Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 319
Offshore Wind Worldwide 2023
8. OTHER
The current wind regulations do not set out
any other special permitting/investment
permit requirements for offshore wind
projects. However, as of 26 March 2021 (i.e.,
the effective date of Decree No. 31/2021/
ND-CP issued by the Government), offshore wind power is now listed as a sector
for which market participation by foreign
investors is "conditional" (this was not the
case before 26 March 2021). Under the Law
on Investment, in general, market participation "conditions" applicable to foreign
investors comprise: (i) ratio of ownership
of charter capital of foreign investors in the
company; (ii) forms of investment; (iii) scope
of investment operation; (iv) capacity of investors and other parties participating in the
investment activity; and (v) other conditions
under laws and regulations of the National
Assembly, ordinances and resolutions of
the Standing Committee of the National
Assembly, decrees of the Government and
international treaties of which Vietnam is
a member. There is currently no foreign
ownership restriction in the offshore wind
power sector under Vietnamese laws and regulations, so foreign investors may still own
up to 100% of the equity in offshore wind
power project companies. Offshore wind
projects are developed by local and foreign
electricity generation companies based on
the generally applicable Law on Investment,
the regulations applicable for project licensing and a PPA, which is based on a statutory
template attached to the wind regulations.
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There are a few noteworthy bankability
challenges related to the largely non-negotiable template form of PPA on which EVN
has historically insisted. In particular, the
PPA template does not expressly recognize
lender step-in rights. It should also be noted
that, for offshore projects, once an entity
is assigned a given marine space it cannot
transfer the right to use that marine space to
another entity. 5 This may be problematic for
implementation of lender step-in rights.
The south-eastern region of Vietnam has
the highest wind speeds in the world and
a seabed which is relatively shallow and
consistent. 6 This coastline is a high potential
zone for offshore wind energy. However,
there are many oil and gas platforms in
this area that could be a major obstacle to
the development of offshore wind power
projects.
Since the developers and sellers must bear
the costs and risks associated with the grid
connection, developing offshore wind energy further away from the coastline would
be even more demanding as more capital
investment is required for logistics and grid
connection.
Furthermore, due to the country’s inexperience with offshore wind, there are currently
no specific regulations to mitigate project
risks such as damage to infrastructure (e.g.,
subsea transmission cables) and natural
disasters.
5 Article 7.2(e) of Decree No. 11/2021/ND-CP dated 10 February 2021 of the Government on the assignment of specific sea areas to organisations and individuals for marine resource exploitation and use.
6
https://www.evwind.es/2017/07/13/vietnam-has-large-wind-power-potential/60444.
