A typical BOT SPV holds only a contract and a future cash flow — so its capital structure and governance must be designed for the lenders’ eyes, not only the shareholders’. There is no borrowed answer for an SPV in a power or infrastructure BOT project: the decision must be taken from the specific project file; it cannot be copied from a similar deal in another country — least of all for an SPV in a power or infrastructure BOT project.
1. The current legal framework
The foundation for capital structure and governance of SPVs in power and infrastructure BOTs is Law on Investment 143/2025/QH15 (effective 1 March 2026), not the former Law on Investment 61/2020. Investment Law 143/2025/QH15 distinguishes the two layers clearly — and an SPV in a power or infrastructure BOT project must respect that boundary; the remaining two doors are the BCC contract and PPP for infrastructure and public-service projects — an SPV in a power or infrastructure BOT project should not skip them. The second layer of capital structure and governance of SPVs in power and infrastructure BOTs is Law on Enterprises 59/2020/QH14: it governs the internal machinery of the LLC or JSC the investor will run after the Investment Registration Certificate is issued. Market-access conditions by sector are the decisive variable in capital structure and governance of SPVs in power and infrastructure BOTs: a sector on the restricted list caps both ownership ratio and available forms, whatever structure the investor prefers.
2. Analysis on the facts
Capital structure: high leverage, locked by contract. Power and infrastructure BOTs typically run high debt leverage on the investors’ equity base; Law on PPP 64/2020/QH14 requires investors to secure minimum equity of 15% of total investment (with higher ratios by project scale in the detailed contract and bidding requirements). Debt is drawn against progress and bound by financial covenants in the credit package, including debt-service coverage and a debt-service reserve account.
Reading the “minimum equity” question correctly. The 15% figure is the statutory floor for PPP projects, not the number lenders accept: banks commonly demand a higher equity ratio for revenue-risk projects, and equity must be injected before or alongside debt drawdown. Confusing the statutory floor with actual credit conditions is the most common financial-planning error in BOT projects.
SPV governance: three overlapping control layers. Layer one is corporate governance under the charter (members’ council or board, project management). Layer two is oversight by the PPP contracting authority: progress reporting and control over shareholder changes during construction. Layer three is lender control: a centralised revenue account, step-in rights when covenants break, and a list of decisions needing bank consent. An SPV charter drafted forgetting the last two layers gets sent back at credit appraisal.
3. Implementation sequence
The sequence to apply to an SPV in a power or infrastructure BOT project if supplement rounds are to stay rare is:
- The sector’s market-opening commitments under treaties to which Vietnam is a party must be checked as soon as an SPV in a power or infrastructure BOT project begins.
- For an SPV in a power or infrastructure BOT project, place at least two form options on a single criteria table — control, tax, timing and exit.
- Before filing an SPV in a power or infrastructure BOT project, agree the capital ratio and voting mechanics right inside the shareholders’ agreement or JV contract.
- For an SPV in a power or infrastructure BOT project: file at the provincial investment registration authority where the project is located; the enterprise file, separately, goes to the Business Registration Office in the case of an SPV in a power or infrastructure BOT project.
- Capital in an SPV in a power or infrastructure BOT project must be fully contributed on time; ICA records of an SPV in a power or infrastructure BOT project need to be kept complete to support later profit repatriation.
4. Risks and practical notes
The costliest mistake in capital structure and governance of SPVs in power and infrastructure BOTs is locking the form by home-country habit and only then discovering the sector is restricted in Vietnam. With an SPV in a power or infrastructure BOT project, a mistake corrected after the IRC has been issued always costs more than pre-checking, because the form change amends the project and the enterprise registration together. Exit economics only become visible late: with an SPV in a power or infrastructure BOT project, simulate the divestment path now, because the Vietnamese partner’s veto in the joint venture can turn the exit into the bottleneck.
5. Conclusion for the investor
Practical conclusion: capital structure and governance of SPVs in power and infrastructure BOTs has no universal answer — the right answer is the one matching the sector, the ownership ratio and the exit plan of that specific project. Three variables must be locked before any signing in an SPV in a power or infrastructure BOT project: sector, capital ratio, and who controls the vote; those three decide almost everything else in capital structure and governance of SPVs in power and infrastructure BOTs.
Frequently Asked Questions
How is the capital of an SPV in power and infrastructure BOTs structured?
The structure pairs investor equity (injected before or alongside debt) with project debt drawn against progress, locked by financial covenants such as debt-service coverage and a reserve account. Shareholders cannot withdraw capital freely because every capital change touches both the PPP contract and the credit package.
How is an SPV’s governance organised?
SPV governance has three layers: corporate governance under the charter; oversight by the PPP contracting authority (progress, shareholder changes during construction); and lender control through the revenue account, step-in rights and a bank-consent decision list.
What is the minimum equity ratio of an SPV?
Under Law on PPP 64/2020/QH14, minimum equity is 15% of a PPP project’s total investment, and bidding documents or the contract may require more by scale. That is the statutory floor; actual bank credit conditions are usually higher.
This article has been quality-reviewed by the FLAW AI Legal Council