2018 StoxPlus Vietnam Renewable Energy 2018 Demo

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Abbreviation
NO . WORD STANDS FOR
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Abbreviation
NO . WORD STANDS FOR
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Table of Contents
PART CONTENT PAGE PART CONTENT PAGE
Executive Summary 5 4 Risk Assessment 57

1 Overview of Vietnam Power Sector 8 5 Investment Opportunity Analysis 61
1.1 Vietnam’s Electricity Sector 9 5.1 Key Investment Considerations 62
1.2 Power Market Structure 17 5.2 Opportunities for Financial Investors 65
2 Analysis of Renewable Energy Industry 19 5.3 Opportunities for Foreign Developers 66
2.1 Renewable Energy Overview 20 Appendices 67
2.2 Wind 24 A1 Typical wind projects by local developers 68
2.3 Solar 33 A2 Typical solar projects by local developers 69
2.4 Biomass 41 A3 Recent renewable energy deals in Vietnam 70
2.5 Small Hydropower 47
3 Review of Regulatory Framework 51
3.1 Master Power Plan VII Revised 52
3.2 Investment Incentives 53
3.3 Feed-in Tariff & Power Purchase Agreement 54
3.4 Building a Competitive Power Market 56
4
Executive Summary
In 2017, Vietnam continues its growth The development of RE in Vietnam, although
trajectory with GDP increase of 6.81% YoY. highly encouraged by the government, faces
The country is going through an financing obstacles as well as counter-party risks
industrialization process, pushing for given the existing policy framework. Some of
increased exports and output from key, these will be highlighted in the upcoming pages,
energy-intensive industries. As a result, as well as examples of mitigation measures and
Vietnam is hungry for more energy and specific case studies, learned via our in-depth
constantly seeks a sustainable, long term interviews with developers and policy makers.
and effective solution to its future power
This publication hopes to aid you in the decision
supply problem. As technology advances
making process and talks with local developers as
and investment costs go down, Renewable
well as local authorities. The RE industry in
Energy (RE) emerges as a viable answer.
Vietnam is still relatively new and will go through
At the moment, RE is still at an early stage. many leaps and changes, and the early movers
The total output from RE amounts to about may be the ones that reap the most from the
5% of the total country’s supply. The policy exciting growth and dynamics.
framework has only been constructed since
2011 and has recently included solar power.
However, Vietnam has high ambitions with
RE, as shown in the Revised National Power
Master Plan VII, released in March 2016. The
Plan stipulated that 21% of the total energy
supply comes from RE sources. As plans for
a nuclear power plant was already rejected
by the National Assembly, the country is
pushing for more alternatives to its energy
hunger. Foreign investors are especially
welcome, where there is no Foreign
Ownership Limit and many attractive tax
incentives.
RE, by nature, is dependent on the
available resources and potential. As a
agricultural, near-the-equator, long-
coastline country, Vietnam does not lack
biomass feedstocks, solar radiation nor
wind power density. The question turns to
whether the country is able to take
advantage of what nature has given, and
turn the theoretical and technical potential
into commercial potential.
5
Executive Summary
3) Renewable energy in Vietnam is in its 4) WIND - 80 wind power projects are in 5) SOLAR - The installed capacity in
early stage, with plenty of potential for registration but only 5 are connected to registration is 20 times the planned
development especially in the wind and grid, covering only 23.7% of 2020 target capacity in National Power Master Plan,
but not all of the projects are expected
solar segments
Renewable Energy Output in Vietnam (million MWh) Wind Capacity and Number of Projects, March 2018
to come to fruition
Current Status of Solar Power Development in
Vietnam
3,302
17,364
Capacity (MW)
Installed
24
23
21
8
17
1,447 In operation In registration
2008 2009 2010 2011 2012 2013 2014 2015 2016 1,241 1,304
Solar • Solar projects are relatively easier to install

1%
6 and requires lower investment cost
Other sources 189 • The FiT for solar projects are high at
(small Wind
hydropower, 39%
9.35UScents/kWh, but deadline to take
etc.)
50% advantage of high FiT is near (30 June 2019)
Geothermal, Biomass and 6) BIOMASS - Local developers account for

