Vietnam: New draft decree tries to boost investment under new PPP Law

In brief

The Ministry of Planning and Investment of Vietnam (MPI) recently released a draft of the new decree ("Draft Decree") guiding and implementing certain provisions of the Public-Private Partnership (PPP) Investment Law ("PPP Law").[1]


Contents

The Draft Decree provides noteworthy guidelines and options for interpreting the PPP Law, including the following:

  • PPP investment eligible sectors and minimum scale
  • a definition of "policy" in the context of PPP project development, even if the consequences of addressing the risks of change in laws and policies remain unclear
  • additional guidelines on early termination events and termination compensation payments under PPP project contracts
  • drafting options to be considered for compensation in cases where the project is terminated/stopped due to the transition from the previous PPP regulations (i.e., Decree No. 63) to the new PPP Law[2]

While the Draft Decree remains a work in progress, investors looking for PPP project opportunities in Vietnam will need to consider certain unresolved risk allocation issues. In addition, some vaguely drafted guidelines might allow for different interpretations and create uncertainties from a developer and financier's perspective.

Recommended actions

PPP project investors looking for opportunities in Vietnam may want to keep track of how this Draft Decree develops in order to grasp key legal implications and take the necessary steps to ensure the best position in their relevant projects.

Please do not hesitate to contact us if you would like to know more about any legal, regulatory and contractual issues, including the following:

  • further details on the legal development and interpretations related to PPP projects in Vietnam
  • specific opportunities and challenges, as well as legal and practical solutions, for investing in a PPP project in Vietnam
  • more specific implications and practical advice for financing, developing, and managing PPP projects in any particular sector, including energy projects, water supply and treatment, transportation infrastructure, or any other PPP projects

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1 Law No. 64/2020/QH14 adopted by the National Assembly dated 18 June 2020 on PPP investment.
2 Decree No. 63/2018/ND-CP of the Government dated 4 May 2018 on PPP investment.

 


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