Circular No. 23/2015/TT-BCT stipulates the procedures and formalities for investing in thermal power plant projects under the Build-Operate-Transfer (BOT) contract form.

CIRCULAR

Regulations on the procedures and formalities for investing in thermal power plant projects under a contract form business operation

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Pursuant to Decree No. 95/2012/NĐ-CP dated November 12, 2012, of the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Based on Decree No. 15/2015/NĐ-CP dated February 14, 2015 of the Government on investment under the Build-Operate-Transfer (BOT) model;

At the proposal of the Director General of the Energy Administration,

The Minister of Industry and Trade issues this Circular to regulate the procedures and formalities for investing in thermal power plant projects under the Build-Operate-Transfer (BOT) contract form.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates the procedures and formalities for investing in thermal power plant projects under the Build-Operate-Transfer (BOT) contract form (hereinafter referred to as BOT) within the territory of Vietnam.

2. The objects subject to this Circular include organizations and individuals participating in activities related to the investment in thermal power plant projects under the BOT contract form.

Article 2. Interpretation of Terms

1. BOT Contract is a contract signed between the Ministry of Industry and Trade and the BOT investor to construct a thermal power plant within the territory of Vietnam; after completion of the plant, the investor has the right to operate the plant for a certain period; upon expiration of the period, the investor transfers it to the Ministry of Industry and Trade.

2. BOT Thermal Power Plant Project (hereinafter referred to as BOT Thermal Power Plant Project) is a thermal power plant project invested in under the BOT contract form.

3. BOT Investor are organizations and individuals with official documents expressing interest and participation in capital contribution to develop the BOT thermal power plant project.

4. BOT Developer is the BOT investor who has been assigned by competent state authorities to develop the BOT Thermal Power Plant Project.

5. BOT Enterprise is the enterprise established by the BOT Developer to implement the BOT Thermal Power Plant Project.

6. EPC Contractor is the contractor implementing the design, supply of equipment, materials, and construction works of the BOT Thermal Power Plant Project.

7National Power Development Plan (hereinafter referred to as NDPDP) is the specialized power development plan approved by the Prime Minister.

8. Memorandum of Understanding for Developing the BOT Thermal Power Plant Project (hereinafter referred to as MOU) is the memorandum signed between the BOT Developer and the Ministry of Industry and Trade.

9. Feasibility Study Report (hereinafter referred to as FSR) is the document presenting the research contents on the necessity, feasibility, and effectiveness of the BOT Thermal Power Plant Project.

10. Heads of Agreement (hereinafter referred to as HOA) is the agreement signed between the Energy General Department and the BOT Developer.

11. Power Purchase Agreement (hereinafter referred to as PPA) is the contract signed between the BOT Enterprise and the Vietnam Electricity Corporation.

12. Land Lease Agreement (hereinafter referred to as LLA) is the contract signed between the BOT Enterprise and the competent authority at the location of the BOT Thermal Power Plant Project.

13. Coal Supply Agreement (hereinafter referred to as CSA) is the contract signed between the BOT Enterprise and the Coal Supplier.

14. Coal Transportation Agreement (hereinafter referred to as CTA) is the contract signed between the BOT Enterprise and the Coal Transporter.

15. Gas Supply Agreement (hereinafter referred to as GSA) is the contract signed between the BOT Enterprise and the Gas Supplier.

Chapter II

SELECTION OF THE BOT DEVELOPER AND NEGOTIATION OF PROJECT DOCUMENTS

PROJECT DOCUMENTS

Section 1

SELECTION OF THE BOT DEVELOPER

Article 3. The selection of the BOT Developer shall be carried out in accordance with the provisions of the law on bidding.

Article 4. International Bidding shall apply in the following cases:

1. Projects listed in the NDPDP that must undergo international bidding as prescribed by the Prime Minister;

2. Projects listed in the NDPDP without designated developers, where two or more BOT Investors have registered to participate, the method of selecting the BOT Developer shall be decided by the Prime Minister.

