thai investor clinched a deal with a Vietnamese firm to develop a 420-megawatt solar power plant in the southern province of Tay Ninh. The plant was touted as the largest of its kind in Southeast Asia.

In March 2019, France-based Quadran International Group and Truong Thanh Vietnam Group struck a credit contract worth US$37 million to build a solar power plant, called Cat Hiep, in the south-central coastal province of Binh Dinh.

The 60-hectare plant, which broke ground in September 2018, was expected to turn out some 78,000-80,000 megawatt-hours of electricity per year since it was first connected with the national grid in May 2019.

An official of the Electricity and Renewable Energy Department under the ministry told Nguoi Lao Dong newspaper on Monday that some Vietnamese firms have either partially or fully transferred their wind and solar power projects though joint ventures or stake transfers to partners from China, Thailand, the Philippines and Singapore, among others.

“The whole or partial transfer of investment projects is a standard activity within the market system and is stipulated in the Investment Law,” stressed the official with the Ministry of Industry and Trade.

Citing prevailing regulations, the source explained that these projects can be transferred to foreign investors if certain conditions are fulfilled.

The Ministry of Industry and Trade or departments of local governments are in charge of overseeing the stake transfer of these projects or changes to their shareholders.

Unlike coal and gas power projects under the build-operate-transfer investment model, the execution of solar and wind power projects is handled without Government guarantees, according to the Electricity and Renewable Energy Department.

The official noted that the participation of local and international investors in electricity generation despite the absence of government guarantees is a success in investment attraction.

Also, foreign investors are more experienced and competent in funding and operating renewable energy plants, bringing greater benefits to themselves and the Vietnamese economy, according to the senior official.

The official pointed out that foreign investors were given the green light to develop solar energy from Prime Minister Nguyen Xuan Phuc in two decisions on the relevant incentives, as long as they comply with regulations on foreign investment in Vietnam.

As of May 11, as many as 92 solar power projects and 10 wind power projects with a combined capacity of roughly 6,000 megawatts had been commercially operational.

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