It is unsure what will happen after the policies

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It is unsure what will happen after June 30, 2019. The policies could therefore be either more favourable or less beneficial for future investors, as compared to first movers; There is no classification or diversification for different scales/sizes of PV projects; PV is not yet clearly defined in provincial and national energy planning. The opportunity: the PPA for utility scale projects The unknown 5
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White Paper Vietnam WWW.PVTRADEMISSIONVIETNAM.COM Although EVN is positioned as sole off- taker, there are circumstances where its obligation to purchase the produced power can be lifted. This does bring in additional risks on the generators’ side and could affect the appetite for investors. The draft PPA at this point in time does not provide a “take or pay” clause, and EVN’s obligations are lifted when: 1. EVN is in the process of installing equipment, or making repairs, replacement, inspection or examination of the grid connection of the seller’s power plant; 2. The transmission or distribution network connected to EVN’s grid has a problem or grid equipment directly connected to EVN’s transmission grid or the distribution grid has a problem; 3. EVN’s grid needs support to recover after an incident in accordance with the provisions of operation of the national power system and the standards, technical regulations of the electric industry. While existing capacity might not meet certain expectations, the announced pipeline looks highly promising. In a market like Vietnam, bold statements are met with MOUs and press releases that at the very least indicate the potential and interest for Besides the risk of the supplied energy not being accepted, there are also some clear concerns on the bankability of the current PPA. It has to be noted that these concerns are applicable in the other renewable energy agreements as well, so there might be parallels to draw from successful wind and hydro projects in Vietnam. For the time being the most urgent bankability issues raised: The PPA does not allow for offshore arbitration, disputes can be settled in local courts; EVN is not credit rated, so unclarity on its creditworthiness; Grid connection, along with its costs and risks, forms a liability on the generator’s side, since a clear allocation on these issues is not available; No payment or termination guarantee is available, nor signs that they will be made available. That, however, does leave room for other risk covering mechanisms to step in. PV. Certainly with the PPA structure not yet set in stone and its bankability questioned, it has to be seen who can prove his or her worth in developing these boldly claimed projects. The (bankability) concerns Announced projects and pipeline 6
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WWW.PVTRADEMISSIONVIETNAM.COM White Paper Vietnam PROJECTS OVERVIEW Size Value Project developer From Province Link 350MW $421 mn Genco 3 VN Ninh Thuan and Khanh Hoa URL 90MW $118 mn Hoang Son Trading Investment and Univergy Solar VN and JP Than Hoa URL 150MW $150 mn IQLinks and CMX Renewable Energy
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