Article 5. Direct Assignment of the BOT Developer shall apply in the following cases:

1. Projects listed in the NDPDP where the Prime Minister directly assigns the BOT Developer;

2. Projects listed in the NDPDP with only one BOT Investor registering to participate and the Prime Minister approves the direct assignment of the BOT Developer;

3. Projects proposed by the BOT Investor not listed in the NDPDP and approved by the Prime Minister.

Section 2

NEGOTIATION OF PROJECT DOCUMENTS

Article 6. Memorandum of Understanding (MOU) and Project Implementation Plan

1. Within twenty (20) working days from the date the Prime Minister issues a document assigning the BOT Investor to develop the BOT NMNĐ Project, the General Department of Energy shall send the draft MOU and guide the BOT Investor to prepare for negotiating and signing the MOU. The contents of the MOU include:

a) Legal basis;

b) A general description of the BOT NMNĐ Project;

c) The role and responsibilities of the BOT Investor;

d) The role and responsibilities of the Ministry of Industry and Trade;

đ) The overall development schedule of the BOT NMNĐ Project;

e) The validity period of the MOU;

g) The BOT Investor's responsibility for project development costs; payment of FS preparation costs, FS review costs of the project; legal advisor hiring costs to support Vietnam during the negotiation and implementation process of the project.

2. Within fifteen (15) working days from the receipt of the MOU draft, the BOT Investor must provide comments on the draft and the negotiation plan for the MOU.

3. Within fifteen (15) working days from the date of receiving the formal written opinion of the BOT Investor, the General Department of Energy shall organize the negotiation of the MOU. The MOU negotiation process shall not exceed thirty (30) days.

After reaching consensus on the contents of the MOU, the General Department of Energy shall submit it to the Minister of Industry and Trade for approval to organize the signing ceremony of the MOU.

4. The signing of the MOU shall be conducted between representatives of the Ministry of Industry and Trade and the legal representative of the BOT Investor.

5. Within thirty (30) days from the date of signing the MOU, the BOT Investor must prepare a detailed implementation plan for the project and submit it to the General Department of Energy for review and agreement.

6. Within fifteen (15) working days from the date of receiving the detailed plan, the General Department of Energy shall provide a written response.

7. The contents of the detailed implementation plan for the project include:

a) Preparation and approval of the Power Plant Construction Site Master Plan (if applicable): Date of submitting the Master Plan; date of approving the Master Plan;

b) Preparation and approval of the FS, including: Date of submitting the FS; date of approving the FS;

c) Negotiation plan for the BOT Contract and related documents, including: date of negotiating the PA; date of signing the PA; expected start date of round 1 negotiations; expected end date of round 1 negotiations; expected start date of round 2 negotiations; expected end date of round 2 negotiations; negotiation schedule for related documents: PPA, LLA, Design Contract, Equipment Supply and Installation Contract, and Material Procurement Contract, and fuel supply contracts; date of signing the investment agreement; date of submitting the application for Investment Registration Certificate; date of officially signing the BOT Contract documents;

d) Financial closure date;

đ) Commencement and construction, including: Official project commencement date; commercial operation date of each unit; commercial operation date of the entire plant.

Article 7. Preparation, Review, and Approval of the Power Plant Construction Site Master Plan

1. The preparation, review, and approval of the Power Plant Construction Site Master Plan (hereinafter referred to as the Master Plan) shall be carried out in accordance with Circular No. 43/2014/TT-BCT dated November 19, 2014, issued by the Ministry of Industry and Trade, which stipulates the content, procedures, and processes for preparing, reviewing, and approving the Master Plan.

2. Costs for preparing, reviewing, and approving the Master Plan shall be allocated from the project investment preparation support fund.

Article 8. Preparation, review, and approval of the Feasibility Study Report

1. Within twelve (12) months from the date of signing the Memorandum of Understanding (MOU), the BOT Project Investor must submit to the General Department of Energy the FS project dossier accompanied by the opinions of relevant ministries and agencies and the People's Committee of the province or centrally governed city where the project is located.

The FS project dossier must be prepared by a specialized consulting unit in the electricity sector with a license for power activities in the field of thermal power plant consultancy, having experience in preparing FS dossiers for thermal power plants of equivalent scale or larger.

2. The contents of the FS project dossier shall be carried out in accordance with the provisions of Article 25 of Decree No. 15/2015/ND-CP dated February 14, 2015, of the Government on investment under the public-private partnership model and related legal documents.

3. The procedure for reviewing the FS project shall be implemented in accordance with the provisions of Article 26 of Decree No. 15/2015/ND-CP dated February 14, 2015, of the Government on investment under the public-private partnership model and related legal documents.

4. The Ministry of Industry and Trade will only approve the FS dossier upon receipt of the Decision approving the Environmental Impact Assessment Report from the Ministry of Natural Resources and Environment.

