Chương II: Phương pháp xác định giá dịch vụ phát điện, nguyên tắc tính giá điện để thực hiện dự án điện lực

MINISTRY OF INDUSTRY AND TRADE OF VIETNAM ------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ----------------
No. 12/2025/TT-BCT	Hanoi, February 01, 2025

 

CIRCULAR

METHODS FOR DETERMINING ELECTRICITY GENERATION SERVICE PRICE; RULES FOR DETERMINING ELECTRICITY PRICE FOR ELECTRICITY PROJECT IMPLEMENTATION; MAIN CONTENTS OF POWER PURCHASE AGREEMENT

Pursuant to the Law on Electricity dated November 30, 2024;

Pursuant to Decree No. 96/2022/ND-CP dated November 29, 2022 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade; Decree No. 105/2024/ND-CP dated August 1, 2024 on amendment to Decree No. 96/2022/ND-CP and Decree No. 26/2018/ND-CP dated February 28, 2018 of the Government on Organization and operation regulations of Vietnam Electricity;

At request of the Director of Electricity Regulatory Authority of Vietnam;

The Minister of Industry and Trade promulgates Circular on methods for determining electricity generation service price; rules for determining electricity price for electricity project implementation; main contents of power purchase agreement.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidelines on implementing Clause 3 Article 12, Clause 5 Article 44, Point g Clause 1 Article 51 of the Law on Electricity No. 61/2024/QH15 on method for determining electricity generation service price; rules for determining electricity price for electricity project implementation; main contents of power purchase agreement.

2. This Circular applies to:

a) Power plants operating in territory of the Socialist Republic of Vietnam and connected to national electricity system;

b) Other agencies, organizations, and individuals.

3. Provisions pertaining to methods for determining electricity generation service price; rules for determining electricity price for electricity project implementation; main contents of power purchase agreement (PPA) hereunder do not apply to: multi-objective strategic hydroelectricity plants, small-scale renewable energy power plants that adopt avoidable cost tariff, independent power plants invested under BOT model, power plants and generator groups providing auxiliary services; power plants where electricity purchase mechanics dictated under documents of competent authorities are adopted.

Article 2. Definitions

In this Circular, the terms below are construed as follows:

1. The Seller means an Electric utility possessing a power plant.

2. The Buyer means Vietnam Electricity (or authorized representatives thereof), Northern Power Corporation, Central Power Corporation, Southern Power Corporation, Hanoi City Power Corporation, Ho Chi Minh City Power Corporation, major electricity users, other electricity buyers according to regulations of electricity market.

3. Project developer means an agency, organization, individual possessing capital, applying for capital loan, or being assigned to manage, use capital for investment in electricity project.

4. Electricity delivered means electricity delivered to the Buyer by the Seller.

5. Electric utility means an electricity entity in possession of a power plant or power plants.

6. Electrical system and market operator means the National Power System and Market Operator Company or other entity depending on development level of electricity market.

7. Fuel purchase agreement means an agreement between the Electric utility and a fuel trading entity for the supply of fuel for power plants, signed in accordance with applicable laws, guarantees legitimate fuel sources and competitive, transparent prices.

8. Liquefied natural gas (LNG) storage, regasification, and distribution agreement means an agreement between Electric utility or a fuel trading entity and LNG storage investment, management entity for the storage, regasification, distribution, and supply of gas for power plant and is signed in a manner compliant with applicable laws with competitive and transparent prices.

9. Fuel transport agreement means an agreement between Electric utility or fuel trading entity for the transportation of fuel to power plants, is signed in accordance with applicable laws, and guarantees competitive, transparent prices.

10. Base year means the year in which total investment is approved for use in calculation of electricity generation service price.

11. New power plant means a power plant built new or a part of power plant built new that has not entered into first-time power purchase agreement (PPA).

12. Net heat rate means the amount of thermal energy consumed to produce one kWh of electrical energy at delivery point (BTU/kWh or kJ/kWh or kCal/kWh).

13. Total investment means total investment costs of the project determined in accordance with applicable regulations and law, fundamental design, and other contents of feasibility study.

14. Revised total investment means total investment costs revised in accordance with construction laws applicable as of the date on which electricity generation service price negotiation is conducted.

15. Finalized investment means total legitimate expenditure incurred during investment process until project operation. Legitimate expenditure means expenditure incurred within the scope of approved project, design, estimates; signed construction contracts compliant with regulations of the law; including amendments thereto approved in a law compliant manner. Finalized investment is to be limited by approved total investment (or revised total investment) as per the law.

Chapter II

METHODS FOR DETERMINING ELECTRICITY GENERATION SERVICE PRICE, RULES FOR DETERMINING ELECTRICITY PRICE FOR ELECTRICITY PROJECT IMPLEMENTATION

Section 1. METHODS FOR DETERMINING ELECTRICITY GENERATION SERVICE PRICE FOR NEW POWER PLANT

Article 3. Rules for determining electricity generation service price

1. PPA price of a power plant shall be developed on the basis of:

a) Legitimate, reasonable costs incurred by Project developer throughout economic life of the project;

b) Internal rate of return (IRR) does not exceed 12%.

2. PPA price is to be negotiated between the Seller and the Buyer and developed in accordance with Article 4 hereof.

3. PPA price does not include value-added tax (VAT), water tax, licensing fee for water resource mining, forest environment service fee, environmental protection fee in respect of solid waste and industrial wastewater (applicable to thermal power plants) and other taxes, fees, monetary collectables according to regulations of competent authorities (other than those included in electricity generation service price).

4. PPA price for comparing with electricity generation service price bracket in the Base year:

a) PPA price in the Base year must be within price bracket for electricity generation imposed by the Minister of Industry and Trade in the Base year, in which, PPA price of power plant for comparison with price bracket for electricity generation in the Base year shall be calculated on the basis of cost components corresponding to cost components serving calculation of price range for electricity generation;

b) In case electricity generation service price bracket is not available in Base year, PPA price shall be calculated by converting corresponding cost components in order to compare with electricity generation service price bracket of the latest year applicable to the power plant model.

Article 4. Methods for determining PPA price in Base year of power plant

PPA price of Base year P_C (VND/kWh) is to be determined using formula below:

P_C = P^CD + P^BD

1. P^CD (VND/kWh) means fixed costs of the Base year and is determined using the formula below:

P^CD = FC + FOMC_b

Where:

FC:	Average fixed costs determined in accordance with Article 5 hereof (VND/kWh);
FOMCb:	Fixed operating and maintenance costs of Base year and determined in accordance with Article 6 hereof (VND/kWh).

2. P^BD (VND/kWh) means variable price of the Base year and is determined as follows:

a) In respect of thermal power plant, P^BD is determined using the formula below:

Where:

	Variable price components depending on primary fuel costs of power plant in Base year and determined in accordance with Clause 1 Article 7 hereof (VND/kWh);
	Variable price components depending on secondary fuel costs of power plant in Base year and determined in accordance with Clause 2 Article 7 hereof (VND/kWh);
	Variable price components depending on other factors of power plant in Base year and determined in accordance with Clause 3 Article 7 hereof (VND/kWh);
	Transportation costs for primary fuel for electricity generation in the Base year and determined in accordance with Clause 4 Article 7 hereof (VND/kWh).

b) In respect of hydroelectricity plant, solar power plant, and wind power plant: P^BD equals 0.

3. Experimentation, test, commissioning costs of power plant: Payment of experimentation, test operation, commissioning costs prior to commercial operation date agreed upon by the Seller and the Buyer is not to be repeated in total approved investment of the project.

Article 5. Methods for determining average fixed costs of power plant

1. Average fixed costs of power plant (FC) are determined on the basis of project financial analysis according to Schedule 1 and Schedule 2 under Appendix II attached hereto. Input data for determination of average fixed costs (FC) of power plant are determined in accordance with Clause 2 of this Article.

