EVN must address FIT pricing dispute: MoIT

EVN must address FIT pricing dispute: MoIT

Tensions escalated after 58 wind and solar project investors jointly petitioned the Prime Minister, the Government, the National Assembly, the MoIT and EVN, urging the maintenance of FIT rights for projects reaching COD before or during 2021.

Wind turbines seen at a power plant in the southern province of Bạc Liêu. — VNA/VNS Photo

The Ministry of Industry and Trade (MoIT) has pressed Việt Nam Electricity (EVN) to urgently resolve Feed-in Tariff (FIT) pricing disputes for renewable energy projects, citing serious concerns over investment risks and potential legal disputes.

According to the MoIT, EVN’s reports have yet to meet the requirements under Government Resolution 233, which aims to remove barriers to renewable energy development. Since January, EVN has submitted eight reports, but progress remains slow.

At a government meeting on April 15, EVN’s General Director Nguyễn Anh Tuấn revealed that all investors who participated in discussions rejected EVN’s proposed solutions regarding FIT entitlements. Deputy Minister of Industry and Trade Nguyễn Hoàng Long added that foreign investor groups, such as EuroCham and ThaiCham, warned of possible disputes and arbitration risks, which could damage Việt Nam’s investment environment.

In response, the MoIT has urged EVN to accelerate key actions, including finalising reports on FIT eligibility for large-scale rooftop solar projects built on agricultural land and addressing acceptance documentation for projects affected by COVID-19 disruptions. The Ministry also demanded EVN take full responsibility for selecting optimal solutions that minimise legal disputes and safeguard national energy security.

Ongoing debate

Investor dissatisfaction persists. In January 2025, EVN announced interim payment principles. For example, 25 solar plants (1,300MW) would temporarily be paid under FIT2 rates, and 93 solar projects (7,260MW) and 14 wind projects (649MW) would receive payments based on a transitional price cap.

However, EVN reported that 172 solar and wind projects failed to complete their paperwork at the time of their commercial operation date (COD). Payments for 14 projects have been suspended entirely, while the remainder face administrative delays despite investor claims that acceptance procedures were requested before COD but delayed due to pandemic restrictions.

Investors argued that earlier regulations did not require them to complete all paperwork before COD, and that administrative breaches should not affect FIT eligibility. They stressed that the delayed payments are causing severe financial strain, risking loan defaults with both domestic and international lenders. Currently, there are 65 plants involving foreign investors, with 27 fully foreign-owned.

Tensions escalated after 58 wind and solar project investors jointly petitioned the Prime Minister, the Government, National Assembly, MoIT, and EVN, urging the maintenance of FIT rights for projects reaching COD before or during 2021.

The petition warned that nearly US$4 billion in foreign-invested capital, covering 3.6GW of solar and 160MW of wind projects—was at stake. Since September 2023, many projects have faced indefinite payment delays or partial payments, with little legal clarity beyond findings in the Government Inspectorate’s April 2023 report.

Investors are particularly alarmed by a proposal to retroactively redefine FIT eligibility based on the date of acceptance rather than COD. They argue that this move could erase nearly 100 per cent of project equity for affected developers, severely damage investor confidence, and trigger international legal disputes.

At the core of the issue is the retroactive application of new rules. When these projects achieved COD, prevailing regulations did not require acceptance as a condition. Investors contend that any violations should have resulted in administrative penalties, not the loss of FIT entitlements already secured under previous legal frameworks.

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