5. Costs for preparing, reviewing, and approving the FS dossier shall be borne by the BOT Project Investor.

Article 9. Legal advisory support for the Ministry of Industry and Trade to negotiate project documents.

1. Within thirty (30) days from the date of signing the MOU, the General Department of Energy proposes the method for selecting legal advisors to assist the competent state agency to submit to the Minister of Industry and Trade for decision to organize implementation.

2. Responsibilities of the Legal Advisor:

a) Support the Ministry of Industry and Trade in drafting and negotiating the details of the BOT Contract, Government Guarantee (hereinafter referred to as GGU), and the Confirmation and Approval of the Ministry of Industry and Trade (hereinafter referred to as MOIT’s A&C);

b) Complete the project contract package (including: BOT Contract, GGU, A&C, Power Purchase Agreement (PPA), Long-Term Loan Agreement (LLA) and Construction Supervision Agreement (CSA) or Gas Supply Agreement (GSA)) ensuring legal validity, accuracy, and consistency in content and wording ready for signature;

c) Other tasks specified in the legal advisory contract.

3. The General Department of Energy conducts the selection of legal advisors and submits to the Minister of Industry and Trade for approval along with the budget estimate for legal advisory services supporting negotiations.

4. Costs for hiring legal advisors to support the Ministry of Industry and Trade in negotiating project documents are allocated from the state budget. In cases where the state budget has not been allocated in time, the Ministry of Industry and Trade and the Project Investor shall have the responsibility to agree on the source of funds for hiring legal advisors to ensure the progress of the project development.

Article 10. Inter-ministerial Working Group

1. Within fifteen (15) working days from the date of signing the MOU, the General Department of Energy submits to the Ministry of Industry and Trade for the establishment of the Inter-ministerial Working Group.

2. The composition of the Inter-ministerial Working Group includes:

a) The head of the group and some members of the Ministry of Industry and Trade;

b) Members of relevant ministries and agencies including: Planning and Investment, Justice, Finance, State Bank, People's Committee of the province or centrally governed city where the BOT Thermal Power Plant project is located, Vietnam Electricity Corporation (EVN), Vietnam National Coal-Mineral Industries Group (VINACOMIN) (for projects using domestic coal), Vietnam Oil and Gas Group (PetroVietnam) (for projects using domestic gas).

3. Main tasks of the Inter-ministerial Working Group:

a) Unify negotiation plans with the BOT Project Investor;

b) Organize and participate in negotiating the BOT Contract, GGU, and MOIT’s A&C;

c) Participate in resolving issues arising during the negotiation process of implementing the project.

4. Assignment of tasks and working methods of the Inter-ministerial Working Group:

a) The head of the inter-ministerial working group is the main negotiator;

b) Representatives of ministries, agencies, and localities are responsible for the contents related to their management areas and support the main negotiator according to their assigned functions and responsibilities;

c) The Inter-ministerial Working Group operates on a part-time basis.

5. Operating costs:

Operating costs of the Inter-ministerial Working Group are allocated from the state budget.

6. The duration of operation of the Inter-ministerial Working Group depends on the requirements of the BOT Thermal Power Plant project and is decided by the Ministry of Industry and Trade.

Article 11. Negotiation Organization

1. The negotiation of the Power Purchase Agreement (PA), Build-Operate-Transfer (BOT) Contract, General Guidelines for Investment (GGU), and the Ministry of Industry and Trade's Approval and Consent (A&C) shall only be conducted when the following conditions are met:

a) The Feasibility Study (FS) file has been approved by the Ministry of Industry and Trade;

b) The Ministry of Industry and Trade has selected the Legal Advisor;

c) The commencement date of negotiations is consistent with the schedule stated in the Memorandum of Understanding (MOU).

2. The Energy General Department coordinates the negotiation of project documents with the BOT Project Investor including:

a) Inter-ministerial Working Group: Organizing the negotiation of the BOT Contract, GGU, and MOIT’s A&C.

b) EVN organizes the negotiation of the Power Purchase Agreement (PPA) and the Confirmation and Consent document of EVN.

The PPA can only be approved after the Energy General Department provides its written opinion on the long-term fuel supply contract for the project and the selection results of the EPC Contractor for the project.

c) TKV organizes the negotiation of the Coal Supply Agreement (CSA) and the Confirmation and Consent document of TKV (for projects using domestic coal).

d) PVN organizes the negotiation of the Gas Supply Agreement (GSA) and the Confirmation and Consent document of PVN (for projects using domestic gas).

e) The locality where the project is located organizes the negotiation of the Local Land Agreement (LLA) and the Confirmation and Consent document of the locality.

