Vietnam: Restructuring power sector in 2016 - 2020 period

Vietnam: Restructuring power sector in 2016 - 2020 period

The Prime Minister has improved the project on restructuring power sector in
2016 - 2020 with orientation up to 2025.

The main content of the project focuses on enhancing effectiveness of
production and business; continuously implementing activities of the power
sector under market mechanisms; strengthening openness, transparency,
equality and fair competition in the context of international integration.

The project states:

- In 2016 - 2018, to implement the equitization of Generating companies
(Gencos) under EVN, PVN and Vianacomin according to the plan approved by the
Prime Minister.

After equitization the Gencos still continuously stay under the Groups and
at least 51% of their shares held by the Groups. The Gencos must be
responsible to carry out the new power plant projects accordingly to Power
Planning VII (adjusted).

The Gencos must build and carry out the projects to enhance effectiveness of
business administration; ensure ability of high competition, profitable
production and business, increasing the ratio of equity capital for
development investment in accordance with requirements of domestic and
international financial organizations. Besides, it is necessary to encourage
renewable energy power plants to meet the conditions to be eligible to
directly participate in pilot competition electricity wholesale market.

-To continuously maintain the organizational model of the National Power
Transmission Corporation under form of the Single Member Company Ltd. with
EVN representative holding 100% of charter capital.

-To continuously maintain the organizational model of the Power Corporation
under form of the Single Member Company Ltd. with EVN representative holding
100% of charter capital. Building the regulatory mechanisms between the
Power Corporations to ensure requirements of the competition electricity
wholesale market. Step by step implementing the clear separation of
electricity distribution and retail costs of the Power Corporations.

-The National Power System Dispatching Center to continuously carry out the
function to operate the power system and power market. Building the project
for transferring the National Power System Dispatching Center into Single
Member Company Ltd for Operating Power System and Power Market,
independently accounting within EVN.

-To innovate the model of the Electricity Regulatory Agency (under MOIT) to
meet the requirements for managing, supervising activities of competition
electricity wholesale market and raise effectiveness of regulating
electricity activities

-In 2019 -2020, to continuously consider to withdraw the state capitals from
Gencos to below the dominant level and separate the Gencos from the Group
(when assessing operating results after two year equitization, ensuring
compliance with Prime Minister Decision on criteria and classification of
state enterprises)

-To let BOT power plants participate in competition electricity wholesale
market by the concrete cases as the projects which have been signed BOT
contract are rightly encouraged to participate in competition electricity
wholesale market, while the projects which haven't been signed BOT contract
must decrease their monopoly sale generation before participating in
competition electricity wholesale market.

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Link to Original Article:
http://nangluongvietnam.vn/news/en/policy-planning/restructuring-power-secto
r-in-2016-2020-period.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com