Vietnam: New Decree 115 introduces new bidding requirements for land-use projects and significantly impacts investor selection for power projects

In brief

The government of Vietnam has officially adopted Decree No. 115/2024/ND-CP ("Decree 115"), which took effect from 16 September 2024, to elaborate certain provisions of the Bidding Law1 for investor selection for land-use investment projects. Decree 115 also introduces new requirements on bidding for investor selection of renewable power projects and natural gas/LNG-to-power projects. Decree 115 not only improves the bidding process of investor selection in general, but also officially sets out a mandatory bidding requirement for selecting investors of power projects, thereby potentially reshaping the future of the development of power sector in Vietnam.

Please find below the highlights of the key new regulations under Decree 115.


Contents

Key takeaways

Decree 115 has a number of significant impacts on the bidding process for selecting investors for the land-use investment projects, with the following highlights:

  • Wide range of land-use investment projects falling within the scope of investor selection via bidding under Decree 115
  • New regulations setting out different scoring criteria for different types of land-use projects (e.g., power projects and other type of projects)
  • New regulations allowing the transfer of equity capital in the project company established by the winning bidder to implement the project ("Project Company")
  • New regulations potentially allowing the changes of the shareholding ratio in the consortium of investors after winning the bid
  • New bidding regulations for investor selection for power projects, including (in addition to the above new regulations):
  • Bidding will be required to select investors of renewable power projects and natural gas/LNG-to-power projects not using capital from the state budget, if there are two or more investors expressing their interest and registering for implementing such projects.  
  • The invitation to bid (ITB) for power projects will be prepared by the relevant competent authority based on the feasibility study (FS) report or the pre-FS report (if any) and the draft power purchase agreement (PPA) already agreed with the electricity purchaser.
  • The power purchaser (e.g., EVN) will be obliged to participate in preparing the ITB and agreeing the draft PPA as a component of the ITB for power projects.
  • The criterion related to the electricity price and price related principles accounts for 80% to 90% of the total score of each bidder.

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1 Bidding Law No. 22/2023/QH15 adopted by the National Assembly on 23 June 2023 ("Bidding Law").

 


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