2. Primary input data used in determination of average fixed costs (FC) of power plant:

a) Investment expenditure: Investment expenditure determined on the basis of total investment (or revised total investment) effective as of the date on which negotiation for electricity generation service price or finalized investment is conducted in respect of negotiating power plant in accordance with Article 15 hereof shall be used in the calculation of electricity generation service price, including all expenditure within investment liability of the Seller until connection points of power plant such as: power plant; infrastructure, power plant wharfs, electricity storage system (in case of renewable energy power plants), investment expenditure on electrical grid from power plant to connection points, other relevant costs, and costs allocated to the project (if any);

b) Economic life: Determined in accordance with Appendix I attached hereto, unless competent authority issue documents approving economic life of project that is different from that stipulated under this Circular at which point said documents prevail (in years);

c) Average electricity generated in multiple years at delivery point (A_GN) is calculated:

Where:

ANM:	Electrical output of power plant (excluding electricity storage system) according to fundamental design effective on the negotiation date (kWh). In case of thermal power plant, formula below shall apply: ANM = Pt x Tmax Pt: Terminal capacity of generators under approved design (kW); Tmax: Average number of peak hours in multiple years of power plant compliant with documents of competent state authority (if any) or appendix I attached hereto. In respect of power plant that lacks Tmax under Appendix I attached hereto, such parameter shall be agreed upon by the Seller and the Buyer.
ttd:	Percentage of self-sufficient electricity and electricity loss from step-up transformers of power plant and transmission lines to delivery points with national electrical system (if any) agreed upon by the Seller and the Buyer; determined in accordance with approved fundamental design or technical dossiers of equipment manufacturers (if any at the time of negotiation), and not exceeding value defined under approved fundamental design (%) or compliant with documents of competent authority (if any);
kCS:	Average rate of power attenuation for the entire economic life of thermal power plant (if any) agreed upon by the Seller and the Buyer; determined in accordance with approved fundamental design or technical dossiers of manufacturers at the time of negotiation (if any).

Where A_GN cannot be determined using the aforementioned formula, the Seller and the Buyer shall determine in accordance with fundamental design, technical design converted to effective delivery points on negotiation date (in respect of wind power plant, the parties shall negotiate to determine productivity in accordance with P50 energy yield). Where A_GN cannot be determined on the basis of approved technical design or fundamental design, A_GN shall then be determined in accordance with documents of competent authority. Where A_GN cannot be determined even via documents of competent authority, A_GN shall then be agreed upon by the Seller and the Buyer.

d) Period of provisions for depreciation of primary fixed property (year): Determined on the basis of period of provisions for depreciation of individual group of primary fixed property in accordance with periods for creating provisions for depreciation under relevant laws from time to time or documents of competent authority permitting provisions for depreciation (if any);

dd) Percentage of equity, local capital, and investment stage in total investment shall be determined in accordance with decision approving investment project, capital mobilization on negotiation date and compliant with regulations promulgated by competent authority. Equity accounts for at least 15% of total investment;

e) Loan interest and loan repayment period during operating period: determined on the basis of loan agreements, documents, dossiers between Project developer and credit institutions, creditors.

Where total loan capital under load agreements or legitimate documents between Project developer and credit institutions is lower than total loan capital according to electricity price calculation plan, the Seller and the Buyer shall negotiate about the remaining loan capital on the basis of: Minimum dept repayment period of 10 years and loan interest as follows:

e1) Foreign currency loan interest shall be equal to the Secured Overnight Financing Rate (SOFR) with an average term of 180 days over 36 months preceding the calculation date announced by FED (www.newyorkfed.org) plus (+) annual average arrangement fee charged by the bank at 3% per year;

e2) VND loan interest shall be equal to the average VND deposit interest rate with a term of 12 months for individual customers of 05 years preceding the year of calculation, determined on September 30th every year by Vietcombank, VietinBank, BIDV and Agribank or their lawful inheritors, plus (+) the annual average arrangement fee charged by the banks at 3%/year.  

g) Corporate income tax rates, other taxes and fees: Determined in accordance with relevant laws.

Article 6. Methods for determining operating and maintenance costs of power plant

FOMC_b of the Base year (VND/kWh) shall be determined using the formula below:

Where:

	Operating and maintenance costs dependent on major repair costs and other costs in the Base year, determined in accordance with Clause 1 of this Article (VND/kWh);
	Operating and maintenance costs dependent on personnel costs in the Base year, determined in accordance with Clause 2 of this Article (VND/kWh).

1.  of the Base year (VND/kWh) shall be determined using the formula below:

Where:

: Is total major repair costs and other costs in Base year and determined using formula below:

TC_scl =VDT_XD+TB x k_scl + C_cdk

Where:

VDTXD+TB:	Total construction costs and equipment costs determined on the basis of total investment under Point a Clause 2 Article 5 hereof (VND);
kscl:	Percentage of major repair costs and other costs (%) of power plant agreed upon by the Seller and the Buyer and does not exceed values defined under Appendix I attached hereto. In respect of power plant that lacks kscl under Appendix I attached hereto, such parameter shall be agreed upon by the Seller and the Buyer.
Ccdk:	Costs for dredging navigable channels, infrastructure costs, other relevant costs agreed upon by the Seller and the Buyer (if any) (VND). Where data on calculation of this item in the Base year is not available, the Seller and the Buyer shall negotiate about the total of this item at the time of negotiation and adjusted to the Base year at a rate of 2,5%/year (VND);
AGN:	Average electricity generated over multiple years at delivery points between the Buyer and the Seller and calculated in accordance with Point Clause 2 Article 5 hereof (kWh).

2.  (VND/kWh) shall be determined using the formula below:

Where:

TCnc:

Total personnel costs in the Base year including costs for salaries, social insurance, health insurance, unemployment insurance, union fees, and associated allowances (VND); Total personnel costs TCnc of the Base year are determined on the basis of total personnel costs of power plant and converted to Base year as follows: Where salaries serving calculation of personnel costs of power plant equal regional minimum wages of the year in which electricity prices are calculated: The rate of conversion to Base year is determined by regional minimum wage; Where total personnel costs cannot be identified via methods mentioned above, total personnel costs in the Base year are determined using formula below: TCnc =VDTXD+TB x knc Where: VDTXD+TB: Total construction costs and equipment costs determined on the basis of total investment under Point a Clause 2 Article 5 hereof (VND); knc: Percentage of personnel costs (%) of power plant agreed upon by the Seller and the Buyer and not exceeding values under Appendix I attached hereto. In respect of power plant that lacks knc under Appendix I attached hereto, such parameter shall be agreed upon by the Seller and the Buyer; AGN : Average electricity generated over multiple years at delivery points between the Buyer and the Seller and calculated according to Point c Clause 2 Article 5 hereof (kWh).

Article 7. Methods for determining variable prices of thermal power plant

Variable prices of thermal power plant in the Base year P^BD (VND/kWh) are determined using formula below:

Where:

	Variable price components depending on primary fuel costs of power plant in the Base year and determined in accordance with Clause 1 of this Article (VND/kWh);
	Variable price components depending on secondary fuel costs of power plant in the Base year and determined in accordance with Clause 2 of this Article (VND/kWh);
	Variable price components depending on other factors of power plant in the Base year and determined in accordance with Clause 3 of this Article (VND/kWh);
	Transportation costs for primary fuel for electricity generation in the Base year and determined in accordance with Clause 4 of this Article (VND/kWh).

1. Variable price components dependent on changes to primary fuel costs of power plant in the Base year , are determined using formula below:

Where:

Average net heat rate of power plants using primary fuel agreed upon by the Seller and the Buyer, not exceeding values defined under fundamental design/technical design corresponding to total investment serving the calculation of electricity prices or specifications of equipment manufacturers, and calculated in a manner corresponding to load under Appendix I attached hereto (kcal/kWh or kJ/kWh or BTU/kWh or kg/kWh);

Primary fuel costs in the Base year and calculated by determining weighted mean of fuel purchase agreements or written agreements (excluding VAT) (VND/kcal or VND/kJ or VND/BTU or VND/kg).

2. Variable price components dependent on changes to secondary fuel costs of power plant in the Base year , are determined using formula below:

Where:

	Net heat rate of power plant using secondary fuel agreed upon by the Seller and the Buyer (kg/kWh or kcal/kWh or kJ/kWh or BTU/kWh);
	Secondary fuel costs in the Base year and calculated by determining weighted mean of fuel purchase agreements or written agreements (excluding VAT) (VND/kg or VND/kcal or VND/kJ or VND /BTU).

3. Variable cost components adjusted by other factors of power plant in the Base year  are determined using the following formula:

Where:

Cvlp:	Total annual auxiliary material costs of power plant and determined on the basis of quantity and unit price of auxiliary materials used for electricity generation in the Base year (VND). Where data for calculation in the Base year are not available, the cost components of a year where sufficient data are available can be used and adjusted to the Base year at a rate of 2,5%/year;
Ckd:	Total activation costs include fuel costs, other costs for activation (VND); number of activations agreed upon by the Seller and the Buyer on the basis of electrical grid demand and operational characteristics of power plant. If data required for the calculation of total activation costs in the Base year are insufficient, these costs can be calculated using data from a year with sufficient data and adjusted to the base year at a rate of 2,5%/year;
Ck:	Annual repair and maintenance costs, including regular repair and maintenance costs based on total investment and equipment costs of power plant. Percentage of regular repair and maintenance costs are determined by the parties and do not exceed values defined under Appendix I attached hereto. Where a power plant is not mentioned under Appendix I attached hereto, percentage of regular repair and maintenance costs shall be agreed upon by the Seller and the Buyer;
AGN:	Average electricity generated over multiple years at delivery points between the Buyer and the Seller and calculated according to Point c Clause 2 Article 5 hereof (kWh).

