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Vietnam released list of energy projects eligible for JETP funding and proposed important renewable energy regulations

Photo by Waldemar on Unsplash

Written by Partner Duyen Ha Vo

On 31 August 2023, Vietnam’s Deputy Prime Minister Tran Hong Ha signed Decision 1009/QD-TTg approving the Plan (“JETP Plan”) for Implementation of Vietnam’s Political Declaration regarding the Just Energy Transition Partnership (“JETP”).


According to the JETP Plan, the Ministry of Natural Resources and Environment is tasked to coordinate with other ministries to develop Vietnam’s JETP Resource Mobilization Plan (JETP – RMP) by November 2023.  Additionally, relevant ministries are required to review, amend and supplement relevant legislative instruments, master plans and policies to assure meeting the JETP requirements within the national public debt and national foreign debt quotas, and continue to complete the regulatory regimes for renewable energy developments.

Below are some important details of the JETP Plan:

Coal Transition

  1. Coal power plants older than 30 years are tentatively closed if conversion to other fuels is not feasible.
  2. Negotiation with relevant investors is to be made to halt construction or to transition to alternative fuels existing coal-fired power plants which are facing deploying and delay challenges, such as Cong Thanh, Nam Dinh I, Vinh Tan III, and Song Hau II.
  3. A roadmap need be developed for converting coal-fired power plants which are under construction or operation during the period 2030 to 2050.

Transportation services

Vietnam will deploy electric bus systems by 2029 and develop public infrastructure for electric vehicles and other environmentally friendly means of transport in urban areas and an electric vehicle charging network by 2030.

Projects eligible for JETP funding

According to the JETP Plan, the JETP funding is prioritized for the following project categories:

Power Grids

Vietnam will mobilize private investments in power grid developments including offshore grids in addition to EVN investments and will develop the legal regime to regulate and encourage such private investments.

Key responsible authorities for power grid developments include Ministry of Industry and Trade (“MOIT”), EVN and the National Commission for Management of State Capital at Enterprises (as the State owner representative agency for EVN).  The sources of capital will be from members of the International Partners Group (“IPG”), other development financial institutions, and Vietnam’s commercial banks. 

Battery Energy Storage

Vietnam is set to explore the feasibility of battery energy storage systems (“BESS”) and formulate policies to support BESS services.  In addition, between 2024 and 2029, investments will be made in pilot BESS projects for specific solar farms, including a 50MW and a 400MW solar farm. The investment capital will be from the IPG members, other development financial institutions, and Vietnam’s commercial banks.

Offshore Wind Power

Vietnam targets to achieve a total offshore wind capacity of 6GW by 2030 with capital sources from the IPG members, other development financial institutions, and Vietnam’s commercial banks.


For reference, JETP is a financing mechanism that supports coal-dependent developing nations in their transition to clean energy while addressing associated social challenges.  JETP funding can go through grants, loans, or investments.  The donor pool includes the IPG and the Glasgow Financial Alliance for Net Zero (GFANZ) Working Group (“Glasgow Group”). The IPG consists of Japan, the USA, Canada, Denmark, France, Germany, Italy, Norway, the EU, and the UK. The Glasgow Group comprises Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, Mizuho, MUFG, Prudential Plc, Shinhan Financial, SMBC, and Standard Chartered Bank.

Vietnam is the third country, following South Africa and Indonesia, to reach a JETP agreement.  In December 2022, the IPG issued a JETP Political Declaration resolving to mobilise at least US$15.5 billion over the next three to five years through a combination of financial instruments to support Viet Nam’s low-emission and climate resilient development, as well as to support Vietnam to accelerate the just transition and decarbonisation of the electricity generation system.  Accordingly, the IPG will mobilise US$7.75 billion of public sector finance which should be on more attractive terms than capital market terms and the Glasgow Group members will mobilise and facilitate at least US$7.75 billion in private finance, subject to mobilisation of the catalytic public sector finance by the IPG members. 


In July and August, Vietnam also made significant steps in developing draft regulations to further the implementation of the recently approved Power Master Plan VIII, summarized below.

Issuance of the National Energy Master Plan

In late July 2023, the Prime Minister issued Decision 893/QD-TTg approving the National Energy Master Plan for the Period 2021-2030 with a vision to 2050.  According to this master plan, Vietnam aims to achieve a total renewable energy capacity of 30.9%-39.2% of the total energy generation capacity in the nation by 2030 (or up to 47% depending on the level of support materialized from JETP), and 67.5%-71.5% by 2050.  It also plans to develop 2 national complexes for the production, transmission and consumption of renewable energy and to develop renewable energy and new energy generation sources for export, with a target annual electricity export of 5,000-10,000MW by 2030.  This master plan also projects 3 green hydrogen production projects of a total annual capacity up to 1,000 tons by 2030.

Proposal for formulation of a DPPA Decree

In early August, the MOIT submitted a proposal to the Prime Minister for the development of the Direct Power Purchase Agreements (“DPPA”) regime. This proposal sought to establish the DPPA framework as a Government decree through an expedited fast-track route for quicker issuance.   The MOIT proposes that investors have two DPPA options to be further elaborated in the draft decree:

  1. The first option involves the direct sale of electricity with use of privately invested transmission facilities and without involvement of EVN’s transmission grids (behind-the-meter arrangement). In this scenario, there would be no limitations on the capacity, output, connection voltage level or the intended use of electricity, provided that the project aligns with the relevant power master plans.
  2. The second option involves the direct sale of electricity with connection to EVN’s transmission grids. In this case, the sale is subject to specific regulations governing connection to EVN’s transmission grids and is made under a contract-for-difference (“CfD”). Eligibility for this option requires the power plant to have a minimum installed capacity of 10MW.

It’s worth noting that a draft DPPA “pilot” program, originally introduced in the form of a decision by the Prime Minister, has been in a pending state for several years without reaching finalization. In the initial proposed framework, the DPPA program was designed as a temporary pilot initiative, targeting selective solar and wind power projects of a total combined capacity limit of 1,000MW, and eligibility required a project size of at least 30MW.

The new proposal from the MOIT introduces positive modifications. Firstly, it expresses a preference for the issuance of a comprehensive decree on DPPA regimes by the Government instead of a “pilot” program decision. Secondly, the proposal leans towards the behind-the-meter option and lowers the minimum required project size for the CfD option to 10MW.

Draft Regulation on Solar and Wind Power Plant Tariff Ranges

The MOIT is also developing a draft regulation on formula requirements and procedures for establishing tariff ranges for new grid-connected solar and wind power plants.  The draft regulation was made available for public comments the last week of August.


A record-breaking heat wave and a serious drought, along with high electricity demand, caused unprecedented power shortages in Northern Vietnam in the summer of 2023. This led to operational halts for businesses in May and June, particularly those in manufacturing and logistics, resulting in financial losses estimated by the World Bank to be US$1.4 billion in total.  Northern Vietnam’s energy landscape predominantly relies on two sources: hydropower (43%) and coal (48%).  The prolonged drought depleted hydropower reservoirs, leading to the shutdown of 11 hydropower plants, removing 5,000MW from the grid. 

While promising large-scale power projects have been greenlit in the country’s power master plans, they have faced persistent delays in development.  Some of the primary roadblocks have centered on unresolved governmental policies related to bankable power purchase agreements and the absence of government financial guarantees.  How these challenges will be addressed in the proposed JETP funding will likely have a pivotal impact on the timely execution of the JETP Plan.