Background: a new legal framework for renewable power
Vietnam electricity demand keeps growing while energy-transition commitments require strong mobilization of social resources for renewable power development. The Law on Electricity No. 61/2024/QH15, passed by the National Assembly on 30 November 2024 and effective from 1 February 2025, replacing the 2004 Law on Electricity and its amendments, has created a new legal framework for the sector.
The Law comprises 9 chapters and 81 articles. Chapter III (Articles 20 to 29) specifically governs the development of renewable and new energy power; Chapter IV (Articles 30 to 37) covers electricity operation licenses; and Chapter V (Articles 38 to 52) addresses the competitive power market and power trading. Foreign investors in solar and wind power in Vietnam need to master these provisions together with the investment legal framework.
Investment forms for foreign investors in solar and wind projects
Under the Law on Investment 2025 (No. 143/2025/QH15, effective from 1 March 2026), foreign investors mainly invest in renewable power projects by establishing an economic organization (a 100 percent foreign-owned enterprise or a joint venture with a Vietnamese partner). After incorporation, the investor carries out project investment procedures as prescribed.
A critical note: power projects must conform to the power development master plan (Power Development Plan VIII and its implementation plan). A project outside the plan, or not approved for supplementation by the competent authority, cannot proceed. This is the first bottleneck investors must verify before committing capital.
Steps to develop a renewable power project
The typical development sequence for a solar or wind project in Vietnam includes the following key steps:
1. Master-plan conformity and investment policy approval
The project must fit within the power development master plan. Depending on scale and nature, it may require investment policy approval under the Law on Investment 2025 before an Investment Registration Certificate is issued.
2. Land, environment and construction
The investor completes land lease procedures, environmental impact assessment (or an environmental license) under the 2020 Law on Environmental Protection, and construction permits under construction law. Offshore wind projects involve additional procedures for sea-area allocation.
3. Electricity operation license
Under Chapter IV of the Law on Electricity 2024, organizations engaged in power generation must hold an electricity operation license issued by the competent state authority, except where an exemption applies. The license is a precondition for commercial operation.
4. Acceptance, commercial operation (COD) and grid connection
The project must complete construction acceptance, obtain approval of the acceptance results, sign a grid-connection agreement with the grid operator, and officially reach commercial operation date (COD). From COD, the plant generates power and is paid under the power purchase agreement.
Power purchase agreements (PPA): types and key contents
Chapter V of the Law on Electricity 2024 governs the competitive power market and power trading, including:
- PPA with the power purchaser (usually EVN / the Electricity Power Trading Company — EPTC): the traditional model, where the plant sells all or part of its output to a single buyer at a price agreed within the state-regulated price bracket.
- Forward, option and futures power contracts (Article 45): instruments of the competitive power market, with prices and volumes set through negotiation between buyer and seller.
- Direct power purchase agreements (DPPA): direct trading between renewable generators and large power consumers, regulated by the Government in Decree No. 57/2025/ND-CP dated 3 March 2025. This is a new offtake channel allowing investors to sell directly to large industrial customers without going through EVN. The first DPPA transaction in Vietnam was recorded in June 2026 between the TTC Duc Hue 2 solar plant and Samsung Electronics Vietnam Thai Nguyen (SEVT).
Key contents of a power purchase agreement
Under Article 44 of the Law on Electricity 2024, power purchase and power service contracts must be made in paper writing or data messages with equivalent validity. For contracts between a generating unit and the power purchaser, the key contents include: party information; the contract power price; contract power output (if any); invoicing, payment and payment terms; rights and obligations of the parties; Vietnamese as the language of use — where the seller involves foreign investors, the parties may agree to add an English-language version; and other contents as agreed.
Risks to watch: price renegotiation and acceptance conditions
Practice shows the biggest current risks for renewable projects in Vietnam lie in pricing and acceptance. In October 2026, EPTC asked the owners of 172 renewable power projects to renegotiate their PPAs for periods when the projects had not yet obtained approval of construction acceptance results, at prices not exceeding the transitional generation price caps (Circular 15/2022/TT-BCT and Decision 21/QD-BCT dated 7 January 2023 of the Ministry of Industry and Trade).
The Government Inspectorate conclusion (Notice 3116 dated 25 December 2023) stated that plants without approved acceptance results were not entitled to preferential (FIT) prices. Government Resolution 233 dated 10 December 2024 aims to resolve the bottlenecks on the principle of not legalizing violations. Foreign investors entering new projects or acquiring existing ones must carefully verify acceptance status and PPA price clauses to avoid inheriting the legal risks of previous owners.
Recommendations for foreign investors
- Master-plan check: confirm the project is in the power development plan or can be supplemented.
- Full legal due diligence: land, environment, construction, electricity operation license, acceptance status, existing PPA.
- Pricing assessment: applicable generation price bracket, DPPA potential with large customers, price scenarios in negotiation.
- Appropriate deal structure and partner selection, with protections against pricing-policy changes.
This article was prepared with review by the FLAW AI Legal Council and is pending QA Council review before submission to the owner for approval. It is not the opinion of a licensed human lawyer and does not replace legal advice for a specific case.