4. Transportation costs for primary fuel of power plant in the Base year  are determined using formula below:

Where:

Net heat rate of power plants defined under Clause 1 of this Article;

Transportation costs of primary fuel for electricity generation of the Base year (VAT excluded) (VND/kcal or VND/kJ or VND/BTU or VND/kg) and determined as follows: For coal-fired thermal power plants: weighted mean according to coal transport agreements or other written agreements; For thermal power plants using natural gas: weighted mean of gas pipeline transportation services approved by competent authority in accordance with the Law on Prices and other relevant law provisions; For gas-fired thermal power plants using LNG: weighted mean of LNG storage, regasification, transportation, and distribution service prices for electricity production approved by competent authority in accordance with the Law on prices and other relevant law provisions; For waste-to-energy power plants, bioenergy power plants, new energy power plants: agreed upon by the Seller and the Buyer in accordance with physical conditions of power plants; For thermal power plants using a combination of fuels: agreed upon by the Seller and the Buyer in accordance with physical conditions of power plants; Where primary fuel costs  already include transportation costs for primary fuel, collection, transportation, distribution, storage, regasification fees in fuel purchase agreements, the corresponding transportation costs for primary fuel  shall equal 0.

Article 8. Power plants where methods for determining electricity generation service prices have not been promulgated

For power plants where methods for determining electricity generation service prices and electricity generation service price bracket have not been promulgated, the Buyer and the Seller shall negotiate about development of methods for determining electricity generation service prices in accordance with actual conditions of power plants and request the Ministry of Industry and Trade to review.

Article 9. Provisional prices

Where negotiation on PPA price has not concluded, the Buyer and the Seller have the right to agree on provisional prices until official prices are decided.

Article 10. Methods for determining electricity generation service prices for solar power plants, wind power plants that have entered into PPA with EVN but have not satisfied requirements for adoption of electricity prices according to Decisions of the Prime Minister

Methods for determining electricity generation service prices for solar power plants, wind power plants that have entered into PPA with EVN but have not satisfied requirements for adoption of electricity prices according to Decision No. 11/2017/QD-TTg dated April 11, 2017, Decision No. 13/2020/QD-TTg dated April 6, 2020, Decision No. 37/2011/QD-TTg dated June 26, 2011, Decision No. 39/2018/QD-TTg dated September 10, 2018 of the Prime Minister:

1. The Seller and the Buyer shall rely on rules in determining electricity generation service prices under this Circular to develop electricity generation service price plan of power plant:

a) Base year of power plant undergoing electricity generation service price negotiation means the year in which said power plant enters into commercial operation;

b) Where electricity generation service prices have not been adopted for parts of power plant, said electricity generation service prices shall be determined by input data of the entire power plant.

2. Average annual delivered electricity is determined as follows:

a) On the basis of fundamental design (or technical design if compliance with fundamental design is not feasible) appraised by competent authority (in respect of wind power plant, the parties shall negotiate to determine productivity in accordance with P50 energy yield);

b) Where method detailed under Point a of this Clause is not viable, the parties shall negotiate based on technical specifications in fundamental design or technical design dossiers used in notice on appraisal results of competent authority. Where annual delivered electricity is determined by fundamental design, total investment based on fundamental design shall be used; where annual delivered electricity is determined by technical design, total investment based on corresponding technical design shall be used.

3. FOMC_b is determined using formula below:

Where:

TC: Total operating and maintenance costs of power plant and determined by: TC = VDT x k

Where:

VDT:	Power plant investment (VND);
k:	Percentage of operating and maintenance costs (%) of power plant negotiated by the Seller and the Buyer and not exceeding limits under Appendix I attached hereto.

4. Other parameters for calculating electricity generation service prices, methods for determining PPA prices of power plant upon payment, and rules in determining annual fixed costs of PPA shall be negotiated by the Seller and the Buyer on the basis provided under Chapter II hereof.

5. Documents serving PPA negotiation shall conform to Clause 1 Article 19 hereof.

Article 11. Rules in determining electricity prices in bidding for investor selection of electricity project

Where bidding for investor selection of electricity projects is conducted in accordance with Clause 1 Article 19 of the Law on Electricity, electricity prices in bidding documents are to be developed in a manner compliant with principles under Chapter II hereof. Data for calculation of electricity prices are to be proposed on the basis of bidding documents and consulting entities.

Section. METHODS FOR DETERMINING ELECTRICITY GENERATION SERVICE PRICES OF POWER PLANTS IN COMMERCIAL OPERATION

Article 12. Methods for determining electricity generation service prices for power plants with expired PPA and unexpired economic life

For power plant (of which PPA has been negotiated and signed in accordance with Circular No. 41/2010/TT-BCT, Circular No. 56/2014/TT-BCT , Circular No. 57/2020/TT-BCT , and Circular No. 07/2024/TT-BCT) of which PPA has expired and economic life has not expired, the Seller and the Buyer shall negotiate about electricity generation service prices of subsequent years until expiry of economic life in a manner that ensures the average fixed costs does not change relative to prices agreed upon by the Seller and the Buyer.

Article 13. Methods for determining electricity generation service prices for power plants with expired economic life

1. Fixed costs of power plant with expired economic life shall be so determined to allow power plant to recover operational costs. Period of calculation shall be negotiated by the parties or determined in accordance with major repair cycle of primary equipment and agreement on reasonable profits. Where documents of competent authority approving period of calculating fixed costs, said documents shall prevail.

2. Variable prices of thermal power plant with expired economic life shall be determined in accordance with Article 7 hereof taking into account elements appropriate to actual operating situations.

3. Average electrical production generated shall be so determined on the basis of power plant capacity under approved design and T_max under Appendix I attached hereto. In respect of power plant that lacks T_max under Appendix I attached hereto, average electrical production shall be so determined on the basis of actual statistics of the nearest period appropriate to the next calculation period.

4. Where economic life of a power plant has expired and power plant upgrade investment is implemented, both parties shall negotiate on prices of PPA of the power plant in accordance with Article 4, Article 5, Article 6, and Article 7 hereof and depreciation period of primary equipment subject to the upgrade.

5. PPA term of power plant with expired economic life shall be negotiated by the Seller and the Buyer on the basis of major repair cycle of primary equipment.

Article 14. Methods for determining electricity generation service prices for power plants with unexpired PPA, expired electricity generation service prices or power plants with expired BOT contracts and delivered to the Government or power plants where electricity pricing under documents of competent authorities is adopted and power plants in commercial operation with expired PPA

1. Electricity generation service prices shall be determined in a manner that allows power plant to recover investment (if any), electricity production costs, and ensures reasonable profits.

2. Calculation period of electricity generation service prices shall be compliant with the remainder of economic life or PPA term or agreement between the parties.

3. Average electrical production generated shall be so determined on the basis of power plant capacity under approved design and T_max under Appendix I attached hereto. In respect of power plant that lacks T_max under Appendix I attached hereto, average electrical production shall be so determined on the basis of actual statistics of the nearest period appropriate to the next calculation period.

4. Variable prices of thermal power plant with expired economic life shall be determined in accordance with Article 7 hereof taking into account elements appropriate to actual operating situations.

5. Operating and maintenance costs are negotiated between the parties.

6. Investment expenditure for calculation of electricity generation service prices shall be determined on the basis of remaining property value on the date on which electricity generation prices no longer take effect or PPA expires plus renovation, upgrade costs (if any).

Article 15. Methods for determining electricity generation service prices of power plants renegotiated based on finalized investment

In respect of power plant where electricity generation service prices are renegotiated in accordance with finalized investment according to Clause 1 and Clause 2 Article 27 hereof:

1. Upon determining finalized investment, the Seller has the responsibility to send documents related to the finalized investment to the Buyer.

2. The Seller and the Buyer shall re-negotiate about electricity generation service prices on the following principles:

a) Methods for determining PPA price are compliant with Article 4 hereof;

b) Calculation parameters for PPA prices are compliant with Article 4 hereof and updated on the date on which finalized investment is determined;

c) PPA prices for comparison with electricity generation price bracket do not exceed the applicable price bracket of the year in which the entire power plant enters into commercial operation;

d) Electricity generation service prices applicable from commercial operation date of power plant and annual fixed costs shall conform to Article 16 hereof; annual fixed costs of years preceding the date on which the Seller and the Buyer enter into contracts for PPA amendments on the basis of electricity prices determined by finalized investment;

dd) The Base year of power plant of which electricity generation service prices are negotiated on the basis of finalized investment shall be the year in which the entire power plant enters into commercial operation.

Section 3. METHODS FOR DETERMINING ANNUAL POWER PURCHASE AGREEMENT PRICES

Article 16. Rules in determining annual fixed costs of PPA

1. The parties have the right to apply average fixed costs that they have negotiated to years within contract term. Where the parties agree to convert the negotiated average fixed costs to annual fixed costs, the determination of these fixed costs must adhere to principles under Clause 2 of this Article.