Other
10% the majority of the projects of biomass,
while foreign players have limited
presence and in small scale projects
Resources Actual Potential
Installed Capacity (MW) Biomass Capacity by Ownership Structure, March
Capacity 2018
(MW) Capacity (MW) No. of Projects
Wind 189.2 26,763
(technical) Local,
• Investment costs per kWh are going down as 82%
Solar 8 7,140 Foreign,
(commercial) energy efficiency of wind turbines increase 5%
Joint
• The FiT for wind projects has no deadline and
Small 1,648 7,000 Venture
Hydropower (technical)
is expected to be revised soon , 6%
Others,
7%
Biomass 270 318,630
(theoretical)
6
Executive Summary
Top 10 Provinces with Highest planned 8) Starting 2011, the fixed Feed-in Tariff Operational Risk
capacity for Biomass, March 2018
has been used as a policy tool to show • Complex and lengthy RE master planning and
investment incentives and ensure the licensing processes
145 Capacity (MW) No. of Projects • The aggregate output of RE power in one
9 benefits for RE investors; however with a
115 concentrated area could overload the local
99 non-negotiable PPA, projects face
90 transmission line
financing problems Financing Risk:
4 48 40 Tariffs for energy from RE (Uscents/kWh)
3 27 26 3 21 • All the above risks, together with non-
2 2 2 2 20 2 negotiability, result in the PPA being hardly
1 Solid Waste (FiT) 10.05
bankable
Biomass (electricity… 7.46
10) In certain cases, project developers could
Biomass (co-… 5.8 still obtain loans from international bankers.
The banks require some kinds of guarantees
Wind (near shore, FiT) 9.8
(Government guarantee (for ODA loans), corporate
• Given the scattered supply of biomass Wind (onshore, FiT) 7.8 guarantees from project owners) or engage a
wastes, the biomass energy plant locations Solar (FiT) 9.35 Vietnam State Owned Bank in a syndicated loan
are also scattered and of small scale below where there is at least one local authority to
30MW 9) Most of the PPA terms pose serious legal exercise the rights to assets in Vietnam before
• However, low cost of input leads to lower and commercial risks to investors and approving the loan.
production cost. Biomass projects are developers, therefore rendering the 11) There are many local RE developers with
profitable even when the FiT is much lower weak financial health and/or no or little
contract un-bankable and a financing risk
compared to other types of RE. technical know-how looking for foreign
Legal Risk:
partners
• Dispute resolution is without provision on
7) Small Hydropower - Small Expected Foreign partner’s contributions often are:
international arbitration or a neutral forum law
Hydropower (SHP) is not favorable in • Technical support including know-how, technology,
• No stabilization clause against unfavorable
engineering designs, selecting EPC
Vietnam due to its environmental change of
• Financing support including low cost international
damage and unable to manage water Commercial Risk:
funding, backed up by corporate guarantees (if
dams • Uncertainty regarding FiT price after the
required)
• Although many SHP projects have been existing FiT’s expiration on 30 June 2019 for
• Management support including project
approved, they are stalled as the solar projects
construction, installation, operations and
conversion of forest lands to SHP project • FiT is non-inflation adjusted, fixed for 20 years
maintenance expertise
lands was stopped when the Prime Minister • Seller bears the responsibility of connecting
12) Common deal structure includes the
gave the directive during the National power plant with transmission grid
Counter Party Risk changing of ownership and legal entity as the
Conference on Forestry Protection and
Management on 14 October 2017. • EVN’s offtake obligations and credit-worthiness project progresses, and entry could be done
via private placement or joint development.
7
Contents
Section 1: Overview of Vietnam Power Sector
1.1 Vietnam’s Electricity Sector
1.2 Power Market Segments
8
The Ministry of Industry and Trade, or MoIT, is responsible for formulating electricity
plans and regulations, resolving disputes, as well as creating a competitive power market
Figure 1: Institutional Framework of the Electricity Sector in Vietnam
Government of Vietnam
Ministry of Industry and Trade

