Key updates include the following:

• Power Master Plan: Clear regulations outline which projects are included or excluded under national and provincial power master plans. Notably, self-generated and self-consumed renewable and new energy sources that are either connected to the national grid at a low voltage level of ≤ 1kV or not connected at all, and grid-connected power sources equipped with zero-export systems, will not be included in any power master plans.
• Gas-to-Power Projects: Clear regulations allow the power projects having the commercial operation date (COD) before 1 January 2031 (if using imported liquified natural gas or LNG) or before 1 January 2036 (if using domestic natural gas) to benefit from a new pass-through mechanism, ensuring that all fuel prices are reflected in power tariffs under the Power Purchase Agreement (PPA). Additionally, the power purchaser shall commit to purchasing a long-term minimum contract power output generated from such projects. This includes a maximum level of capacity for domestic natural gas, and ≥ 65% of the multi-year average power output during the principal and interest loan repayment period (but ≤ 10 years from the COD) for imported LNG power projects.
• Selection of Investors for Power Projects: The bidding process for investor selection applies to gas-to-power projects, coal-fired power projects, and renewable energy projects (including solar power, wind power, hydropower and biomass power), which are included in the national or provincial power master plans and have at least two interested investors. The Invitation to Bid (ITB) must include a draft PPA proposed by the power purchaser and agreed upon with the bidding authority. For power projects with a tariff framework issued by the Ministry of Industry and Trade (MOIT), 80% to 90% of the total score for selecting a winning bidder is determined by the power tariff proposed by the bidder. The winning tariff is the maximum tariff for the power purchaser and the winning bidder to negotiate the PPA tariff. For projects without a tariff framework issued by the MOIT, 80% to 90% of the total score for selecting the winning bidder is determined by the minimum amount contributed to the State budget annually, independent of the investor's obligation to the State budget under legal regulations, as proposed by the bidder.

Key takeaways

We summarize below the key points of Decree No. 56 below for your reference:

1. Power Master Plan – Projects included and excluded

1. National master plan inclusions (excluding energy storage systems combined with renewable energy sources):

• Power projects with an installed capacity of ≥ 50 MW, including power grids synchronously connected to power source
• Power projects with an installed capacity of < 50 MW, including power grids of ≥ 220kV voltage level synchronously connected to power source
• Power grids of ≥ 220kV voltage level.

2. Provincial master plan inclusions:

• Power projects with an installed capacity of < 50 MW, including power grids of ≤ 110kV voltage level synchronously connected to power source
• Power grids of 110kV voltage level.

3. Master plan exclusions:

• Self-generated and self-consumed renewable and new energy sources either connected to the national grid at a low voltage level of ≤ 1kV or not connected at all
• Grid-connected power sources equipped with zero-export systems
• Power sources using excess heat generated from the manufacturing lines for self-consumption, whether connected or not connected to the national grid, as long as there is no sale of power output to the power system
• Power sources not connected to or selling power output to the national power system, except for the cases of power imports and exports (e.g., power sources only for private sale and purchase)
• Power grids of ≤ 1kV voltage level.

2. Pass-through mechanism for gas-to-power projects – Fuel price reflection in power tariff

1. Applicable projects: Gas-to-power projects having COD before 1 January 2031 (if using imported LNG) or before 1 January 2036 (if using domestic natural gas), after having obtained approval of construction acceptance results from the relevant competent authority.
2. Fuel price for power tariff calculation in the PPA: Either the fuel price supplied at the power plant or the weighted average of the invoice volume of fuel purchase agreements (applicable if multiple fuel purchase agreements are signed).
3. Projects with infrastructure for LNG import and utilization: Investment costs for infrastructure can be recovered through the PPA, without duplication in the fuel price supplied at the power plant.
4. Projects using shared infrastructure for regasified LNG: The fuel price supplied at the power plant is calculated on the basis of the LNG price imported at the port and the LNG storage, regasification, transportation, and distribution service fees (the specific service fees are further set out by the MOIT).
5. Build-Operate-Transfer (BOT) projects: Gas-to-power projects invested under the BOT regime can choose to apply the above pass-through mechanism and other relevant regulations.