2. On the basis of practical loan capacity and financial capacity of the project, both parties shall negotiate about average fixed costs of power plant and convert to annual fixed costs (FC_j: fixed cost of year j) as long as average fixed cost does not change relative to mutually agreed value and following principles are complied:

a) Financial discount rate when calculating annual fixed costs agreed by both parties shall equal the IRR of power plant;

b) Projects developer shall repay loans for investment and construction of power plant according to deadline for repaying loan capital.

Article 17. Rules in adjusting annual electricity generation service prices in PPA

1. Components of operating and maintenance costs of power plant are to be adjusted on the principles below:

a) Components of operating and maintenance costs dependent on major repair costs and other costs are to be adjusted for average inflation rate in accordance with Appendix I attached hereto. The Seller and the Buyer shall negotiate about mechanism of adjusting components of operating and maintenance costs dependent on major repair costs and other costs in respect of items where foreign currency is involved;

b) Components of operating and maintenance costs dependent on personnel costs are to be adjusted by changes to region-based minimum wage application on the date of payment or CPI provided by central statistics authority to a maximum of 2,5%/year.

2. On an annual basis, the Seller and the Buyer shall calculate and negotiate payment plan for exchange rate differences on the basis of total capital loan in foreign currency, repayment plan for loan in foreign currency, data on actual principal repayment, exchange rate agreed upon by the Seller and the Buyer in electricity generation service pricing, and exchange rate of the previous year. Difference in FED rates (VND) is calculated using the formula below:

Where:

m:	Number of types of foreign currency in electricity generation service pricing agreed upon by the Seller and the Buyer (type);
n:	Number of principal repayment of foreign currency i in year of calculation (time);
Di,j:	Number of principal loan in foreign currency paid in installment j in year of calculation;
	Exchange rate in installment j of foreign currency i in the year (.../VND);
	Base exchange rate of foreign currency i agreed upon by the Seller and the Buyer in electricity generation service pricing (…/VND).

Article 18. Methods for determining PPA prices of power plant at the time of payment

PPA prices of power plant at the time of payment for electricity bill of month t, year j are P_{C,j t} (VND/kWh) and are determined using formula below:

Where:

	Fixed costs of the year j and determined in accordance with Article 16 hereof (VND/kWh);
:	Operating and maintenance costs of month t, year j determined under Clause 1 of this Article (VND/kWh);
	Variable prices of month t year j determined in accordance with Clause 2 of this Article (VND/kWh).

1. Operating and maintenance costs of month t and year j are determined using formula below:

Where:

	Components of operating and maintenance costs dependent on major repair costs and other costs of the year j determined in accordance with Point a of this Clause (VND/kWh);
	Components of operating and maintenance costs dependent on personnel costs of the month t and year j determined in accordance with Point b of this Clause (VND/kWh).

a) Components of operating and maintenance costs dependent on major repair costs and other costs are determined using the formula below:

Where:

	Operating and maintenance costs dependent on major repair costs and other costs of the Base year determined in accordance with Clause 1 Article 6 hereof;
i:	Inflation rate of components of operating and maintenance costs dependent on major repair costs and other costs according to Appendix I attached hereto;
l:	Number of years of payment from Base year (with Base year l =1).

b) Components of operating and maintenance costs dependent on personnel costs of month t and year j  are determined as follows:

Where salaries used in calculation of electricity prices equal the region-based minimum wage, components of operating and maintenance costs dependent on personnel costs are to be determined using the formula below:

Where:

	Operating and maintenance costs dependent on personnel costs of the Base year and determined in accordance with Clause 2 Article 6 hereof;
	Applicable region-based minimum wage on payment date of month t, year j (VND/month);
	Region-based minimum wage of the Base year (VND/month).

Where total personnel costs TC_nc are calculated based on percentage of investment in construction and equipment, components of operating and maintenance costs dependent on personnel costs are determined using formula below (VND/kWh):

 

Where:

	Operating and maintenance costs dependent on personnel costs of the Base year and determined in accordance with Clause 2 Article 6 hereof;
:	Inflation rate applicable to components of operating and maintenance costs dependent on personnel costs, determined in accordance with CPI of the year (j-1) relative to the year (j-2) published by central statistics authority in December of the year (j-1) to a maximum of 2,5%/year;
l:	Number of year of payment from Base year (with Base year l =1, i1 = 0).

2. Variable prices of thermal power plant in month t and year j  (VND/kWh) are determined using formula below:

Where:

	Components of variable costs dependent on changes to primary fuel costs of power plant in month t and year j determined in accordance with Point a of this Clause (VND/kWh);
	Components of variable costs dependent on changes to secondary fuel costs of power plant in month t and year j determined in accordance with Point b of this Clause (VND/kWh);
	Components of variable costs depending on other changes of power plant of year j determined in accordance with Point c of this Clause (VND/kWh);
	Transportation costs for primary fuel of power plant in month t and year j determined in accordance with Point d of this Clause (VND/kWh).

a) Components of variable costs depending on changes to primary fuel costs of power plant in month t and year j  are determined using formula below:

Where:

	Average net heat rate determined in accordance with Clause 1 Article 7 hereof;
kHR:	Adjustable factor for average net heat rate regarding actual operating conditions such as coolant temperature, ambient temperature, humidity, load negotiated by the parties or in actual operation from operation cycle to operation cycle;
kHS:	Rate of efficiency drop of year j (%);
l:	Number of years since commercial operation of power plant;
	Primary fuel costs for electricity generation at the time of payment of month t and year j and determined by weighted mean of quantity of invoices under PPAs in a period of time negotiated by the parties.

 b) Components of variable costs dependent on changes to secondary fuel costs of power plant in month t and year j  are determined using formula below:

Where:

	Means components of variable costs depending on changes to secondary fuel costs of power plant in Base year determined under Clause 2 Article 7 hereof;
kHS:	Rate of efficiency drop of year j (%);
l:	Number of years since commercial operation of power plant;
	Secondary fuel costs for electricity generation at the time of payment of month t and year j and determined by weighted mean of quantity of invoices under PPAs in a period of time negotiated by the parties.
	Secondary fuel costs for electricity generation in the Base year in Clause 2 Article 7 hereof.

c) Components of variable costs adjusted according to other variations of power plant in the year j  are determined using the following formula:

Where:

	Components of variable costs adjusted by other variations of power plant in the Base year and determined under Clause 3 Article 7 hereof;
i:	Inflation rates of components of variable costs dependent on other variations based on rates under Appendix I hereof;
kHS:	Rate of efficiency drop of year j (%);
l:	Number of years since commercial operation (from commercial operation date of power plant, the first commercial operation year of power plant starts from the commercial operation date of the first generator group, l = 1);
m:	Number of year of payment since the Base year (with Base year m =1).

d) Transportation costs for primary fuel of power plant in month t year j  (VND/kWh) are determined using formula below:

Where:

	Average net heat rate determined in accordance with Clause 1 Article 7 hereof;
kHR:	Adjustable factor for average net heat rate regarding actual operating conditions such as coolant temperature, ambient temperature, humidity, load negotiated by the parties or in actual operation from operation cycle to operation cycle;
kHS:	Rate of efficiency drop of year j (%);
l:	Number of years since commercial operation of power plant;
	Transportation costs for primary fuel at the time of payment of month t and year j, determined by weighted mean of quantity of invoices under fuel transport agreements and LNG storage, regasification, and distribution contracts (if any) (VAT not included), to be specific: For coal-fired thermal power plants: weighted mean of coal transport agreement or other written agreements; For thermal power plants utilizing natural gas: weighted mean of gas pipeline transport agreement for electrical production approved by competent authority in accordance with the Law on Prices and other relevant law provisions; For thermal power plants utilizing LNG: weighted mean of LNG storage, regasification, transportation, and distribution service costs for electrical production approved by competent authority in accordance with the Law on Prices and other relevant law provisions; For waste-to-energy power plants, bioenergy power plants, new energy power plants: agreement between the Seller and the Buyer on the basis of practical situations of the power plants; For thermal power plants utilizing a combination of fuel types: agreement between the Seller and the Buyer on the basis of practical situations of the power plants; Where fuel purchase agreements already include transportation costs for primary fuel, components of respective transportation costs for primary fuel  equal 0.

3. Total activation costs in the month t of thermal power plant  (VND) are determined using formula below:

Where:

u:	Number assigned to generator group of power plant;
U:	Number of generator group of power plant;
f:	Type of fuel (primary fuel f = 1; secondary fuel f = 2);
s:	Activation status of generator group;
S:	Number of start-up status of generator group;
pu,f,s:	Number of activations of generator group u, using fuel f, at state s in the month;
Mu,f,s:	Fuel used (kg) or heat used in case of gas (BTU) per activation of generator group u, using fuel f, at state s;
Du,f,s:	Fuel unit price per activation of generator group u, using fuel f, at state s, in VND/kg and VND/BTU;
	Means total other costs required per activation, in VND.