EVN (Vietnam Electricity) is a
state-owned economic group,
contributing up to 61.4% of
national power installed
capacity (2016) and
Electricity Regulatory Electricity and Renewable dominating the entire
Authority of Vietnam (ERAV) Energy Authority electricity transmission,
distribution and retail process
in Vietnam.
National Electricity OWNED

Independent Power National EVN NPC EVN
Private Load Power
power plants Power EVN CPC HANOI AND
compa Dispatch Trading
nies
producers under
Centre Transmission Company
EVN SPC EVN OPERATED
(IPP) EVN (NPT) HCMC BY EVN
(NLDC) (EPTC)
GENERATION TRANSMISSION & DISTRIBUTION RETAIL CONSUMERS

Generation
Source: StoxPlus
9
Key electricity generators include EVN, PV Power and Vinacomin, where the state owns
the majority of shares
Figure 2: Market Share of Key Players in Vietnam Energy Market, 2011-2016
CONTROL xx% MARKET SHARE

2016 Key Domestic Independent
Big 3 Energy Corporations
EVN Power Producers
PetroVietnam
2011 Vinacomin
Key Foreign Players (BOT)
BOT and
other
investors
10
1.1 Vietnam’s Electricity Sector DEMAND
Vietnam’s electricity power consumption is expected to grow at CAGR of xx% during 2015-
2030, buoyed by strong economic growth and improved standards of living
Figure 3: Vietnam’s Electric Power Consumption - Actual And Figure 4: Historical Annual Growth of Electricity Consumption in
Projected 2015-2030 (million MWh) Selected Countries 2008-2014 (%)
Myanmar
Vietnam
China
India
Indonesia
Malaysia
Thailand
Philippines
Singapore
2015 2017 2019F 2021F 2023F 2025F 2027F 2029F
11
Industry & Construction Sector is expected to remain its leading position in power
consumption, while households reduce their share thanks to better energy efficiency
Figure 5: Breakdown of Power Consumption by Sector (TWh) – Current and Forecasted 2016-2035F
12
Key energy-intensive industries are growing at xx%
Figure 6: Sample Energy Audit Results 2016 for a company in Figure 7: xx production of Vietnam
Key Sectors (kWh/year)
Textile
Paper
Rubber
2010 2011 2012 2013 2014 2015 2016 E

