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Scada Agreement Vietnam

1 Circular No. 02/2019/TT-BCT of the Ministry of Industry and Trade on the implementation and development of wind projects and a wind power purchase contract (“Circular 02”). 2 MOIT Circular No. 32/2012/TT-BCT of 12 November 2012 relating to the wind project development procedure and modelling AAEs for wind projects (“circular 32”). 3 INFORMATION LETTER NO 3078/EVN-KH of 25 June 2018 regarding the implementation of grid connection contracts for solar and wind energy projects in Vietnam. Effective February 28, 2019, Circular No. The Ministry of Industry and Trade of Vietnam (MOIT) has just issued a new circular No. 18 (“Circular 18”), which replaces Circular 16 and provides detailed guidelines for the development of solar power projects in Vietnam. This followed the Prime Minister`s decision No. 132 on the new editions of solar electricity. Circular 18 will come into effect on 31 August 2020 and includes new guidelines for the extension of solar power plants and rooftop solar installations.

In addition, new forms of air contracting (“new DEPP models”) are being introduced: one for grid-connected solar farms and another for rooftop-connected solar installations, which clarify and update previous models (previous ppa). While some of the changes made are seen as positive developments by investors and lenders, a number of critical risk allocation and uncertainty design issues remain. The main changes and problems are summarized below. In addition, with respect to solar electricity projects, 90 (90) days before the proposed cod under Annex B of the PPP, the project company, as an electricity seller, is required to submit its plans to commission and control the commissioning of the plant, in accordance with the rules, technical and technological standards applicable to the EVN solar power plants, 90 (90) days before the coding proposed in accordance with Schedule B of the AEA, so that the parties are able to present the performance to be produced during the review of the commissioning of the power plants. Under the new PPA model, if the failure of the electricity purchaser results in the end of the AAEs by the electricity purchaser, the amount of the termination is the damage (i.e. the actual and direct loss) suffered by the electricity seller until the end of the contract term. However, it is not entirely clear whether “the end of the term of the contract” refers to the period up to the early closing date of the AAE or the end of the initial 20-year AAE period. Any interpretation can have different legal effects and have a significant difference in the amount of termination/compensation.

From an electricity vendor`s perspective, this still raises concerns about the allocation of risks, namely that such a limited termination payment may not be able to cover the electricity vendor`s investment costs, outstanding debts and expected return on equity. This provision may raise concerns about EVN`s limited liability in the event of an early termination of the AEA, particularly in the early years of the 20-year AAE period, as well as the potential for delays in energy payments or the loss of other AAEs by EVN.