4. Regulations on payment of activation costs:

a) For thermal power plants: conform to regulations on competitive electricity market promulgated by the Ministry of Industry and Trade;

b) For waste-to-energy power plants, bioenergy power plants, new energy power plants: conform to agreement between the Seller and the Buyer.

Chapter III

POWER PURCHASE AGREEMENT

Article 19. Primary contents of power purchase agreement

1. Primary contents of PPA under Appendix III attached hereto shall serve as the basis for negotiation between the Seller and the Buyer. Both parties have the right to negotiate and amend terms and clauses under PPA in a manner compliant with Vietnam’s laws.

2. Language in use is Vietnamese. Where the Seller consists of foreign investors, the Seller and the Buyer may negotiate about the use of English as an additional contract language.

Article 20. Documents serving PPA negotiation between the parties

1. Documents requesting PPA negotiation for new power plants include:

a) Draft PPA according to Appendix III attached hereto;

b) Written approval for investment guidelines of Decision on investment guidelines or Certificate of investment registration of projects;

c) Decision on construction investment and presentation, appraisal reports for power plant investment projects produced by independent advisors, and attachments.

d) Decision approving initial total investment or revised total investment effective as of the date on which negotiation on electricity generation prices and main contents of fundamental design of investment projects relevant to PPA negotiation is conducted, appraisal reports for fundamental design and written notice on appraisal results of fundamental design, total investment issued by construction authorities as per the law (if any);

dd) Negotiation on connection of power plants to national electricity system and connection solution;

e) Loan agreements or documents, texts between Developer and creditors, disbursement plan or recordings for all loan capital;

g) Fuel supply contracts for power plants indicating fuel price for electricity generation, fuel transportation costs, LNG storage, regasification, and distribution costs, and other fees, fuel delivery points and fuel supply time limit;

h) Documents calculating loss of capacity and electricity in transformers, power lines from step-up transfers to points connected to national electrical system and documents calculating self-sufficient electricity in power plants;

i) Documents calculating net heat rate in case of thermal power plants;

k) Electricity pricing defined in accordance with Section 1 and Section 3 of Chapter II hereof;

l) Other relevant documents (if any).

2. Documents serving PPA negotiation of power plants that have entered into commercial operation include:

a) Draft PPA according to Appendix III attached hereto;

b) Existing PPA;

c) Technical dossiers of power plants, technical specifications of SCADA/EMS, protective and automated relay system, P-Q operational characteristics of generator groups thus far;

d) Fuel supply agreements;

dd) Electricity pricing plan of power plants determined in accordance with Chapter II hereof;

e) Financial statements or relevant documents of power plants in recent years up to the date on which PPA negotiation is conducted;

g) Other relevant documents (if any).

Chapter IV

IMPLEMENTATION

Article 21. Responsibilities of electricity authorities affiliated to the Ministry of Industry and Trade

Provide guidelines and examine compliance with this Circular. When necessary, propose Circular amendments to stay in line with practice and conform to regulations of the law.

Article 22. Responsibilities of EVN

1. Take charge and cooperate with the Buyer, the Seller in calculating, unifying solutions for paying rate differences in implementation of PPA in accordance with this Circular.

2. Take charge and cooperate with the Buyer, the Seller in reviewing, unifying PPAs to stay in line with operations of electric utilities, improve operational effectiveness, reduce general costs of national electrical system at request of the Buyer or the Seller.

Article 23. Responsibilities of the Buyer

1. Negotiate PPA with the Seller in accordance with this Circular; ensure accountability, accuracy, legitimacy, and adequacy of provided data and documents.

2. Cooperate with the Seller in calculating, unifying rate differences in implementation of PPA in accordance with this Circular and providing to EVN for consideration of payment solutions.

Article 24. Responsibilities of the Seller

1. Negotiate PPA with the Buyer in accordance with this Circular; ensure accountability, accuracy, legitimacy, and adequacy of provided data and documents.

2. Provide adequate information, ensure accuracy, legitimacy, adequacy of data, documents provided to relevant entities and authorities during negotiation and examination of PPA.

3. Select fuel providers, fuel transport service providers and enter into fuel supply and transport agreements in a manner compliant with Vietnam’s laws and ensuring equality, competitiveness, and transparency.

4. Control fuel supply and fuel transport agreements in order to ensure legitimate fuel origin, competitive and transparent prices in accordance with relevant law provisions.

5. Cooperate with the Buyer in calculating annual rate differences in implementation of PPA in accordance with this Circular and requesting EVN to consider payment solutions.

Article 25. Responsibilities of fuel providers and fuel transport service providers

Sign framework agreements, fuel supply agreements, fuel transport agreements, and other relevant fuel agreements as per the law in a manner respecting equality, competition, transparency.

Article 26. Amendment to electricity generation service price

The Seller and the Buyer shall re-negotiate electricity generation service prices under signed PPA in accordance with Clause 4 Article 52 of the Law on Electricity.

Article 27. Transition clause

1. Where power plants have entered into PPAs in accordance with Circular No. 57/2020/TT-BCT , Circular No. 56/2014/TT-BCT , Circular No. 51/2015/TT-BCT and new energy power projects initiated before September 19 of 2017, the parties shall, when finalized investment is available, request re-calculation of electricity generation service prices depending on approved finalized investment under Article 15 hereof.

2. Where power plants have entered into PPAs in accordance with Circular No. 41/2010/TT-BCT and where competent authorities request re-negotiation on electricity prices according to finalized capital, the parties shall re-calculate electricity generation service prices based on approved finalized capital in accordance with Article 15 hereof.

3. Where power plants have entered into PPAs, the parties have the right to negotiate and discuss amendment to PPAs in accordance with this Circular.

4. For every phase of electricity market, the parties are responsible for revising and amending clauses under PPAs accordingly.

5. For rate differences of which payment plan has not been issued before the effective date of Circular No. 07/2024/TT-BCT , the parties shall calculate and negotiate payment plan for rate differences for this stage in accordance with Circular No. 07/2024/TT-BCT.

6. For electricity projects of which specific connection is invested before the effective date hereof, methods for determining specific connection prices under Circular No. 07/2024/TT-BCT continue to apply.

Article 28. Entry into force

1. This Circular comes into force from February 01, 2025.

2. Annul Circular No. 07/2024/TT-BCT dated April 12, 2024 of the Minister of Industry and Trade.

3. Annul Article 4 of Circular No. 13/2017/TT-BCT dated August 3, 2017 of the Minister of Industry and Trade on amendment to Circular No. 57/2014/TT-BCT dated December 19, 2014.

4. Difficulties that arise during implementation must be reported to Ministry of Industry and Trade./.

 

PP. MINISTER DEPUTY MINISTER Truong Thanh Hoai

 

 

APPENDIX I

PARAMETERS USED IN CALCULATION OF PPA PRICES
(Attached to Circular No. 12/2025/TT-BCT dated February 1, 2025 of the Minister of Industry and Trade)

Schedule 1 - Parameters used in calculation of PPA

No.	Item	Parameters
I	Economic life
1	Coal-fired thermal power plant	30 years
2	Combined cycle power plant	25 years
3	Hydroelectricity plant
3.1	Greater than 20 MW	40 years
3.2	From 3 MW to 20 MW	35 years
3.3	Less than 3 MW	25 years
4	Solar power plant	20 years
5	Wind power plant	20 years
6	Waste-to-energy plant	20 years
7	Biomass power plant	20 years
II	Percentage of operating and maintenance costs of thermal power plant (%)
1	Percentage of major repair costs and other costs (kscl)
1.1	Coal-fired thermal power plant	2,5%
1.2	Gas turbine combined cycle power plant	4,37%
1.3	Waste-to-energy plant	1,4%
2	Percentage of personnel costs (knc)
2.1	Coal-fired thermal power plant	1,5%
2.2	Gas turbine combined cycle power plant	1,9%
2.3	Waste-to-energy plant	0,7%
III	Percentage of operating and maintenance costs of hydroelectricity plant (%)
1	Percentage of major repair costs and other costs (kscl)
1.1	Of a capacity scale of 150 MW or lower	1,2%
1.2	Of a capacity scale from 151 MW to 300 MW	0,9%
1.3	Of a capacity scale of 301 MW or higher	0,6%
2	Percentage of personnel costs (knc)
2.1	Of a capacity scale of 150 MW or lower	0,8%
2.2	Of a capacity scale from 151 MW to 300 MW	0,5%
2.3	Of a capacity scale of 301 MW or higher	0,3%
IV	Average number of hours operating at maximum capacity in multiple years - Tmax (hours)
1	Coal-fired thermal power plant	6.500
2	Gas turbine combined cycle power plant	6.000
V	Average capacity loss percentage throughout economic life of thermal power plant (%)
1	Coal-fired thermal power plant	1,3%
2	Gas turbine combined cycle power plant	3%
VI	Percentage of annual repair and maintenance costs (%)
1	Coal-fired thermal power plant	0,8%
2	Gas turbine combined cycle power plant	0,8%
VII	Average inflation rate (%/year)
1	Inflation rate of components of operating and maintenance costs depending on major repair costs	2,5%/year
2	Inflation rate of price components depending on other changes	2,5%/year
VIII	Average load of thermal power plant	85%

