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Vietnam has positioned itself as a regional leader in renewable energy development, with strong commitments to clean energy transition and carbon neutrality by 2050. As of 2025, the legal framework governing bidding and implementation of clean energy projects has undergone significant updates, reflecting the government’s efforts to enhance transparency, attract offshore investment, and ensure sustainable growth in the energy sector.
For foreign investors, project developers, and legal professionals, understanding these regulatory changes is critical to structuring successful clean energy ventures in Vietnam.
1. Competitive Bidding Mechanism
The 2025 framework reinforces competitive bidding as the primary method for selecting investors in renewable energy projects.
Key Features
- Bidding is mandatory for solar, wind, and other large-scale renewable projects connected to the national grid.
- Investors with oversea investment capital must demonstrate technical capability, financial capacity, and prior experience.
- Selection is based on tariff competitiveness, project feasibility, and alignment with national power development plans.
Legal Basis
The bidding mechanism is governed under the revised Law on Bidding (2023) and implementing decrees issued in 2025 specifically for the energy sector.
2. Power Purchase Agreements (PPAs)
The updated regulations introduce standardized Power Purchase Agreements (PPAs) to balance the interests of investors and EVN (Vietnam Electricity), the sole buyer in most cases.
Notable Updates
- Greater clarity on risk allocation, especially for curtailment and force majeure.
- Longer PPA terms (up to 25 years for wind and solar).
- Flexibility for direct power purchase agreements (DPPA) between renewable generators and large consumers.
Risks
- Tariff adjustments remain subject to government approval.
- Delays in negotiations with EVN can affect project timelines.
3. Land Use and Permitting
Land acquisition for clean energy projects remains a key challenge, and 2025 reforms aim to streamline the process.
Key Points
- Investors must secure land-use rights in compliance with the Land Law (amended 2024).
- Priority is given to degraded land, coastal zones, and areas unsuitable for agriculture.
- Environmental impact assessments (EIA) are mandatory before project approval.
Risks
- Local community opposition may delay land clearance.
- Overlapping land-use rights can create disputes if not carefully managed.
4. Grid Connection and Infrastructure
The legal framework now requires early coordination with EVN and provincial authorities on grid connection plans.
Key Features
- Investors must fund grid connection facilities for their projects.
- Priority grid access is given to projects aligned with the National Power Development Plan VIII (PDP8).
- Smart grid integration is encouraged for stability and efficiency.
Risks
- Grid congestion in certain provinces may limit output.
- Delays in infrastructure development can increase project costs.
5. Incentives and Compliance Obligations
Vietnam continues to offer offshore investment incentives for clean energy while tightening compliance requirements.
Incentives
- Preferential tax rates and import duty exemptions for renewable energy equipment.
- Land rent reductions in designated renewable zones.
Compliance
- Strict reporting on greenhouse gas emissions.
- Mandatory decommissioning plans for renewable projects at the end of their lifecycle.
FAQs
1. Is bidding mandatory for all renewable energy projects in Vietnam?
Yes, as of 2025, competitive bidding is required for most grid-connected clean energy projects.
2. How long are the new Power Purchase Agreements valid?
PPAs can last up to 25 years for wind and solar projects under the 2025 framework.
3. Can foreign investors directly sell power to consumers?
Yes, the updated rules allow direct power purchase agreements (DPPA) in certain cases, subject to regulatory approval.
4. What land-related risks should investors consider?
Community resistance, land clearance delays, and overlapping land-use rights remain key risks.
5. Are there environmental compliance requirements for renewable projects?
Yes, investors must complete environmental impact assessments and comply with greenhouse gas reporting obligations.
Conclusion
The 2025 updates to Vietnam’s legal framework for clean energy projects mark a significant step toward creating a transparent and investor-friendly environment. Competitive bidding, standardized PPAs, streamlined land-use procedures, and clear compliance obligations aim to attract quality investors while supporting Vietnam’s sustainable energy transition. Foreign investors and project developers must closely monitor these changes to structure compliant, bankable, and resilient clean energy ventures in Vietnam.
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