Vietnam’s Power Sector: Policy Update of October 2025

The power sector in Vietnam is about to welcome a new policy, which is expected to resolve existing difficulties in the sector.

Accordingly, in the Draft Resolution of the National Assembly on the mechanism and policy to address challenges in the national power development for the 2026-2030 period (updated on 01 October 2025) (hereafter referred to as “Draft”), the Ministry of Industry & Trade has proposed multiple incentive policies for power projects.

Among which, the policies that garnered the most attention are those that involve BOT power projects, including:

• Application of foreign laws and English in BOT power contracts;
• Mortgage of Land Use Right;
• Price agreement in USD;
• Government’s guarantee.

In this Legal Update, CNC shall provide a brief of the key notes in the Draft Resolution of the National Assembly on the mechanism and policy to address challenges in the national power development for the 2026-2030 period.

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Policy on Power Projects

Investment policy

Some of the procedures related to investment policy are simplified as follows:[1]

Former policy	New Policy	Requirments for Applying the New Policy
Procedures for investment policy approval	Abolished	Power projects/constructions under the Power Development Power (“PDP”) or Province Planning (except for Offshore Wind Power).
Investment Policy Approval	Replaced by Decision on the approval of PDP or Province Planning
Procedures for Land Allocation/ Land Lease / Change of land use purpose requests	Replaced by Decision on Investment Project Approval
Procedures for the submission to the state owner’s representative agency applicable to Employers who are state-owned enterprises	Abolished	Type of Projects: National key and emergency power projects/ constructions. Employer: Enterprises in which the State owns 100% of the charter capital or enterprises in which the previous enterprises own 100% of the charter capital (hereafter collectively referred to as “100% State-Owned Enterprises”).
Site clearance, compensation works	Performed in conjunction with the project implementation	Type of Projects: National Key and Emergency Projects/Constructions. Planning: Update land-related planning.

Selection of Investors

100% State-Owned Enterprises is entitled to propose to the provincial People’s Committee a decision on selecting these enterprises as the investors of power grid projects/constructions under PDP or Province Planning.[2]

Furthermore, land auction/bidding is not required for the selection of investors in the following projects/constructions:[3]

• National key and emergency power projects/constructions;
• Projects located in national defense – security sensitive locations;
• Projects require synchronization of core infrastructures (such as LNG terminal, key power transmission grid or key connection framework);
• Offshore wind power projects.

BOT Power Projects

Incentive policies related to BOT power projects are those that received the most attention in this Draft. To be specific:[4]

Contract type			Exclusive Incentive	General Incentive
Project Contract	BOT Contract	Power Purchase Agreement (“PPA”)	Agreement in USD and Payment in VND. The compensation amount/ income share/ payment for early termination of project contract may be made in USD (applicable to BOT power projects involving international bidding). Government guarantees the obligations of EVN for 15-18 years (depending on the projects). Government guarantees 30% of the income which shall be converted into USD, and supports the conversion of the remaining 70% income into USD.	Foreign law may be applicable law of the Contract, provided that the parties agreed so (except for land lease agreement). English is prioritized as the prevalent contact language (except for land lease agreement). The contract term is 20-25 years (depending on the projects). Government guarantees BOT contracts throughout their term.
		Land Lease Agreement	Mortgage the land use rights at international financial institutions and foreign credit institutions (applicable to one-time payment land lease). Government guarantees the obligation of the land lessee.
		Fuel Supply Agreement	Government guarantees the coal supply obligations of Vinacomin. Government guarantees the gas supply obligations (including LNG) of PVN.
		Shared Infrastructure Sharing Agreement	Government guarantees the obligations of investors in the construction and operation of shared infrastructure at power centers.
	Government Guarantee
	Approval & Confirmation of the Lender (A&C)

 

Imported LNG Gas Projects

The Draft provides policies on incentive for Imported LNG Gas projects that have COD[5] recognized prior to 2031, which include:[6]

• Offtake of electricity output (“Qc”): 75% of the average multi-year electricity output of gas-fired thermal power projects;
• Maximum duration for payment of principal and interests: 10 years from the COD.