EVN, TKV, PVN, and the locality must unify the negotiation plan with the BOT Project Investor and report to the Energy General Department.

3. The BOT Project Investor is responsible for negotiating simultaneously all project documents (including: BOT Contract, GGU, MOIT’s A&C; PPA; CSA; CTA; GSA; and LLA) with relevant Vietnamese partners to ensure the project schedule.

4. Negotiation of the PA, BOT Contract, GGU, and MOIT’s A&C:

a) Negotiation of the PA

Upon meeting the conditions set forth in Clause 1 of this Article, within fifteen (15) working days, the Energy General Department sends the draft PA to the BOT Project Investor.

The draft PA includes the following main contents: Basic definitions, contract duration, overall project schedule, required operational date, applicable laws, dispute resolution, risk allocation mechanism, tax regime, electricity pricing structure, land lease and fuel supply contracts, and basic principles of the GGU.

Within thirty (30) days from the date of receipt of the draft PA, the BOT Project Investor must provide comments on the draft content to the Energy General Department.

The negotiation of the PA can only commence fifteen (15) working days after receiving the comments of the BOT Project Investor.

The Energy General Department and the BOT Project Investor organize the signing of the PA after both parties have agreed on the detailed contents of the PA.

b) Negotiation of the BOT Contract, GGU, and MOIT’s A&C

The negotiation process is divided into two rounds, each round consisting of three sessions, each session lasting up to three (03) days.

Each negotiation round will only conclude once all articles and clauses of the contract have been negotiated. Unresolved contents will be carried over to the next negotiation round.

Prior to each negotiation round, the Energy General Department sends the draft BOT Contract, GGU, and MOIT’s A&C to the BOT Project Investor.

Within sixty (60) days from the date of receipt of the draft, the BOT Project Investor must send comments on the draft content of the BOT Contract, GGU, and MOIT’s A&C to the Energy General Department. Negotiations can only proceed thirty (30) days after receiving the comments of the BOT Project Investor.

At the end of each negotiation round, the Ministry of Industry and Trade seeks opinions from related ministries and sectors to serve as the basis for the next negotiation round.

The inter-ministerial working group continues to negotiate with the BOT Project Investor regarding the opinions of the ministries and sectors to finalize the draft BOT Contract, GGU, and MOIT’s A&C.

5. After completing two negotiation rounds, the Ministry of Industry and Trade reports to the Prime Minister the results achieved by the parties and unresolved contents requiring guidance from the Prime Minister.

The inter-ministerial working group will continue to negotiate with the BOT Project Investor according to the Prime Minister's instructions. Negotiations will only conclude when Vietnam and the BOT Project Investor have reached agreement on all contents of the project documents.

6. Within ten (10) working days from the end of negotiations, the Ministry of Industry and Trade submits to the Prime Minister for approval to organize the signing of the investment agreement with the BOT Project Investor.

Article 12. Completion of Project Documents and Signing of Investment Agreement

1. After the BOT Contract, GGU, and MOIT’s A&C have been agreed upon by both parties, the Legal Advisory supporting the Ministry of Industry and Trade must issue a document confirming the legality and accuracy of the contents and wording in the project documents for the Ministry of Industry and Trade to sign the investment agreement with the BOT Investor.

2. The BOT Investor must cooperate with relevant parties, finalize draft documents, and sign other project documents such as: PPA, CSA (or GSA), CTA, LLA, and report to the Ministry of Industry and Trade that they have signed.

3. Within thirty (30) days from the date when both parties agree on all contents of the BOT Contract and GGU, the Ministry of Industry and Trade shall organize the signing of the investment agreement with the BOT Investor regarding the BOT Contract, GGU, and MOIT’s A&C.

Chapter III

ISSUE INVESTMENT REGISTRATION CERTIFICATE,

SIGN PROJECT DOCUMENTS

Article 13. Issuance of Investment Registration Certificate

1. Within thirty (30) days from the date of signing the investment agreement, the BOT Investor must submit to the Ministry of Planning and Investment the application dossier for issuance of the Investment Registration Certificate.

2. The procedures and requirements for issuing the Investment Registration Certificate shall be carried out in accordance with Article 40 of Decree No. 15/2015/NĐ-CP dated February 14, 2015, of the Government on public-private partnership investment.