Garment
Figure 8: xx production of Vietnam
Plastics
Packaging
Port & Container
2010 2011 2012 2013 2014 2015 2016 E
13
1.1 Vietnam’s Electricity Sector SUPPLY
Power supply and output is expected to increase at xx% over 2015-2030
Figure 10: Vietnam’s Electric Installed Capacity– Actual and Projected Figure 11: Vietnam’s Electric Power Output – Actual and Projected
2015-2030 (Thousands MW) 2015-2030 (Billion kWh)
700
700
600
600
500
500
400
400
300
300
200
200
100 100
0 0
2015 2017 2019F 2021F 2023F 2025F 2027F 2029F 2015 2017E 2019F 2021F 2023F 2025F 2027F 2029F
14
1.1 Vietnam’s Electricity Sector SUPPLY
Strong FDI in electricity generation and distribution in 2017, driven by expected energy
demand to support the developing economy and the issuance of solar energy incentives
Figure 12: Breakdown of registered FDI capital by Sector, 2015-2017
Total Registered Capital (USD mn) Number of Projects
25,000
20,000
15,000
10,000
5,000
2015 2016 2017
15
Contents
16
The Revised National Power Master Plan 7 plans for increasing contribution of coal and
renewables in the country’s energy mix, whilst reducing that of hydropower and gas
Figure 13: Breakdown of Power Generation Installed Capacity (MW) by Resources Type, 2013-2030F
HISTORICAL PLANNED
Note: “Diesel and Renewables” becomes “Renewables” from 2020
2013 2014 2015 2016 2020 2025 2030
Hydropower Coal fired power Gas fired power Diesel and Renewables Oil fired power Import Nuclear power
Source: StoxPlus
Note: Since Small Hydropower (SHP) was classified as Renewable energy in 2013, SHP installed capacity has been subtracted from Hydropower segment and moved to Diesel & Renewables
17
While hydro and gas power are reaching their full potential, and renewables are still in
early stages, coal is a fast fix as the country still hungers for more electricity short-term
PLANNED CAGR
HYDROPOWER (INCL. SMALL HYDRO) 2020-2030
2 0 1 6
M I X
COAL FIRED
S U P P LY
GAS FIRED
P O W E R
RENEWABLES - WIND, SOLAR, ETC.
18
Contents
Section 2: Analysis of Renewable Energy Industry
2.1 Renewable Energy Overview
2.2 Wind
2.3 Solar
2.4 Biomass
2.5 Small Hydropower
19
The majority of renewable energy projects in Vietnam are stuck at the pre-investment
stage, and it takes long months and multiple agreements to go through each stage
Figure 14: Renewable Energy Project Investment Process, based on survey of actual project developers
Project
Pre- Project
Design and Operation &
Investment Land Lease Construction Decommis-
Feasibility Maintenance
Stage sioning
Study
1
20
Renewable energy in Vietnam has been rapidly developing from a small base for the last
ten years, but still in its early stage with plenty of potential capacity unrealized
Figure 15: Renewable Energy Output in Vietnam (billion kWh), 2008- Figure 16: Breakdown of Renewable Energy Supply in Vietnam, 2016
2016
0.62
Solar
1%
0.44
Wind
0.30 Other sources (small 39%
0.29 0.29 0.29
hydropower, etc.)
0.21 50%
0.14
0.11
Geothermal,
Biomass and Other
2008 2009 2010 2011 2012 2013 2014 2015 2016 10%
Source: StoxPlus from BP Statistical Review of World Energy 2017
Resources Actual Installed Capacity (MW) Potential Capacity (MW)

Wind
Solar
Small Hydropower
Biomass
21
To fully realize its RE potential, Vietnam’s government has been completing the regulatory
and policy frameworks for each type of RE as well as development strategies until 2050
Figure 17: Locations of RE projects per the The development of regulatory framework for renewable energy sources
Revised Master Plan VII
The Development Strategy of Renewable Energy 2030-2050

per Decision NO. 2068/QD-TTg, effective 25 November 2015
Location of
RE projects
Source: StoxPlus
22
TOTAL POWER
OUTPUT
BREAKDOWN
TOTAL RE 2015 2020 2030 2050

OUTPUT
SOLAR
OUTPUT
WIND
OUTPUT
BIOMASS
OUTPUT
HYDROPOWER
OUTPUT
Inc. traditional hydropower
23
Contents
2.1 Renewable Energy Potential and Development
2.2 Wind
2.3 Solar
2.4 Biomass
24
2.2 Wind – Current situation
Currently, there are xx wind power projects in registration but only xx came onstream
with total capacity of xx MW, covering xx% of the wind power development target until
2020
Figure 18: Timeline of Wind Project in Vietnam, 2012-2017
2012 2012 2013 2016 2017 2017

OPERATIONAL
YEAR
PROJECT NAME
LOCATION
INSTALLED
CAPACITY
PROJECT
DEVELOPER
Source: StoxPlus
25
2.2 Wind – Current situation
More wind projects have been restarted with a view of securing a new, more profitable
FiT once they become commercially operational
Figure 19: Near-term prospect of Planned Wind Project in Vietnam, 2018
2018 2018 2018 2018 2018 2021

(EXPECTED)
OPERATIONAL
YEAR
PROJECT NAME
LOCATION
INSTALLED
CAPACITY
PROJECT
DEVELOPER
Source: StoxPlus
26
2.2 Wind – Current situation StoxPlus Database
Many wind power projects, although announced, have not reached the construction phase
as investors realize their profitability are not guaranteed with the current low FiT
Figure 20: Breakdown of Wind Capacity and Number of Projects by Project Status [Selected Local Players in Vietnam]
Source: StoxPlus Database as of March, 2018. From StoxPlus Database
27
Figure 21: Breakdown of Wind planned capacity by Ownership
Capacity (MW) No. of Projects