Policy on Planning

PDP or the Plan for power grid development under the Province Planning may be flexibly adjusted in the following cases:[7]

• Sudden and emergency requests due to reasons related to national defense, security, and national interests;
• For power source projects: Adjustments of the scale of power capacity (adjustment margin shall not exceed 10%) and the project’s progress, or addition of projects to substitute for delayed projects;
• For power grid projects: Adjustments of the scale of power capacity, voltage level, connection points, progress, or addition of projects to synchronize and distribute the capacity of power source.

Policy on Offshore Wind Power

Below are some of the notable policies in relation to Offshore Wind Power projects[8]:

Offshore wind power projects
Project purposes	Sale of electricity to the national power grid	Sale of electricity to system with substations	Power export
Project implementation conditions	Employer: Main business sector: electricity trading; Minimum charter capital: 10.000 billion dong; Minimum capital of the owner: 15% of the total investment amount; Approved by the Ministry of National Defense, Ministry of Public Security, Ministry of Foreign Affairs, and Ministry of Finance. Project: Approved by the Ministry of National Defense, Ministry of Public Security, Ministry of Foreign Affairs, Ministry of Agriculture and Environment, Ministry of Construction, Ministry of Industry and Commerce; and PVN; Date of investment guidelines approval and investors approval: prior to 2031; Total scale of capacity of projects: shall not exceed 6.000 MW; Under Power Planning and operated prior to 2031.		Consistent with the Power Planning; Approved by the Ministry of National Defense, Ministry of Public Security, Ministry of Foreign Affairs, Ministry of Justice, and Ministry of Industry and Commerce; Not overlapped with other planning; Does not affect activities in the oil and gas industry; Projects that have yet to be recommended by investors.
Investment policy approval authority	National Assembly or Prime Minister (depending on the projects)	Provincial People’s Committee	Provincial People’s Committee
Investor selection methods	Neither bidding nor land auction is required	Bidding	Bidding
Project performance guarantees	Deposit 2% of the total project investment capital	Deposit 2% of the total project investment capital	Deposit 2% of the total project investment capital
Cost of leasing sea areas and lands			Exempted/reduced
Purchase Price	The ceiling price of the price range for offshore wind power in the year of investor approval
Incentive Policy	For projects that have investment policy approved prior to 2030 and COD prior to 2032: Offtake of 90% of the average multi-year electricity output of the project; Maximum duration for payment of principal and interests: 15 years. For projects that have investment policy approved prior to 2032 and COD prior to 2036: Offtake of 80% of the average multi-year electricity output of the project; Maximum duration for payment of principal and interests: 15 years. Note: the average multi-year electricity output of the project is determined based on the wind measurement result at the project area.

Direct Power Purchase Agreement (DPPA)

Regarding direct power purchase agreements (“DPPA”), the Draft provides as follows:[9]

• The sale and purchase price of electricity under the Physical DPPA mechanism[10] shall ensure the recovery of (i) electricity generation cost, (ii) costs for the investment into and the management of power grids, and (iii) costs for sale of electricity;
• The electricity retailers at industrial parks are direct purchaser of electricity under the DPPA mechanism.

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Junior Associate I Pham Nguyen Tan Trung Phone: (84) 347 924 900 Email: trung.pham@cnccounsel.com

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Disclaimers:

This article has been prepared and published for the purpose of introducing or informing our Clients and potential clients on information pertaining to legal issues, opinions and/or developments in Vietnam. Information presented in this article does not constitute legal advice of any form and may be adjusted without advance notice.

[1] Article 6, Draft.

[2] Article 7.1, Draft.

[3] Article 7.2, Draft.

[4] Article 8, Draft.

[5] Commercial Date.

[6] Article 9, Draft.

[7] Article 4, Draft.

[8] From Article 11 to Article 14, Draft.

[9] Article 16, Draft.

[10] Physical DPPA: DPPA under separate connection power grid.