Schedule 2 - Operating and maintenance cost percentages of solar power plant and wind power plant in accordance with Article 11 hereof

I	Percentage of operating and maintenance costs of solar power plant, wind power plant (%)
1	Floating solar power plant	1,5%
2	Land-based solar power plant	1,8%
3	Land-based wind power plant	2,0%
4	Off-shore wind power plant	1,8%

 

APPENDIX II

PROJECT FINANCIAL ANALYSIS FORMS
(Attached to Circular No. 12/2025/TT-BCT dated February 1, 2025 of Minister of Industry and Trade)

Schedule 1 - Business result estimates

Unit: ………………

No.	Entry	Year N	Year N+1	Year N+2	…	Total
I	Total income
1	Revenues generated by electricity sale
2	Other benefits provided by the project (if any)
3	Subsidization (if any)
II	Total costs
1	Depreciation of fixed assets
2	Operating and maintenance costs
3	Other costs (if any)
4	Loan interests
III	Pre-tax profits (I) - (II)
IV	Corporate income tax
V	Post-tax profits (III) - (IV)

Note: Revenues generated from electricity sale do not include VAT, water resource tax, licensing fees for extraction of water resources, forest environment fees, environmental protection fees in regard to solid wastes/industrial wastes (applicable to thermal power plants) and other taxes (if any). Schedule 1 is produced from the year in which income is generated for the first time.

 

Schedule 2 - Capital accumulation and financial indicators

Unit: ………………

No.	Entry	…	Year N-1	Year N	Year N+1	…	Total
I	Sources
1	Revenues generated by electricity sale
2	Other benefits provided by the project (if any)
3	Subsidization (if any)
4	Remaining value of fixed assets (calculated in the last year of the project)
5	Recovered value of working capital (calculated in the last year of the project)
II	Usage
1	Equity, loan capital (distributed by project schedule)
2	Other costs (if any)
3	Loan principles
4	Loan interests
5	Corporate income tax
III	Capital accumulation (I) - (II)
IV	Discount capital accumulation
V	Accrued discount capital accumulation

Note: Revenues generated from electricity sale do not include VAT, water resource tax, licensing fees for extraction of water resources, forest environment fees, environmental protection fees in regard to solid wastes/industrial wastewater (applicable to thermal power plants) and other taxes (if any). Schedule 2 is produced from the year in which construction starts.

 

APPENDIX III

PRIMARY CONTENTS OF POWER PURCHASE AGREEMENT
(Attached to Circular No. 12/2025/TT-BCT dated February 1, 2025 of the Minister of Industry and Trade)

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
-------------

POWER PURCHASE AGREEMENT

...................................POWER PLANT

 

Between

 

…………………… COMPANY

(THE SELLER)

 

- and -

 

……………………… COMPANY

(THE BUYER)

 

 

 

AGREEMENT NO. ……./20…/HD-NMD-[name of Power plant]

 

 

 

 

 

 ……………………… (location and date)

 

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
-------------

POWER PURCHASE AGREEMENT

Pursuant to the Law on Electricity dated November 30, 2024;

Pursuant to the Law on Commerce dated June 14, 2005;

Pursuant to the Civil Code dated November 24, 2015;

Pursuant to Circular No. ………… of Minister of Industry and Trade on operation of competitive electricity market;

Pursuant to Circular No. ………… of Minister of Industry and Trade on methods for determining electricity generation and PPA prices; ¹

Pursuant to electricity sale and purchase demands of the Buyer and the Seller,

Today, on .……………………………(date) , at ……………(location) .

The parties include:

The Seller: ___________________________________________________

Address: _________________________________________________

Phone: ___________________________ Fax:___________________

Tax Identification Number:____________________________________

Account: _____________________ Bank: _______________________

________________________________________________________

Representative: ____________________________________________

Title: _______________________________ authorized by __________________________________________ according to written authorization No. ____________, dated ___________________.

The Buyer:

Address: _________________________________________________

Phone: ___________________________ Fax:___________________

Tax Identification Number:____________________________________

Account: _____________________ Bank: _______________________

________________________________________________________

Representative: ____________________________________________

Title: _______________________________ authorized by __________________________________________ according to written authorization No. ____________, dated ___________________.

Hereby conclude Power Purchase Agreement of …………………… Power Plant as follows:

Article 1. Definitions

For the purposes of this Agreement, the following terms shall have the meanings hereby assigned to them:

1. The Seller shall be …………… Company in possession of the Power Plant.

2. The Buyer shall be ………………

3. Connection point …………

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 2. Agreement effectiveness and effective period

1. Agreement effectiveness

The Agreement comes into force from the date on which legitimate representatives of the parties officially sign the Agreement unless otherwise agreed.

2. Agreement effective period

Other than extension or termination of the Agreement before the expiry date thereof, effective period of the Agreement starts from the date on which the Agreement enters into force until …… years inclusive after commercial operation date of the Power Plant.

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 3. Electricity sale and purchase

1. Agreement prices: Conforms to Appendix V of the Agreement.

2. Agreement output: Conforms to Appendix V of the Agreement.

3. Electricity payment: On a monthly basis, the Buyer must pay the Seller in accordance with Appendix V hereof.

The parties shall negotiate and agree on implementation of payments that arise as a result of dispute resolution in accordance with Article 8 hereof.

(Where power plants cover fuel costs, the parties have the right to negotiate and amend details accordingly).

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 4. Commitment

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 5. The Seller's obligations prior to commercial operation date

1. Requirements pertaining to licenses and written approval

…

2. Reports on project schedule

…

3. Connection, test, and operation

…

4. Commercial operation date

…

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 6. Connection responsibility and metering system

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 7. Dispatch and operation of Power plant

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 8. Billing and payment

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 9. Events affecting Agreement execution and actions

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 10. Termination

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 11. Compensation

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 12. Exemption from liability for violations

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 13. Dispute settlement

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 14. Electricity industry restructuring and transfer of rights and obligations

1. Electricity industry restructuring and transfer of rights and obligations at the Buyer

The parties shall negotiate the situations in which the Buyer must be restructured, reorganized, dissolved, or having electricity purchase capacity phased out for the purpose of implementing plans for remodeling electricity industry in all levels of competitive electricity market in accordance with roadmap approved by the Prime Minister or later amendments. Where competent authority issues decisions on reorganizing, restructuring, or dissolving, the Buyer has the right to partially or entirely transfer their rights and obligations under the Agreement regardless of approval of the Seller to inheriting entity or entities decided by competent authority and such entities are responsible for executing legitimate rights and obligations of the Buyer as per the law.

The Seller must issue documents approving all transfer or authorizing implementation of rights and obligations under this Agreement of the Buyer.

2. Transfer of rights and obligations of the Seller

The Seller has the right to transfer their rights and obligations under the Agreement to inheriting entity or entities only when the Seller and the Buyer have agreed upon such transfer in writing in advance. Such written agreement must not deny the transfer or authorization of the Seller without reasons, unless the Seller is allowed to authorize or transfer any or all their rights and obligations under the Agreement pertaining to funding or other financial arrangement to Power Plant without discussing with the Buyer. This Agreement remains effective to warrant benefits and the performance of obligations of inheriting entities, authorized entities, transferred entities of the Seller.

3. Transition phase of competitive electricity market

If competitive electricity market is replaced by a different market model according to decision of competent authority during effective period of the Agreement, the parties must negotiate to amend or replace this Agreement in order to adhere to the new market model as long as electricity generation prices for the parties do not change.

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 15. Storing documents and providing information

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

 Article 16. Other costs

Each party is responsible for incurring taxes and fees or debts that arise in the performance of the Agreement. The parties undertake that this Agreement does not include electricity transmission costs, electricity distribution costs, or other similar costs and each party is responsible for incurring these costs as per the law.

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 17. Authorized representative and information exchange

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 18. Confidentiality

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

Article 19. Law applied and language of PPA

Presentation and implementation of this Agreement shall conform to Vietnam’s laws.

Language in use in the PPA shall be Vietnamese. The Seller and the Buyer may negotiate about the use of an English translation of the PPA.