LOCAL
Capacity: xx MW
No. of Projects: xx
Local
Foreign

Others
Joint
Venture
In partnership
with local
developers
Source: StoxPlus Database as of March, 2018
28
Figure 22: Breakdown of Number of Wind Projects by planned Figure 23: Top 10 Provinces with Highest planned capacity for Wind
capacity Range
NA
Over 200MW
101-200MW Under 30MW
51-100MW
30-50MW

Source: StoxPlus Database as of March, 2018 Source: StoxPlus Database as of March, 2018
29
2.2 Wind – Potential & Development
Wind speed should be above 6m/s for a wind power project, which gives Vietnam a high
technical potential of xx GW and above-average power density at all levels of height
Figure 24: Wind Speed Map of Vietnam (100m height) Figure 25: Wind Resources Potential in Vietnam, 2011-2017
Figure 26: Wind Power Density and Speed, Vietnam vs. Global
30
2.2 Wind – Technology & Application
Wind turbines’ energy output efficiency are increasing while costs to produce 1 kWh are
going down worldwide
Figure 27: Cluster of Onshore Wind Turbines and Applications, 2017
Small scale Large and utility scale
Power rate
Hub height
Rotor
diameter
Deployment
in
Viet Nam
Key suppliers
in Vietnam
Levelized Cost of Electricity (LCOE) *

= Sum of costs over lifetime/ Sum of electricity produced
(sold) over lifetime of the project
* Including investment, O&M, and fuel expenditures
31
2.2 Wind – SWOT
SWOT Analysis / Key Takeaways

Wind power
S W
SWOT
ANALYSIS
O T
32
Contents
2.2 Wind
2.3 Solar
2.4 Biomass
33
2.3 Solar – Current situation
The installed capacity in registration is xx, but not all of the projects are expected to
come to fruition
Figure 28: Current Status of Solar Power Development Figure 29: Top 10 Provinces with Highest planned capacity, 2017
in Vietnam, 2017
Installed Capacity (MW)
In operation In registration
Registered Capacity (MW) No. of Projects
34
2.3 Solar – Current situation StoxPlus Database
Approximately a hundred of solar projects have been registered by March 2018- most of
them are still on paper, xx have started construction, and xx has been operational
Figure 30: Breakdown of Solar Capacity and Number of Projects by Project Status
[List of Solar Projects Under Construction]

Pre-investment Project Design Construction Others

stage and Feasibility
Study
35
Figure 21: Breakdown of Solar planned capacity by Ownership

LOCAL
Capacity: xx MW
No. of Projects: xx
Local
Foreign

Others
Joint
Venture
In partnership
with local
developers
36
Solar projects are concentrated in the Central and Southern provinces where there is
strong solar radiation
Figure 32: Breakdown of Number of Solar Projects by planned Figure 33: Top 10 Provinces with Highest planned capacity for Solar
capacity Range
NA
Over 200MW
101-200MW Under 30MW
51-100MW
30-50MW
Source: StoxPlus Database asCapacity (MW)

of March, 2018 No. of Projects
37
2.3 Solar – Potential & Development
Vietnam is ranked xx worldwide regarding solar potential and has a commercial potential
of at least xxGW
Figure 34: Vietnam Photovoltaic Power Potential, 2017 Figure 35: Potential of Solar Energy in Vietnam
Theoretical
Technical Commercial
38
2.3 Solar – Technology & Application
Overall, investment costs in solar is on a decline, although quality and prices vary and
there is no strict standard on solar panel quality
Figure 36: Global LCOE (USD/kWh) of Solar Photovoltaic, 2010 vs. 2017 KEY SUPPLIERS
• xx
TECHNOLOGY AND APPLICATION
• xx
TRENDLINE
• xx
39
2.3 Solar – SWOT

