Special Operating and Financial Management Mechanisms for Vietnam Electricity (EVN)

Regarding EVN's operating mechanisms, asset management and owner's capital:

First: EVN's Members' Council shall decide on the transfer of investment projects, assets and power facilities between EVN and its wholly owned subsidiaries (in which EVN holds 100% of charter capital). Such transfers shall be carried out on an as-is basis at book value, without revaluation of the transferred investment projects, assets or power facilities. Corresponding increases or decreases in capital shall be recorded in accordance with applicable laws.

Second: EVN shall be responsible for determining the design life, actual useful life and revised depreciation period for fixed assets forming part of power facilities that have been revalued pursuant to decisions by competent authorities, as well as power facilities developed under the public-private partnership (PPP) model and transferred to EVN.

Third: The value of power facilities developed under the PPP model and transferred to EVN shall be determined as follows:

1. Upon completion of the handover and acceptance process, EVN shall provisionally recognize an increase in assets and in the owner's investment capital in the enterprise in accordance with Decree No. 02/2024/ND-CP dated January 10, 2024, on the transfer of publicly owned power facilities to EVN; Decree No. 286/2025/ND-CP dated November 3, 2025, amending and supplementing several decrees in the field of management and use of public assets; and any relevant amending, supplementing or replacement documents, if applicable.

2. Where information on the original cost and remaining value of an asset is unavailable, the value of the power facility shall be provisionally determined at 20% of the investment capital of the power facility. The provisional value of each component shall be determined by allocating the value of the power facility according to appropriate criteria, based on the actual handover records.

Following the provisional determination of value, EVN shall continue to determine the value of the transferred PPP power facilities in accordance with Decree No. 02/2024/ND-CP, Decree No. 286/2025/ND-CP and any relevant amending, supplementing or replacement documents, if applicable.

Upon receiving funds and assets under compensation and support policies for the relocation, rearrangement and undergrounding of power facilities, EVN shall recognize an increase in the owner's investment capital in EVN based on the compensation plan approved by the competent authority, after deducting any related expenses, if applicable.

For assets that must be dismantled or relocated pursuant to decisions by competent authorities, EVN shall reduce the recorded assets and the owner's investment capital in EVN by an amount corresponding to the remaining value of such assets, in accordance with applicable regulations.

Regarding EVN's revenue and expenses:

1. Foreign exchange differences arising during investment in power facilities included in the National Power Development Plan shall be accumulated and allocated to financial revenue or financial expenses. The allocation period for such expenses shall not exceed five years from the date the facility commences operation. For nationally important projects, the allocation period shall not exceed the loan repayment period.

2. Electricity meter costs shall be allocated over a period not exceeding five years from the date the expenses are incurred, in line with EVN's production and business conditions.

3. Expenses incurred in repairing and remedying incidents affecting power facilities shall be allocated based on the remaining amount of such expenses after deducting compensation received from insurance organizations and other support sources, if any. Where incidents caused by objective factors, such as natural disasters or fires, adversely affect business performance (resulting in lower-than-planned profits or losses), EVN may allocate these expenses over a period not exceeding three years from the date they are incurred.

Regarding expenses to be covered from after-tax profits:

The expenses specified in Point b, Clause 1, Article 25 of the Law on Management and Investment of State Capital in Enterprises refer to costs arising from unsuccessful investments in power projects and facilities that are specific in nature and carry high risks.

These costs are non-deductible when determining taxable income under corporate income tax regulations. They include investment preparation costs and investment costs already incurred in accordance with applicable laws for projects and power facilities falling under either of the following circumstances:

1. Projects or power facilities that do not meet the conditions for implementation due to adjustments to the relevant plans by competent state authorities.

2. Projects or power facilities that do not meet the conditions for implementation because competent state authorities have issued or amended policies that change investment conditions, and such policy changes are the direct and decisive cause of the projects or facilities no longer meeting the conditions for implementation.

The documentation required to determine unsuccessful investment costs includes:

1. For cases specified in Point a, Clause 1 of this Article (projects or facilities rendered ineligible for implementation due to planning adjustments):

• Planning adjustment documents issued by competent authorities, accompanied by an impact assessment report demonstrating that the planning adjustments have rendered the project ineligible for implementation.

• Acceptance, payment and final settlement records specifying the completed quantities and values of investment survey work, in accordance with applicable laws.

• An independent audit report on the value of costs incurred.

2. For cases specified in Point b, Clause 1 of this Article (projects or facilities rendered ineligible for implementation due to policy changes):

• Decisions on policy changes issued by competent authorities, together with an impact assessment report demonstrating that such policy changes have rendered the project or power facility ineligible for implementation.

• Acceptance, payment and final settlement records specifying the completed quantities and values of work, or final settlement records and documentation determining the value of investment costs incurred.

• An independent audit report on the final settlement value.

Based on an unqualified audit opinion issued by an independent auditor on the final settlement value, EVN shall decide on the expense allocation period, which shall not exceed five years from the date on which the Members' Council approves the eligibility for final settlement.

Transitional Provisions:

The Decree takes effect on December 28, 2026, and applies from the 2026 financial year.

For power facilities developed under the PPP model that were transferred to EVN before the effective date of this Decree but for which the valuation process has not yet been completed for the provisional recognition of increases in assets and the owner's investment capital in the enterprise, EVN shall provisionally record the asset value in accordance with this Decree from the date of handover.

Pending the issuance of amended and supplemented versions of its Charter, Financial Regulations and internal regulations, EVN may continue to apply the provisions of its existing Charter, Financial Regulations and internal regulations, provided that they are not inconsistent with the Law on Management and Investment of State Capital in Enterprises, any more favorable provisions stipulated under that Law, its implementing and guiding documents, or this Decree./.