Decision No. 30/2002/QD-BCN on the issuance of regulations on the management of investment in construction of independent power projects

Pursuant to …;

Regarding the issuance of regulations on managing investment and construction of independent power projects

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THE MINISTER OF INDUSTRY

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to the Electricity Law dated December 3, 2004;

Pursuant to Decree No. 105/2005/NĐ-CP dated August 17, 2005 of the Government detailing and guiding the implementation of certain provisions of the Electricity Law;

Pursuant to the laws on investment, construction, and bidding;

At the proposal of the Director of Energy and Petroleum Department,

DECISION:

Article 1. Issued herewith are the Regulations on Managing Investment and Construction of Independent Power Projects.

Article 2. These Regulations shall take effect fifteen days from the date of publication in the Official Gazette and shall supersede Decision No. 50/2002/QĐ-BCN dated November 25, 2002 of the Minister of Industry promulgating the Regulations on Managing Investment and Construction of Independent Power Projects.

Article 3. Ministries, ministerial-level agencies, government-affiliated agencies, provincial people's committees, heads of agencies and units, and individuals concerned shall be responsible for implementing these Regulations./.

 

REGULATIONS

On the management of investment and construction of independent power projects
(Issued together with Decision No.: 30/2006/QĐ-BCN dated August 31, 2006 of the Minister of Industry)

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Chapter 1

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This document stipulates the selection of investors, project preparation, project appraisal, project approval, project implementation, and investment management for independent power projects.

2. These regulations apply to organizations and individuals participating in the investment and construction of independent power projects.

Article 2. Independent Power Project

1. An independent power project (IPP) is an investment project for constructing power sources that do not use state budget funds for investment, operation, and sale of electricity according to the Electricity Law.

2. Independent power projects can be invested through Build-Operate-Transfer (BOT), Build-Own-Operate (BOO), or other forms as prescribed by law.

Article 3. Investment in independent power projects

1. The construction of independent power projects must comply with the approved national power development plan. For projects not included in the plan, approval from the competent authority must be obtained before project preparation.

2. The authority to approve the national power development plan is carried out in accordance with the Electricity Law. For small hydropower development plans, the Ministry of Industry approves the national small hydropower development plan, while the provincial People's Committee approves the provincial small hydropower development plan after reaching an agreement with the Ministry of Industry.

3. The State manages independent power projects in terms of policy, progress, and scale of investment in accordance with the laws on investment and construction.

4. Competent authorities permitting investment in independent power projects shall implement such permissions in accordance with the laws on investment management and construction.

Chapter 2

SELECTION OF INVESTORS, PROJECT PREPARATION, AND APPRAISAL AND APPROVAL OF INVESTMENT PROJECTS

Article 4. Selection of investors

1. To ensure the efficiency and sustainability of the project, the selection of investors for independent power projects is conducted through bidding. The bidding process follows the provisions of the law on bidding.

2. After the power development plan is approved, the Ministry of Industry announces the national power development plan, the national medium and small hydropower development plan, the provincial People's Committee announces the provincial power development plan, district power development plan, and provincial medium and small hydropower development plan. Based on the list of independent power projects being solicited for investment and the registration of participation in investment by domestic and foreign organizations and individuals, the competent authority for investment permission as stipulated in Clause 4, Article 3 of these Regulations shall organize bidding to select investors to develop the project and submit for approval as prescribed.

3. In special cases such as small-scale projects; projects aimed at supplying electricity to remote, difficult areas; projects where only one investor has registered to participate, or for other reasonable reasons, the competent authority for investment permission as stipulated in Clause 4, Article 3 of these Regulations shall decide to select investors through direct assignment.

Article 5. Registration to participate in investment projects

1. Organizations and individuals registering to participate in independent power generation projects must prepare an Investment Report for Group A projects or an Application for Investment Permission Report for Group B and Group C projects to be submitted to the competent authority for permission to conduct feasibility studies to proceed with investment.

2. The contents of the Investment Report and the Application for Investment Permission Report to be submitted to the investment permission authority include:

a) For Group A projects:

Implement according to the provisions on the content of the Investment Report as stipulated by laws on project management and construction.

b) For other projects:

- A letter requesting investment permission from the investor to the competent authority.

- Basic information about the investor: Legal status documents, business registration, organizational structure diagram, key personnel, experience and capability in implementing projects, financial and technical capacity, including a list of projects implemented in the last five years (including industrial and power projects) and the final audit report of the enterprise in the last three years. The investor is responsible for the accuracy of the reported information.

- Preliminary information about the registered project: Construction location; project objectives; main parameters regarding scale, capacity, investment capital, operational date, planning-related content at the industry and local levels, expected project implementation schedule, compensation volume, resettlement, project investment management, operation, business, and transfer organization (if applicable).

- Approval document for electricity purchase from Vietnam Electricity Corporation or wholesale and retail electricity sellers.

