Project financing in Vietnam has thus far focused on the energy and infrastructure sectors. Major power projects have generally been implemented on a Build-Operate-Transfer (BOT) basis, as the BOT legal scheme in Vietnam is more developed than other forms of investment, such as Build-Transfer-Operate (BTO) or Build-Transfer (BT), etc.
As Vietnam introduced new regulations on renewable energy in 2017 with a promoted mechanism, foreign sponsors and financiers have express interests in developing and financing in these sectors. However, there have been some concerns regarding certain bankability issues of these projects, including the template power purchase agreement with limited room for negotiation.
There is no single or consolidated legal instrument that specifically governs project finance in Vietnam. Rather, it would be subject to different sets of legislation, including investment laws, enterprise laws, tax laws, foreign exchange control, loan registration, etc, and may be subject to amendment from time to time. The sponsors and financiers should take these factors into account when considering investments.
Read more on the Project Finance laws and practice here.