Article 20. Other agreements

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

This Agreement shall be executed in 9 counterparts of equal value, 4 of which shall be held by each party. The Buyer shall submit 1 copy to electricity authority affiliated to the Ministry of Industry and Trade./.

 

REPRESENTATIVE OF THE BUYER (Title) (Seal and signature) (Full name)

REPRESENTATIVE OF THE SELLER (Title) (Seal and signature) (Full name)

 

___________________

 [1] In respect of laws and documents mentioned as prelude, the parties shall amend in accordance with documents applicable on the date on which PPA is signed.

 

Appendix I

PRIMARY PARAMETERS OF POWER PLANTS

(Attached to the Agreement No. ____ , dated ____)

Including descriptions, illustrations, and technical characteristics of Power plant

 

(Primary parameters of Power plant will be re-verified after signing contracts for procurement of primary equipment of Power plant.)

 

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

 

APPENDIX II

METERING SYSTEM AND DATA COLLECTION

(Attached to the Agreement No. ____ , dated ____)

I. INSTALLATION LOCATION AND FUNCTION OF METERING SYSTEM

1. Installation location of metering system

2. Functionalities of metering system shall conform to regulations on electricity metering promulgated by the Ministry of Industry and Trade.

II. TECHNICAL REQUIREMENTS OF METERING SYSTEM

Technical requirements of metering devices, metering circuit, lead sealing, meter reading collection and recording system shall conform to regulations on electricity metering promulgated by the Ministry of Industry and Trade.

III. METERING LOCATION

The parties hereby agree to use the following metering locations:

Primary metering location:

Backup metering location 1:

Backup metering location 2:

Metering location serving electricity market operation and data reconciliation:

IV. METHODS FOR DETERMINING DELIVERED ELECTRICAL PRODUCTION

1. Delivered electrical production

a) Electrical production for which the Seller is paid in the month is calculated using formula:

A_G =

A_G: Electrical production for which the Buyer pays the Seller in the month, (kWh).

b) Electrical production which the Seller receives from national electrical system in the month is calculated using formula:

A_N =

Where:

A_N: Electrical production received from grid via metering points in the month (kWh).

2. During period of competitive electricity market, monthly delivery of electricity must conform to regulations on electricity metering in competitive electricity market promulgated by the Ministry of Industry and Trade.

[The parties have the right to negotiate amendment in accordance with Vietnamese laws]

 

Appendix III

AGREEMENT ON OPERATIONAL CHARACTERISTICS

(Attached to the Agreement No. ____ , dated ____)

[The parties have the right to negotiate amendment in accordance with Vietnamese laws]

 

Appendix IV

AGREEMENT ON SCADA/EMS, COMMUNICATION, PROTECTIVE RELAY AND AUTOMATED SYSTEMS

(Attached to the Agreement No. ____ , dated ____)

[The parties have the right to negotiate amendment in accordance with Vietnamese laws]

 

Appendix V

ELECTRICITY SALE AND PURCHASE PRICES, ELECTRICITY PAYMENT

(Attached to the Agreement No. ____ , dated ____)

I. ELECTRICITY GENERATION SERVICE PRICES

1. PPA prices

PPA prices of power plants at the time of payment for electricity bill of month t, year j are P_{C,j t} (VND/kWh) and are determined using formula below:

Where:

FCj:	Fixed costs in the year j (VND/kWh);
FOMCj,t:	Operating and maintenance costs in month t of year j (VND/kWh);
:	Variable prices in month t, year j (VND/kWh).

In respect of hydroelectricity plant, solar power plant, and wind power plant,  equals 0.

1.1. Fixed costs:

Average fixed costs (not including VAT) are …… (VND/kWh);

Annual fixed costs FC_j (VND/kWh) from commercial operation date until expiry of economic life of power plant (not including VAT) conform to schedule below:

Year No.	1	2	3	4	...	...
Fixed costs (VND/kWh)

1.2. Operating and maintenance costs:

Operating and maintenance costs of month t and year j are determined using formula below:

Where:

:	Means components of operating and maintenance costs depending on major repair costs and other costs in year j (VND/kWh);
:	Means components of operating and maintenance costs depending on personnel costs in month t and year j (VND/kWh).

a) Components of operating and maintenance costs dependent on major repair costs and other costs in the year j  (VND/kWh) are determined using the formula below:

Where:

	Means components of operating and maintenance costs depending on major repair costs and other costs in Base year of and is ……(VND/kWh);
i:	Inflation rate of operating and maintenance costs dependent on major repair costs and other costs in accordance with this Circular;
l:	Number of year of payment from Base year (with Base year l =1).

b) Components of operating and maintenance costs depending on personnel costs of month t and year j (VND/kWh) is determined using the formula below:

- Where salaries included in calculation of electricity pricing equal regional minimum wages:

Where:

	Means components of operating and maintenance costs dependent on personnel costs of Base year of …… (VND/kWh);
Lmin,j,t :	Means regional minimum wages at the time of payment of month t and year j (VND/month);
Lmin,b :	Means regional minimum wages in the Base year of ……… (VND/month).

- Where total personnel costs TC_nc are calculated based on percentage of investment in construction and equipment, components of operating and maintenance costs dependent on personnel costs are determined using formula below (VND/kWh):

Where:

:	Means components of operating and maintenance costs dependent on personnel costs of Base year (VND/kWh);
i1:	Means inflation rate of components of operating and maintenance costs dependent on personnel costs determined by ratio of CPI of the year (j-1) to that of the year (j-2) published by the General Statistics Office of Vietnam in December of the year (j-1) and up to 2,5%/year;
l:	Number of year of payment from Base year (with Base year l =1, i1 = 0).

1.3. Variable prices:

Variable prices of month t and year j (VND/kWh) shall be determined using the formula below:

Where:

:	Means components of variable prices dependent on changes to primary fuel costs of power plant in month t, year j (VND/kWh);
:	Means components of variable prices dependent on changes to secondary fuel costs of power plant in month t, year j (VND/kWh);
:	Means components of variable costs adjusted by other variations of power plants of year j (VND/kWh);
:	Means transportation costs for primary fuel of power plant in month t, year j (VND/kWh).

a) Components of variable prices dependent on changes of primary fuel costs:

Components of variable costs dependent on changes to primary fuel costs of power plant in month t year j  (VND/kWh) are determined using formula below:

Where:

:	Means average heat rate (HHV) of ………… kcal/kWh or kJ/kWh or BTU/kWh or kg/kWh.
:	Means primary fuel costs in payment period determined by weighted average of invoice load in accordance with PPA in the last … months (excluding VAT), in VND/kcal or VND/kJ or VND/BTU or VND/kg; Where fuel transport prices cannot be separated in PPA, primary fuel prices of the payment period shall include primary fuel transport prices.
kHR:	Adjustable factor for average net heat rate regarding actual operating conditions such as coolant temperature, ambient temperature, humidity, load negotiated by the parties or in actual operation from operation cycle to operation cycle;
kHS:	Rate of efficiency drop of year j (%);
l:	Means number of commercial operation years which is rounded down from the commercial operation date of power plant.

b) Components of variable costs depending on changes to secondary fuel costs:

Components of variable costs depending on changes to secondary fuel costs of power plant in month t year j  (VND/kWh) are determined using formula below:

 

Where:

:	Means components of variable costs dependent on changes to secondary fuel costs of power plant in Base year of …… (VND/kWh);
kHS :	Rate of efficiency drop of year j (%);
l:	Means number of commercial operation years which is rounded down from the commercial operation date of power plant;
:	Secondary fuel costs for electricity generation to power plants on payment date of month t and year j determined by weighted average of invoices in accordance with PPA for the period agreed upon by the Seller and the Buyer ……. (VND/kg or kg/kcal or VND/kJ or VND/BTU);
:	Secondary fuel cots for electricity generation in the Base year of …… (VND/kg or VND/kcal or VND/kJ or VND/BTU).

c) Components of variable costs depending on other variations:

Components of variable costs dependent on other changes of power plant in year j  (VND/kWh) are determined using formula below:

Where:

:	Components of variable costs dependent on other changes of power plants in Base year of … (VND/kWh);
kHS :	Rate of efficiency drop of year j (%);
l:	Means number of commercial operation years of power plant (from commercial operation date of power plant where the first commercial operation year starting from the first commercial operation date of the first generator group, l = 1);
m:	Number of year of payment since the Base year (with Base year m =1).
i:	Inflation rates of components of variable costs dependent on other changes according to this Circular.

d) Primary fuel transport costs:

Primary fuel transport costs of power plants in month t, year j  (VND/kWh) are determined using the formula below:

Where:

:	Means average heat rate (HHV) of ………… kcal/kWh or kJ/kWh or BTU/kWh or kg/kWh.
kHR:	Adjustable factor for average net heat rate regarding actual operating conditions such as coolant temperature, ambient temperature, humidity, load negotiated by the parties or in actual operation from operation cycle to operation cycle;
kHS:	Rate of efficiency drop of year j (%);
l:	Number of years since commercial operation of power plant;
:	Means transportation costs for primary fuel at the time of payment of month t and year j calculated by weighted mean of quantity of invoices under fuel transport agreements and LNG storage agreements, gas regasification and distribution contracts (if any) (not including VAT), fuel transport costs in VND/kg or VND/kJ or VND/BTU;

Where components of transport, LNG storage, gas regasification and distribution costs cannot be separated in fuel sale and purchase agreements, primary fuel costs shall include transportation costs for primary fuel. In this case, transportation costs for primary fuel equals 0.

