Vietnam’s state-owned utility Vietnam Electricity has proposed a significant cut in payments to 173 renewable energy projects, a move that could reshape the country’s clean energy sector. The proposal is aimed at resolving a long-running dispute worth about $13 billion involving several wind and solar power developers.
The issue is linked to Vietnam’s earlier feed-in tariff (FiT) policy, which offered high and guaranteed prices for renewable energy over a 20-year period. This policy successfully attracted both domestic and international investors, helping the country rapidly expand its renewable energy capacity. However, a government review conducted in 2023 found that many projects had started operations without securing a required document known as a Construction Completion Acceptance (CCA) certificate.
Due to the absence of this certificate at the time of commissioning, EVN now argues that these projects should not have been eligible for the full FiT rates during their initial operational phase. As a result, the utility has proposed reducing payments by up to 43% for electricity generated before the projects obtained their CCA approvals. Instead of the previously agreed FiT rates, developers would receive a lower “transitional tariff” for that period.
In addition to lowering tariffs, EVN also plans to recover excess payments that were already made to developers. The repayment would be structured in monthly installments, adding further financial pressure on project owners. The proposal impacts around 12 gigawatts of renewable energy capacity and includes several major international investors such as Sembcorp and SP Group.
Despite the financial implications, many developers appear willing to accept the revised terms. After years of uncertainty and delayed payments, companies are showing a practical approach, preferring a resolution that allows them to stabilize operations, manage debts, and secure regular cash flow for the remaining contract period.
Industry experts, however, have raised concerns about the broader impact of such retroactive policy changes. They warn that revising agreed terms after projects are operational could affect investor confidence and create hesitation among future foreign investors. This comes at a time when Vietnam is actively working to expand its renewable energy sector and reduce reliance on fossil fuels.
While the proposal offers a possible path to settle a complex financial dispute, it also highlights the importance of clear regulations and consistent policy enforcement. A final decision from the government is still awaited, which will determine how the situation is resolved and how the country’s renewable energy market moves forward.
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