3. Long-term minimum contract power output mechanism – Offtake commitment level

1. Applicable projects: Gas-to-power projects having COD before 1 January 2031 (if using imported LNG) or before 1 January 2036 (if using domestic natural gas), after having obtained approval of construction acceptance results from the relevant competent authority.
2. Project using domestic natural gas: Maximum level based on gas supply capacity, meeting fuel and capacity binding requirements, and the project's available power output.
3. Projects using imported LNG: During principal and interest loan repayment period (but ≤ 10 years from the COD): ≥ 65% of the multi-year average power output. After the applicable period: negotiated and agreed upon between power seller and power purchaser.
4. Multi-year average power output: Specified in the PPA and determined by the MOIT's Circular No. 12/2025/TT-BCT dated 1 February 2025 on the method for determining the power generation service price, principles for calculating the power tariff and the main contents of the PPA.
5. Responsibility for negotiation and agreement: The parties are required to negotiate and agree on the long-term minimum contract power output, and the applicable term of the long-term minimum contract power output under the PPA.
6. Build-Operate-Transfer (BOT) projects: Gas-to-power projects invested under the BOT regime can choose to apply the above long-term minimum contract power output mechanism and other relevant regulations.

4. Bidding Process for Investor Selection – Applicable projects, ITB requirements, criteria for selection, and PPA execution

1. Applicable projects: Gas-to-power projects, coal-fired power projects, and renewable energy projects (including solar power, wind power, hydropower and biomass power), which are included in the national or provincial power master plans and have ≥ 02 interested investors.
2. Power purchaser: Vietnam Electricity (EVN) (or its authorized units) and its five Power Corporations.
3. ITB for bidding includes, among others, the following:

• Information of power purchaser
• The project's pre-feasibility study report
• Draft PPA proposed by the power purchaser and agreed upon with the bidding authority
• Requirements on the localization rate for important equipment items and consulting services
• Pass-through mechanism and long-term minimum contract power output mechanism as investment guarantee mechanisms.

4. Responsibility for paying pre-feasibility study report costs:

• Investor responsibility: The investor pays if the investor proposes the project. If the project is not approved for an investment policy or no winning investor is selected, the proposing investor bears all costs and risks.
• Authority responsibility: If there is no proposing investor, the competent authority or the bidding authority utilizes regular expenditure sources to pay and the selected investor will reimburse. If the project is halted or no winning investor is selected, the costs are settled into the reasonable expenses of the competent authority or the bidding authority.

5. Evaluation criteria for power industry development effectiveness:

• Criteria for power industry development effectiveness: Accounting for 80% to 90% of the total score for the determination of a winning bidder.
• Power tariff for projects with a tariff framework issued by the MOIT: Ceiling tariff falling within the tariff framework; bidders propose a power tariff ≤ the ceiling tariff stated in the ITB; and the winning tariff is the maximum tariff for the power purchaser and the winning bidder to negotiate the PPA tariff.
• State budget contributions for projects without a tariff framework issued by the MOIT: Minimum amount contributed to the state budget annually (independent of the investor's obligation to the State budget under legal regulations); and the bidder proposes an amount ≥ the amount stated in the ITB.

6. Timeline for PPA negotiation and execution:

• Feasibility study (FS) report approval: Within 15 months (for hydropower, gas-to-power, coal-fired and wind power projects) or six months (for biomass power and solar power projects) from the date of project contract execution.
• PPA negotiation and execution: Based on the bidding results and the approved FS report, within three months from the date the winning bidder submits a valid application to the power purchaser.

If you would like to further discuss the details of these developments further, including how they impact specific projects and transactions as well as he necessary steps moving forward, please do not hesitate to contact us.

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Hoang Anh Vu, Trainee Solicitor, has contributed to this legal update.