Solar power
S W
SWOT
ANALYSIS
O T
40
Contents
2.2 Wind
2.3 Solar
2.4 Biomass
41
2.4 Biomass – Current situation StoxPlus Database
Biomass utilizes ready and available agricultural and sugar cane wastes, with more
projects already in operations compared to wind or solar
Figure 38: Breakdown of Biomass Capacity and Number of Projects by Project Status
[Sample of Typical Biomass Projects In Operation]
Installed
Ownership
Project Name Capacity Project Developer Province
Structure
(MW)
Pre-investment Project Design Construction Operation & Others

stage and Feasibility Maintenance
Study
42
xx
Figure 39: Breakdown of Biomass Capacity by Ownership Structure, 2017
LOCAL Capacity (MW) No. of Projects
Foreig
n
Local
Korea India Singapore Finland
Joint
Ventur
Otherse
In partnership
with local
developers Japan Korea Malaysia
43
xx
Figure 40: Breakdown of Number of Biomass Projects by planned Figure 41: Top 10 Provinces with Highest planned capacity for
capacity Range Biomass
Over 200MW NA
51-100MW
30-50MW
Under 30MW
Gia Lai Khanh Dak Phu Tay Phu Ho Chi Can Binh An
Hoa Lak Yen Ninh Tho Minh Tho Duong Giang

Source: StoxPlus Database as of March, 2018 Source: StoxPlus Database as of March, 2018
44
2.4 Biomass – Potential & Development
Biomass input materials such as bagasse are relatively cheap to buy and convert to
energy, but biomass developers face higher competition from other buyers and vice versa
Figure 42: Vietnam Biomass Potential Capacity, 2017
TECHNOLOGY AND APPLICATION
Potential sources Million tons oil equivalent Converted to MW
• xx
Wood
Agriculture wastes TRENDLINE
• xx
Domestic animal
wastes
Garbage
Organic waste
TOTAL
Figure 43: Key Biomass Projects in Vietnam, 2016-2018
Source: StoxPlus, Vietnam Sugar Association
45
2.4 Biomass – SWOT

Biomass power
S W
SWOT
ANALYSIS
O T
46
Contents
2.2 Wind
2.3 Solar
2.4 Biomass
47
2.5 Small Hydropower - Current situation
Most of Small Hydropower (SHP) projects are small scale, and has negative environmental
impacts on forest lands
Figure 44: Current Projects by Status (2018)
The definition of Small Hydropower (SHP) in Vietnam
is confined to hydropower projects of up to 30 MW
(Decision No. 3454/QD-BCN dated 18 October 2005)
• xx
Operation Under construction

Figure 45: Current Projects by Capacity (2018)
20-30MW
10-20MW
Under 10MW
Source: StoxPlus from “World Bank via ENERGYDATA.info, under a project funded by the Energy Sector Management Assistance Program (ESMAP). For more information: Vietnam - Small Hydro GIS Atlas, 2017
48
2.5 Small Hydropower - Current situation
Small Hydropower (SHP) is not favorable in Vietnam due to its environmental damage and
inability to manage water dams
Figure 46: Potential Projects by Status (2018)
“SHP projects are small but highly damaging to the
forest, when re-forestation has not progressed much.
We have to decisively moderate the development of
SHP.” – Prime Minister on 14 October, 2017
Preparation Planning
Figure 47: Potential Projects by Capacity (2018)
20-30MW
10-20MW
Under 10MW
Source: StoxPlus from “World Bank via ENERGYDATA.info, under a project funded by the Energy Sector Management Assistance Program (ESMAP). For more information: Vietnam - Small Hydro GIS Atlas, 2017
49
2.5 Small Hydropower – SWOT

Small Hydropower
S W
SWOT
ANALYSIS
O T
50
Contents
Section 3: Review of Regulatory Framework
3.1 Master Power Plant VII Revised
3.2 Investment Incentives
3.3 Feed-in Tariff & Power Purchase Agreement
3.4 Competitive Power Market
51
3.1 Master Power Plant VII Revised
Master Power Plant VII Revised prioritized the development of RE up to 7% in 2020 and
above 10% in 2030, especially solar, wind and biomass
Figure 48: Breakdown of Renewable Energy by Sources (MW & Percentage), 2016-
2030
Hydropower Wind Biomass Solar
2016 2020 2025 2030
Resources 2020 2025 2030
Hydropower
Wind (onshore +
offshore)
Biomass
Solar
52
3.2 Investment Incentives
Furthermore, incentives such as offtake agreements in the form of Power Purchase

