Thailand’s energy investors hope for issue resolutions

Thailand’s energy investors hope for issue resolutions

While Vietnam’s efforts to maintain dialogue with foreign energy developers have been acknowledged, the country’s lack of regulatory certainty remains a critical challenge, especially for Thai investors who are voicing concerns over fairness, timing, and protection.

Supa Waisayarat, head of the Power and Energy Working Group under the Thai Chamber of Commerce in Vietnam (ThaiCham), told VIR that despite ongoing engagement, Thai investors remain concerned about the lack of clear outcomes on key issues such as payment resolution and feed-in tariff (FiT) policy.

“While we appreciate the authorities’ willingness to listen, concrete results are still limited,” Waisayarat said following the April 10 working session with the Renewable Energy Task Force under the Ministry of Industry and Trade (MoIT). “We are still awaiting definitive guidance on payment settlements and clarity on FiT policy.”

The meeting, chaired by Tran Hoai Trang of the Electricity and Renewable Energy Authority, gathered major Thai developers such as B.Grimm Power, Gulf, Gunkul, Eternity, and Super Energy, representing more than 3GW of renewable capacity in Vietnam.

Central to investor frustration is the retroactive application of the certificate of commissioning acceptance (CCA) as a condition for determining commercial operation date (COD) and tariff eligibility.

According to ThaiCham, more than 2GW of existing Thai-backed projects now face the risk of losing FiT1 status, while another 700MW are classified under transitional pricing schemes, threatening venture viability.

Nguyen Anh Tuan, CEO of B.Grimm Power Vietnam, told local media that the requirement for a CCA was never clearly mandated as a precondition for COD recognition under earlier regulations. According to Tuan, this requirement only emerged after the government inspectorate issued a conclusion in November 2023, which retroactively interpreted the CCA as a necessary legal basis for determining COD and FiT eligibility.

“We were not informed that the CCA was a prerequisite. It’s only recently that this was retroactively added to the compliance conditions,” he said. “If we had known, we would have met the requirement. But applying it after the COD and using it to reclassify FiT eligibility creates major financial distress,” Tuan explained.

He added that such reclassification, moving projects from FiT1 to FiT2 or transitional rates, would slash initiative revenues by up to 50 per cent, placing severe pressure on debt servicing. Many projects may not survive this adjustment, Tuan said, noting that B.Grimm’s projects were developed and financed based on FiT1 assumptions.

Other investors echoed similar concerns. Tran Minh Tien of Eternity said the company’s projects in Ninh Thuan and Phu Yen provinces were financed by Thai and Vietnamese banks under FiT1 terms, with BIDV and Vietcombank providing guarantees. “If we are pushed to a lower FiT bracket, we won’t be able to repay the loans, and this could have knock-on effects on the financial institutions involved,” Tien said.

Meanwhile, Gulf Vietnam’s CEO, Purin Veravattanadej, noted that payment delays had persisted since January for some projects with post-COD CCAs. “We have experienced two years of temporary pricing and inconsistent payments. We are under severe cashflow stress and unable to access new credit lines due to regulatory uncertainty,” he stated.

Investors also pointed to broader implementation challenges, such as prolonged delays in land clearance, overlapping zoning between energy and mineral plans, and slow approvals for investment policy adjustments. These factors are contributing to further delays in project commissioning, with developers unable to complete COD procedures or access grid connections in time.

Despite these challenges, ThaiCham has reiterated its commitment to Vietnam’s long-term energy goals and net-zero ambitions.

“Vietnam remains a strategic market for Thai investors,” said ThaiCham’s Waisayarat. “But to continue investing confidently, we need predictable and fair regulatory frameworks, including the honouring of signed power purchase agreements (PPAs) and legal commitments.”

To support the resolution of ongoing issues, the Power and Energy Working Group of ThaiCham submitted a set of key recommendations to the MoIT. These include a formal guarantee from the government to uphold tariff commitments under all signed PPAs, the establishment of a transparent and time-bound mechanism for addressing overdue payments, and the streamlining of procedures related to licensing, land use, and grid connection for transitional renewable energy projects.

The MoIT has reaffirmed its role as a facilitator rather than an arbitrator in commercial matters. During the April 10 session, Trang tated that while the MoIT would not interfere in PPA enforcement, the ministry is revising Power Development Plan VIII and preparing task forces to support local regulatory issues.

According to the MoIT, relevant cases must follow a legal process and be reported in full to higher levels of government. “These issues require a holistic resolution. We are compiling a comprehensive report to submit,” Trang said.

Electric Power Trading Company, an arm of Vietnam Electricity (EVN), also stated that temporary payments are being applied in accordance with inspection findings, and that operation and maintenance costs are being covered while awaiting MoIT guidance. However, EVN emphasised that investors must ensure full legal compliance and maintain accurate documentation.

While regulatory agencies have shown intent to support renewable energy investment, developers remain cautious. The uncertainty has already prompted some developers to delay new commitments or redirect investment to other ASEAN markets with more stable regulatory environments, Waisayarat of ThaiCham said.

“Thai investors express hope that continued dialogue will lead to workable solutions. We believe in Vietnam’s green development vision and the potential of its renewable energy sector,” Waisayarat added. “We stand ready to work with the government in good faith to resolve these issues for the benefit of all stakeholders.”

EVN has been tasked with reviewing each project and confirming that those failing to meet feed-in tariff conditions due to investor shortcomings will not qualify for preferential tariffs. Relevant ministries and agencies shall have to resolve outstanding issues in the next month and report to the government and Politburo in June.

VIR