- In cases where projects are not resolved by the province, approval documents from the People's Committee of the province are required.

- Expected sources of funding for the project and loan commitments from credit institutions and banks.

- The investor's capital must account for at least 30%. In special cases, the competent authority may consider but not less than 20%.

3. The response time of the authority to investors regarding the Investment Report and the Application for Investment Permission Report is as follows:

a) For Group A projects: Within 30 days, the Ministry of Industry will review and report to the Prime Minister for investment permission.

b) For remaining projects: Within 20 days.

4. After the competent authority grants investment permission, the investor of the independent power generation project may proceed with the work of preparing the investment project according to regulations.

5. The content of the investment project shall be carried out in accordance with the law, including grid connection with the national power system, metering and control equipment carried out in accordance with agreements with Vietnam Electricity Corporation.

Article 6. Review and Approval of Investment Projects

1. The investor prepares and organizes the review, submitting to the competent authority for the review of the basic design in accordance with the law.

2. The authority to review the basic design is as follows:

a) The Ministry of Industry: Group A projects and projects with main works located in two provinces or more.

b) Department of Industry: Remaining Group B and C projects.

3. Within 30 working days (for Group A projects) and 20 days (for Group B and C projects) from the date of receiving complete and valid documents, the competent authority as stipulated in Clause 2 of this Article must provide a written opinion on the results of the basic design review of the project and notify the investor.

4. The content of the basic design review, in addition to complying with current regulations, must also review the safety of construction and operation of the works, design solutions, and construction of water reservoir dams (if any).

5. The investor organizes the review and approval of the investment project and makes an investment decision based on the results of the basic design review by the competent authority.

Chapter 3

IMPLEMENTATION OF INVESTMENT PROJECTS

Article 7. Technical design, total budget estimate

1. The project investor shall establish, organize the review and approval of technical design, construction drawing design, and total budget estimate based on the approved investment project and relevant laws.

2. The project investor is only permitted to commence construction of the project when at least the approved technical design for the commencement section has been completed and sufficient funds have been arranged for the project.

Article 8. Implementation of Projects

1. The implementation of investment projects must comply with regulations concerning construction permits, contractor selection, construction management, project management forms, contracts, settlement and final accounts as stipulated by law.

2. During the implementation process, the project investor must take appropriate measures to ensure that the project progresses as agreed, be responsible for the safety of the works, and organize construction to ensure the quality of the project.

3. Prior to putting the project into operation, the project investor must apply for an electricity operation permit in accordance with the provisions of the law.

Article 9. Termination of Project Implementation

1. After eighteen months for Group A projects, twelve months for Group B and C projects from the date the project is permitted to prepare for investment, if the project investor does not complete the establishment and approval of the investment project, the competent authority granting permission to invest may issue a document terminating the project to call for another investor to implement the project.

2. Two years after the investment project is approved for Group A projects, one year for other projects, if the project investor does not commence construction of the works, the competent authority granting permission to invest may issue a document terminating the project to call for another investor to implement the project..

Chapter 4

PROJECT MANAGEMENT FOR INDEPENDENT ELECTRICITY PROJECTS

Article 10. Reporting System

1. After the Investment Report or Investment Project is approved, the project investor shall submit a complete set of project files (including printed copies on A4 paper and electronic copies on CDs) to the Ministry of Industry and the Provincial Department of Industry for management and monitoring.

2. During the construction period, in the first week of each quarter and the first two weeks of each year, the project investor must report on the progress of implementing the project during the quarter and year to the Ministry of Industry and the Provincial Department of Industry.

3. During the operation period of the power plant, the project investor must report every six months on the operation status and safety of the works to the Ministry of Industry and the Provincial Department of Industry for monitoring.

4. The Provincial Department of Industry is responsible for compiling reports from independent electricity projects within its jurisdiction to report to the Ministry of Industry within one week of the deadline set by the project investor for reporting.

Article 11. Inspection and Supervision System

1. The Provincial Department of Industry is responsible for all independent electricity projects within its jurisdiction and must develop an annual inspection and supervision plan to implement it.

2. The Ministry of Industry directs and coordinates with the Provincial Departments of Industry to conduct inspections and supervision of independent electricity projects.

Article 12. Responsibilities of State Management Agencies for Electricity Activities and Electricity Usage

1. Monitor the implementation of projects by the project investor.

2. Examine and resolve, within their authority, the project investor's recommendations regarding issues related to project implementation.

3. Inspect and audit according to the provisions of the law.

Chapter 5

IMPLEMENTING PROVISIONS

Article 13. Responsibilities of Organizations and Individuals Investing in Independent Electricity Projects

Organizations and individuals investing in independent electricity projects are responsible for strictly adhering to this Regulation.

Article 14. Implementation Organization

The Energy and Oil Department is responsible for organizing, guiding, and coordinating with the Provincial Departments of Industry under central cities to inspect the implementation of this Regulation./.