Agreements (PPA), tax exemptions and CITs are also given to developers of RE projects
Figure 49: Given Incentives for Renewable Energy Sector
53
Starting 2011, the fixed Feed-in Tariff has been used as a policy tool to show investment
incentives and ensure the benefits for RE investors
Figure 50: Development Timeline of incentive framework
FiT for Solar
FiT for Wind FiT for Biomass
Decision 37/2011/QD-TTg Decision 24/2014/QD-TTg Decision 11/2017/QĐ-TTg
FiT for Solid Wastes Today

Decision 31/2014/QD-TTg
2011 2012 2013 2014 2015 2016 2017 2018
Circular 32/20114TT-BCT
Avoided Cost Circular 44/2015/TT-BCT
Circular 32/2011/TT-BCT Tariff for Small PPA for Biomass
PPA for Wind Hydropower Circular 16/2017/TT-BCT
PPA for Solar
Circular 32/2015/TT-BCT
PPA for Solid Wastes
Figure 51: Feed In Tariff for renewable energies (US cents/ kWh)
Solar (FiT)
Wind (onshore, FiT)
Wind (near shore, FiT)
Biomass (co-generation, FiT)
Biomass (electricity…
Solid Waste (FiT)
54
The Power Purchasing Agreement has been developed since 2011 and is a standardized,
non-negotiable contract for generators and buyers of renewable energy
55
3.4 Competitive Power Market
To encourage more competition and efficiency in the electricity sector, the government
plans to gradually open up the market for generators, and then wholesalers and retailers
Figure 52: Timeline For Vietnam Competitive Power Market
Vietnam Competitive Vietnam Wholesale Vietnam Retail

Generation Market Electricity Market Electricity Market
(VCGM) (VWEM) (VREM)
Pilot Full Pilot Full Pilot Full

Operation Operation Operation
2012 2015 2019 2021 2023
WE ARE HERE
56
Contents
Section 4: Risk Assessment
57
Section 4: Risk assessment
The PPA is un-bankable as it poses serious legal and commercial risks to both lenders and
developers, who have to seek other ways to back up loans
No Risk Impacted Description Implications Mitigation Measures
Segment
1
58
Project developers are advised to get the projects running as soon as possible and to
choose a trustworthy local partner to prevent possible complications
Segment
2
5 •
59
Operational risks could be mitigated by investments in quality equipment and an energy

storage system for output moderation
Segment
6 • •
60
Contents
Section 5: Investment Opportunity Analysis
5.1 Key Investment Considerations
5.2 Common Deal Structure
5.3 Opportunities for Financial Investors
5.4 Opportunities for Foreign Developers
61
5.1 Key Investment Considerations – Selecting the Right Local Partner
The selection process of a local counterparty should include careful examinations of

relationship, management team, financial health and RE know-how/expertise
Key considerations Measures to address the issues

1.
2.
3.
4.
62
5.1 Key Investment Considerations - Significant hands-on assistance from foreign partner
Significant hands-on assistance from foreign partner is required to complement the local
developers’ weaknesses in terms of technical know-how and limited financing
63
5.2 Common Deal Structure
Common deal structure includes the changing of ownership and legal entity as the
project progresses, with each party building on its unique strengths
Ownership
Legal
Expected
Roles
64
5.3 Opportunities for Financial Investors
Currently, there are at least two local renewable energy groups considering to raise
fund to finance their growth
Profile
Project Portfolio
Project Location
Fund raising requirements
65
5.4 Opportunities for Foreign Developers
Examples of local developers who lack financing and technical know-how looking foreign
partners to team up
Profile
Project Portfolio
Project Location
Fund raising requirements
66
Contents
Appendix
Appendix 1. Typical wind projects by local developers
Appendix 2. Typical solar projects by local developers
Appendix 3. Recent renewable energy deals in Vietnam
67
Appendix
1. Typical wind projects by local developers
No. Project Name Project Developer Installed Province Investment Project Status
Capacity Capital
(MW) (USD mn)
10
68
Appendix
2. Typical solar projects by local developers
No. Project Name Project Developer Installed Province Investment Project Status
Capacity Capital
(MW) (USD mn)
10
69
Appendix
3. Recent renewable energy deals in Vietnam
Deal's Installed Deal Size