Where primary fuel is not delivered to power plant in the payment month, transportation costs for primary fuel equal transportation costs for primary fuel of the latest ……… month(s) where primary fuel delivery is made;

The Seller has the responsibility to select fuel providers, fuel transport service providers and enter into fuel supply and transport agreements in a manner compliant with Vietnam’s laws and ensuring equality, competitiveness, and transparency.

2. Specific prices:

Slag and ash treatment prices P^TX (not including VAT) are …… VND/kWh.

II. ELECTRICAL PRODUCTION UNDER AGREEMENT

1. Average electrical production in multiple years [at delivery points of power plan] within the term of the Agreement of the Power plant is … (million kWh).

2. Contractual electrical production of year, month, trading cycle confirmed by the Seller and the Buyer in accordance with Regulation on Competitive electricity market.

III. ELECTRICITY PAYMENT UNDER AGREEMENT

III.1. Before commercial operation date

In case of test run and commissioning costs before commercial operations: the parties shall negotiate in accordance with Article 4 of this Circular.

IIII.2. After commercial operation date

1. Where power plant has not participated in competitive electricity market or has indirectly participated in competitive electricity market with periods of non-participation according to decision of competent authority or market intervention:

Electricity payment (R_tt) of power plant is calculated as follows:

R_tt = R_t x (1 + VAT)

Where:

R_t: Means electricity payment of month t and year j and does not include VAT (VND);

R_t = (P_C,j,t x Q_m,j,t + R_k + R_đt + R_Th)

PC,j,t :	Means PPA prices under Section I of this Appendix (VND/kWh);
Qm,j,t :	Means electrical production at delivery points of power plant (kWh);
Rk :	Other costs (VND), including:

Costs paid for generator groups serving test depending on test schedule approved by System and market operators, determined by: (i) Electrical production measured from test generator group throughout duration of the test and (ii) Variable costs defined under Section I of this Appendix;

Adjustable payments (if any) (VND);

Other costs negotiated by the parties.

R_dt: Means total specific costs payable according the Agreement determined by slag and ash treatment costs (P_TX) according to Section I of this Appendix (VND).

R_Th: Means total taxes, fees, amounts payable in the month in accordance with relevant law provisions agreed between the parties (and legitimate instruments) (VND);

VAT: Means value-added tax according to regulations of the Government (%).

Where the Power plant is subject to multiple Agreements between the Seller and the Buyers, amounts payable R_t (not including VAT) shall be determined and distributed by the Seller to the Buyer according to delivered electrical production in the month (billing cycle) published by System and market operator.

On an annual basis, the parties shall settle ash and slag handling costs in accordance with practical situations of the previous year.

2. Where Power plant has officially participated competitive electricity market

2.1. Difference in total amounts payable under Agreement in month t is determined using formula below:

 

Where:

:	Means difference in total amounts payable under Agreement in month t (VND) not including VAT;
D:	Total number of days in the month t;
d:	Billing days in month t;
I:	Total number of billing cycles of trading day d;
i:	Billing cycle i of billing day d;
PC,j,t :	PPA prices under Section I of this Appendix (VND/kWh);
FMPd,i:	Means full market price applied to Electric utility in billing cycle i, day d in month t (VND/kWh);
:	Means contractual production in billing cycle i, day d in month t (kWh).

2.2. Total amounts payable under the Agreement include:

a) Interest of late payment according to Article 8 of the Agreement;

b) Variable amounts payable (if any);

c) Other costs negotiated by the parties.

2.3. Other amounts payable of Power plant [entering into PPA with the Buyer] are determined as follows:

a) Difference in electrical production between electrical production measured in the month and electrical production measured in billing cycles in the month according to regulation on competitive electricity market conforms to rate defined under PPA PC,i,t defined under Section I of this Appendix;

b) Where thermal power generator groups or 1 boiler must be suspended to reduce capacity in accordance with regulation on competitive electricity market:

Amounts payable in this case equal total activation costs corresponding to activation states.

Activation costs corresponding to activation status are negotiated by the parties from ingredients, auxiliary materials, etc. as follows [……].

c) Where Power plant contains test generator groups appropriate to test schedule approved by System and market operator, amounts payable for electrical production produced by Power plant according to regulation on competitive electricity production are determined as follows:

- Test generator groups: Using variable costs under Section I Appendix V of the Agreement;

- Non-test generator groups: Using PPA prices under Section I Appendix V of the Agreement.

d) Where Power plant contains generator groups participating in approved AGC test or other test at request of System and market operator: Amounts payable corresponding to electrical production according to regulation on competitive electricity market are determined by PPA prices under Section I Appendix V of the Agreement;

dd) Other amounts payable according to regulation on competitive electricity market.

Other amounts payable according to regulation competitive electricity market under section 2.3 are allocated to the Buyers by the Seller depending on electrical production delivered in the month (billing cycle) published by the System and market operator.

2.4. Total specific costs payable according the Agreement determined by slag and ash treatment costs (P^TX) according to Section I of this Appendix (VND).

Total specific costs pay able under section 2.4 are calculated and allocated to the Buyers by the Seller depending on proportion of electrical production delivered in the month (billing cycle) published by the System and market operator.

2.5. Monthly electricity payment is determined by:

R_tt = (R_TT,t + R_C,t + R_C,k,HD+ R_C,k,TT + R_đt + R_Th) x (1+VAT)

Where:

RTT,t:	Total market payment according to monthly payment schedule provided by System and market operator (VND);
RC,t:	Total difference in electricity payment under Agreement in month t (VND) determined by Clause 2.1 of this Section (VND);
RC,k,HD:	Total other amounts payable according to the Agreement (VND) determined by Clause 2.2 of this Section;
RC,k,TT:	Total other electricity payment in accordance with regulations on competitive electricity market (VND) determined under Clause 2.3 of this Section;
Rđt:	Total specific costs payable in the month according to the Agreement determined by Clause 2.4 of this Section (VND);
RTh:	Total taxes, fees, and amounts payable in the month in accordance with relevant law provisions calculated and allocated to the Buyers by the Seller depending on proportion of electrical production delivered in the month (legitimate instruments attached) (VND);
VAT:	VAT: Means value-added tax determined by regulations of the Government (%).

On an annual basis, the parties shall settle ash and slag handling costs in accordance with practical situations of the previous year.

2.6. Foreign exchange differences (FED): On an annual basis, the Seller and the Buyer shall calculate and negotiate payment plan for exchange rate differences on the basis of total capital loan in foreign currency, repayment plan for loan in foreign currency, data on actual principal repayment, exchange rate agreed upon by the Seller and the Buyer in electricity generation service pricing, and exchange rate of the previous year.

FED rates (VND) is calculated using the formula below:

Where:

m:	Number of types of foreign currency in electricity generation service pricing agreed upon by the Seller and the Buyer (type);
n:	Number of principal repayment of foreign currency i in year of calculation (time);
Di,j:	Number of principal loan in foreign currency i paid in installment j in year of calculation;
:	Exchange rate in installment j of foreign currency i in the year (.../VND);
:	Base exchange rate of foreign currency i agreed upon by the Seller and the Buyer in electricity generation service pricing (…/VND);
VAT:	Means value-added tax determined by regulations of the Government (%).

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

 

Appendix VI

PRIMARY PARAMETERS IN CALCULATION OF ELECTRICITY GENERATION PRICES

(Attached to the Agreement No. ____ , dated ____)

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

 

Appendix VII

PROJECT SCHEDULE

(Attached to the Agreement No. ____ , dated ____)

I. PROJECT SCHEDULE

1. Official construction commencement date of Power plant: […]

2. Initial date of interconnect test: […]

3. Initial energizing date: […]

4. Test date: […]

5. Commercial operation date of generator group i: […]

6. Commercial operation date of Power plant: […]

II. DOCUMENTS TO BE PROVIDED TO THE BUYER BY THE SELLER

The Seller has the responsibility to provide the Buyer legitimate copies of documents to recognize commercial operation date as follows: […].

[The parties shall have the right to negotiate amendment in accordance with Vietnamese laws]

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