The information about BOT power projects

The BOT projects can be cleared as follow:

1 / For Vung Ang 2 Thermal Power Project, the land lease agreement (LLA) has been initialed on March 19, 2020 by the Management Board of Ha Tinh Economic Zone and the Investor. The remaining issues related to confirming and approving LLA are being discussed between the investor, the law consultant of MOIT and the lender side.

EVN and Investor have agreed and ready officially signed power purchase agreement (PPA).

Currently, the Electricity and Renewable Energy Department (MOIT) and the investor have agreed on the contents of the BOT and Government guarantee (GGU) agreements and the two sides' law consultants are reviewing these agreements which will be ready officially signed with a confirmation of the law consultants.

It is expected that, the BOT Agreement will be officially signed in the fourth quarter of 2021, unit 1 of the project - in commercial operation in the third quarter of 2025 and the unit 2 - in the first quarter of 2026. 

2 / For Nam Dinh 1 Thermal Power Project (TPP), basically, the BOT and GGU agreements have been agreed by the MOIT and investor and continue to be improved (except for problems related to coal sources provided by Vinacomin and the Government guarantees for Vinacomin obligations, with several points in BOT and GGU agreements achieved in the recent BOT power projects, such as restructuring loans, repaying compensation costs for site clearance, changing the owned companies of the investor, detecting unexploded bombs and mines at the project site, threshold to be The calculation is to change the law, update the GGU form and the loan ceiling.

Facing this fact, at the beginning of May 2020, MOIT issued a report to the Prime Minister on the coal supply for the project as domestic (Vinacomin) or mix between domestic and imported coal sources, and the Government guarantees Vinacomin obligations.

Immediately after that, the Deputy Prime Minister Trinh Dinh Dung chaired the meeting with the concerned ministries and agencies on the above issues, and the Government Office consulted the concerned ministries and agencies in writing documents for summarizing and reporting to the Prime Minister for consideration and decision.

At the present, the project LLA has been initialed by Nam Dinh Provincial People’s Committee (PPC) and the investor and the project PPA has been initialed by EVN and the investor. However, EVN is still worried about the 500 kV transmission line with a length of 133 km from Nam Dinh 1 TPP to Pho Noi 500 kV transformer substation that could not meet the progress schedule of Nam Dinh 1 TPP.

As planned, the project BOT Agreement will be officially signed in the third quarter of 2020, financial close - in the fourth quarter of 2021 and commercial operation of unit 1 - in the first quarter of 2026 and unit 2 - in the third quarter of 2026.

3 / For Vinh Tan 3 Thermal Power Project (TPP), the project LLA has been initialed in January 2019 by the Binh Thuan PPC and the investor, project PPA has been initialed in December 2018 by EVN and investor.

The MOIT and investor already agreed almost all contents of BOT and GGU agreements, and initialed these in January 2020. 

The remaining issues include: Guarantee mechanism for foreign currency conversion, the ceiling limit for loans in the payment formula to terminate early and the conversion of Vinh Tan 3 Energy Joint Stock Company - VTEC to the Company Limited (BOT Company).

Due to the foreign currency conversion guarantee mechanism belonged to the management of the State Bank of Vietnam (SBV), the Department of Electricity and Renewable Energy asked the investor to  requested the investor to work directly with the SBV (as the same the recent BOT power projects worked) to exchange and agree on the contents of the foreign currency conversion. Currently, the two sides are coordinating and exchanging to finalize.

Regarding the conversion of Vinh Tan 3 Energy Joint Stock Company (VTEC) to a BOT Company, on April 9, 2020, the Department of Electricity and Renewable Energy issued a document guiding VTEC about this. Currently, VTEC is cooperating with EVN to solve.

As planned, the BOT agreement will be officially signed in the third quarter of 2020, financial close - in the fourth quarter of 2021 and commercial operation of unit 1 - in the second quarter of 2025, unit 2 - in the fourth quarter of 2025 and unit 3 in the second quarter of 2026.

4 / For Song Hau 2 Thermal Power Project, most of the contents of the BOT and GGU agreements have been agreed, currently the MOIT investor are cooperating together to finalize and initiate. For the remaining 2 issues as the foreign currency conversion mechanism and ceiling limit for loans in early termination payment formula which MOIT reported to the Prime Minister (PM) and PM has directed as follow:

Firstly, the Government only to guarantee converting only 30% turnover of the project in Vietnam dong after deducting the spending amount in Vietnam dong into USD.

Secondly: the ceiling limit for loans in early termination payment formula, the MOIT is responsible for completing the mechanism according to the conclusions of Standing Committee of the Government in Document No. 05 / TB-VPCP dated January 4, 2019.

The Hau Giang PPC and investor already initialed the project LLA in the end of 2015. On March 26, 2020 Hau Giang PPC issued a document to MOIT about returning compensation costs for site clearance and constructing resettlement area.

On April 10, 2020 MOIT issued a document for guiding Hau Giang PPC to implementing this issue.

EVN and investor has initialed the project PPA and submitted EVN Member Council for approval.

As planned, the BOT agreement will be officially signed in the third quarter of 2020, financial close - in the fourth quarter of 2021, and unit 1 put into commercial operation in the first quarter of 2026, unit 2 - in the third quarter of 2026.

VER.