No. Date Target Seller/ Issuer Acquirer Ownership Notes
Capacity (MW) (USD mn)
1
70
Appendix: Recent RE Transactions in Vietnam
71
Appendix: Recent RE Transactions in Vietnam
72
Do you have further inquiries or comment?
Please contact the team at StoxPlus
Dong Le
Head Office
Director
+84 (0) 43562 69 62
5th Floor, Anh Minh Building
+84 (0) 912 057 529
36 Hoang Cau Street
dong.le@stoxplus.com
Hanoi, Vietnam
+ 84 (4) 3562 6962
Dung Vu
Senior Market Analyst Ho Chi Minh City Branch
+84 (0) 43562 69 62
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2018 StoxPlus Vietnam Renewable Energy 2018 Demo

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PART CONTENT PAGE PART CONTENT PAGE

Executive Summary 5 4 Risk Assessment 57

Solar • Solar projects are relatively easier to install

Geothermal, Biomass and 6) BIOMASS - Local developers account for

Section 1: Overview of Vietnam Power Sector

1.1 Vietnam’s Electricity Sector

1.2 Power Market Segments

Ministry of Industry and Trade

National Electricity OWNED

GENERATION TRANSMISSION & DISTRIBUTION RETAIL CONSUMERS

CONTROL xx% MARKET SHARE

2015 2017 2019F 2021F 2023F 2025F 2027F 2029F

Key energy-intensive industries are growing at xx%

2010 2011 2012 2013 2014 2015 2016 E

Port & Container

2010 2011 2012 2013 2014 2015 2016 E

Power supply and output is expected to increase at xx% over 2015-2030

Total Registered Capital (USD mn) Number of Projects

2015 2016 2017

Section 1: Overview of Vietnam Power Sector

1.1 Vietnam’s Electricity Sector

1.2 Power Market Segments

2013 2014 2015 2016 2020 2025 2030

RENEWABLES - WIND, SOLAR, ETC.

Section 2: Analysis of Renewable Energy Industry

2.1 Renewable Energy Overview

2.5 Small Hydropower

Resources Actual Installed Capacity (MW) Potential Capacity (MW)

The Development Strategy of Renewable Energy 2030-2050

TOTAL RE 2015 2020 2030 2050

Section 2: Analysis of Renewable Energy Industry

2.1 Renewable Energy Potential and Development

2.5 Small Hydropower

2012 2012 2013 2016 2017 2017

Figure 19: Near-term prospect of Planned Wind Project in Vietnam, 2018

2018 2018 2018 2018 2018 2021

Source: StoxPlus Database as of March, 2018. From StoxPlus Database

Figure 21: Breakdown of Wind planned capacity by Ownership

Capacity (MW) No. of Projects

Capacity (MW) No. of Projects

101-200MW Under 30MW

Capacity (MW) No. of Projects

Small scale Large and utility scale

Levelized Cost of Electricity (LCOE) *

SWOT Analysis / Key Takeaways

Section 2: Analysis of Renewable Energy Industry

2.1 Renewable Energy Potential and Development

2.5 Small Hydropower

Registered Capacity (MW) No. of Projects

[List of Solar Projects Under Construction]

Pre-investment Project Design Construction Others

Source: StoxPlus Database as of March, 2018

Figure 21: Breakdown of Solar planned capacity by Ownership

Capacity (MW) No. of Projects

Capacity (MW) No. of Projects