3. The BOT Investor is responsible for coordinating with relevant Vietnamese parties to explain opinions as required by the Ministry of Planning and Investment.

Article 14. Official Signing of the BOT Contract and Project Documents

1. Within thirty (30) days from the date of receiving the Investment Registration Certificate from the Ministry of Planning and Investment, the BOT Investor must establish a BOT Enterprise and complete the additional contents specified in the Investment Registration Certificate to officially sign the project documents.

2. The Energy General Department shall organize the official signing ceremony of the project documents between the BOT Investor and the BOT Enterprise with relevant parties, including:

a) Signing the BOT Contract and GGU with the Ministry of Industry and Trade;

b) Signing the PPA with EVN;

c) Signing the CSA with TKV (for projects using domestic coal);

d) Signing the GSA with PVN (for projects using domestic gas);

đ) Signing the LLA with the local authority where the project is located.

3. The BOT Enterprise is responsible for submitting the application dossier for the Legal Opinion of the Ministry of Justice according to the provisions of Decree No. 51/2015/NĐ-CP dated May 26, 2015, of the Government on issuing legal opinions.

Article 15. Resolution of Issues Arising During Financial Arrangements

The Energy General Department shall coordinate with the BOT Investor to resolve issues arising during financial arrangements. In cases exceeding their authority, they shall report to the Minister of Industry and Trade and request the Prime Minister's consideration and decision.

Article 16. Issuance of A&C

The Ministry of Industry and Trade, the People's Committee of the province or centrally governed city where the project is located, and EVN shall issue A&C to the BOT Enterprise according to the terms stipulated in the BOT Contract, LLA, and PPA.

Chapter IV

MONITORING AND SUPERVISION OF PROJECT IMPLEMENTATION

Article 17. Supervision of Project Contract Implementation and Quality Control

1. The supervision of project contract implementation shall be carried out in accordance with Article 47 of Decree No. 15/2015/NĐ-CP on public-private partnership investment and related legal documents.

2. The supervision of construction quality shall be carried out in accordance with Article 48 of Decree No. 15/2015/NĐ-CP dated February 14, 2015, of the Government on public-private partnership investment and related legal documents.

3. The Energy General Department shall take the lead and coordinate with relevant ministries and sectors to inspect the acceptance and commissioning of the works for use in accordance with Decree No. 15/2013/NĐ-CP dated February 6, 2013, of the Government on construction quality management and related legal documents.

4. The Energy General Department shall monitor the compliance of the Investor and BOT Enterprise with the progress of the project implementation and the terms stipulated in the BOT Contract.

Article 18. Reporting System

1. Monthly Report

During the construction of the power plant, the BOT Enterprise shall be responsible for preparing monthly reports to the Energy General Department and competent state management agencies on the fifth day of each month. The monthly report shall include:

a) Progress of work completed up to the reporting date;

b) Existing issues and recommendations (if any);

c) Planned activities for the following month.

2. Quarterly and Annual Reports

The BOT Enterprise shall complete quarterly reports on the fifth day of April, July, and September; and annual reports on the fifth day of January each year, to be submitted to the Energy General Department and competent state management agencies.

3. Ad Hoc Reports

In case of accidents, natural disasters, fires, or at the request of authorized state agencies, the BOT Enterprise shall promptly submit reports to the Energy General Department and relevant state agencies.

Chapter V

IMPLEMENTING PROVISIONS

Article 19. Effective Date

1. This Circular shall take effect from September 1, 2015.

2. Organizations and individuals participating in activities related to the investment of thermal power plant projects under the BOT Contract within the territory of Vietnam shall be responsible for implementing this Circular.

Article 20. Transitional Provisions

1. Projects already underway before the effective date of this Circular shall continue to be implemented in accordance with Article 72 of Decree No. 15/2015/NĐ-CP dated February 14, 2015, of the Government on public-private partnership investment.

2. MOUs signed prior to the effective date of this Circular do not need to be re-signed in accordance with this Circular.

3. PAs signed prior to the effective date of this Circular do not need to be re-signed in accordance with this Circular.

Article 21. Organization of Implementation

1. The Energy General Department shall be responsible for guiding the implementation of this Circular.

2. During the implementation process, if there are any difficulties, relevant ministries, localities, BOT Investors, BOT Investors, and related enterprises shall send their opinions to the Energy General Department and the Ministry of Industry and Trade for guidance./.