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The Government of Vietnam just issued Decree No. 80/2024/ND-CP dated July 3rd, 2024 regulating the direct electricity trading mechanism between renewable energy generators and large electricity users. The Decree officially took effect from July 3rd, 2024.

This Decree stipulated that direct electricity trading was the activity of buying, selling and receiving electricity that could be carried out under one of the two forms:

1. Direct electricity purchase and sale through a Private Connection Line is the activity of signing a power purchase and sale agreement and delivering electricity through a Private Connection Line between a renewable energy generating unit and a large electricity user according to prescribed provisions in Chapter II of this Decree.

2. Direct buying and selling electricity through the National Grid is an activity of buying and selling electricity through a forward contract between a renewable energy generating unit and a large electricity user (or an electricity retailer at an authorized zones and clusters) and electricity trading activities are carried out according to the provisions of Chapter III of this Decree including:

– Renewable energy generators sell all produced electricity into the spot electricity market of the competitive wholesale electricity market;

– Large electricity users or electricity retailers in authorized zones and clusters sign power purchase contracts with an EVN Distribution Corporation (or authorized/decentralized unit of EVN Corporation) to purchase the entire electricity that meets their demand;

– Renewable energy generators and large electricity users or electricity retailers in zones and clusters are authorized to buy and sell electricity through forward contracts.

Quick implementation of Decree 80 on the direct power purchase and sale mechanism (DPPA) will create more “buyers” in the competitive power trading market, instead of just EVN and the current EVN Distribution Corporations, bringing the market closer to the competitive “wholesale” and “retail” level. On the other hand, DPPA will create opportunities for investment to strongly develop renewable energy sources and create opportunities for businesses to receive renewable energy certificates and carbon emission reduction certificates soon to increase the competitiveness of goods when they export products to international markets.

Fast Capital Solution Joint Stock Company supported Nexif Ratch Energy Investments (Nexif Ratch Energy) to acquire successfully the 30 MW Minh Luong run-of-river hydro power plant located in Lao Cai province, Vietnam. 

The transaction helps strengthen Nexif Ratch Energy’ growth path in renewables and further expands the company’s operating asset portfolio in Vietnam. 

Fast Capital acted as the Financial Advisor to Nexif Ratch Energy in the transaction, supporting the company from the origination to closing using the fast track execution method to achieve financial close within the timeline of 5 months.  

In the context that the Vietnam economy is still facing many difficulties, on 23 August 2023, the State Bank of Vietnam (SBV) issued Circular No. 10/2023/TT-NHNN suspending some lending clauses of Circular No. 06/2023/TT-NHNN of the SBV dated 28 June 2023 (“Circular 06”) to increase the access to bank loans for corporate & SME clients in Vietnam. 

Circular 10 will come into effect on 1 September 2023.

On 28 June 2023, the State Bank of Vietnam (SBV) issued Circular No. 06/2023/TT-NHNN amending several provisions of Circular No. 39/2016/TT-NHNN of the SBV dated 30 December 2016 (“Circular 39”) on lending activities of onshore credit institutions and foreign bank branches (local banks) to customers (“Circular 06”).

Circular 06 will come into effect on 1 September 2023.

On June 30, 2023, the Governor of the State Bank issued Circular 08/2023/TT-NHNN stipulating conditions for foreign loans not guaranteed by the Government.

 The State Bank of Vietnam (SBV) on September 7 raised credit growth quotas for several banks, paving the way for these lenders to make new loans for clients.

Four banks with State stakes, including Vietcombank and Agribank, and some joint-stock banks are given higher credit growth limits, meaning they can accelerate lending in the rest of the year.