New criteria proposed for offshore wind funding

New criteria proposed for offshore wind funding

The government proposes that offshore wind power investors must have a minimum chartered capital of $400 million and equity capital of no less than 15 per cent of the total investment.

On November 24, the Standing Committee of the National Assembly gave comments on the draft resolution to remove difficulties for national energy development towards 2030.

In the draft, the government added regulations on the development of offshore wind (OSW) power. Enterprises conducting surveys for such projects must also meet three conditions: electricity production and business as their registered business line, possessing a minimum charter capital of $400 million, and equity capital of at least 15 per cent of the total approved investment.

Before 2031, the government plans to assign provincial-level People’s Committees the authority to approve the investment policy for related projects. If only one investor submits a proposal, the provincial people’s committee will conduct an appraisal to approve the investment policy in accordance with regulations.

For projects with two or more investors registering interest, the selected enterprise will be determined based on priority criteria: first, project location offering the lower expected electricity price; followed by lower preliminary capital, stronger financial capacity of the enterprise, and earlier submission of a valid application dossier.

The government also proposes that relevant projects be exempted or reduced from sea area usage fees. In addition, throughout the loan repayment period, such ventures selling electricity to the national grid will be guaranteed a minimum off-take contract of 90 per cent of its multi-year average electricity output.

Minister of Industry and Trade Nguyen Hong Dien said, “There are many proposals from both domestic and foreign investors to conduct field surveys and obtain investment policy approval for OSW power projects. Vietnam currently lacks basic survey data needed for development, and also lacks synchronised port infrastructure to support this sector by 2030.”

Therefore, a superior mechanism is needed to accelerate the implementation of projects already included in the approved power master plan, especially those scheduled to come online in 2030-2035, Minister Dien said.

According to the adjusted Power Development Plan VIII, Vietnam will have 6,000MW of OSW power by 2030 and 17,500MW by 2035. By 2050, the capacity of this power source is expected to reach 113,000-139,000MW.

National Assembly Chairman Tran Thanh Man, meanwhile, requested clarification in the draft resolution regarding the form of indirect government guarantees for corporations and enterprises, and a comprehensive assessment of the impact of this regulation on public debt safety and fiscal stability.

He also asked the drafting agency to pay attention to provisions on direct power purchase mechanisms, or whether the electricity price in power purchase agreements is calculated in USD.

VIR