Renewable energy projects in Vietnam are moving into a new phase: the feed-in-tariff era is over, the national power plan allocates enormous new solar, wind and storage capacity, and revenue now comes through negotiated power purchase agreements, auctions and direct corporate offtake. For investors, the opportunity is larger than the FIT boom – but the legal work is heavier. Here is how the market now works.
Where renewable energy projects make money now
Utility-scale solar and wind
New capacity is allocated through the power development plan and provincial lists, with tariffs set by negotiation or auction rather than fixed incentives. The bankability question has shifted from tariff level to offtake terms – curtailment risk, payment security and the adjustment formula.
Direct power purchase and rooftop
The direct power purchase mechanism lets large industrial consumers buy from renewable energy projects through the grid or private lines – creating creditworthy corporate offtakers as an alternative to the single utility buyer. Rooftop and onsite projects for factories ride the same demand, often structured as leases or build-own-operate service contracts inside industrial parks.
Acquisitions of operating projects
The busiest deal flow is secondary: buying licensed or operating solar and wind assets, where diligence concentrates on the power purchase agreement, land papers and the capacity allocation – the three documents that carry the value.
The approvals a greenfield project collects
A typical sequence: inclusion in the power plan or provincial allocation, investment policy approval, land lease, construction and fire-safety permits, electricity operation licence, and grid connection plus power purchase agreements. Sequencing is the discipline – our project advisory team runs the licence path while project finance counsel matches drawdowns to milestones. The broader entry-route options are mapped in our infrastructure investment overview.
Risk allocation lenders actually test
Curtailment: who bears the loss when the grid cannot take the power – and is any compensation mechanism written down? Payment security: what stands behind the offtaker’s obligations? Foreign exchange: revenue is in dong; debt is often not. Change in law: does the contract adjust, or does the investor absorb it? Renewable energy projects succeed or fail on these four answers long before construction begins.
Renewable energy projects FAQs
Can a renewable project be wholly foreign-owned?
Yes – generation is open to full foreign ownership through a Vietnamese project company, subject to the standard licensing chain. Grid transmission remains state-dominated, which is why connection terms deserve the scrutiny they get.
Is the market still attractive without feed-in tariffs?
More selective, and more professional. Returns now reward development skill and offtake negotiation rather than tariff timing – conditions that favour experienced investors over speculators. Sector plans and tariff decisions are published via the Ministry of Finance and the industry regulator.
Diligence on secondary deals: the three documents that carry the value
Diligence on renewable energy projects starts with the power purchase agreement: its remaining term, tariff, curtailment clause and any amendments signed during the FIT rush – unpapered side letters are common and worthless. The land file second: overlapping certificates, unfinished compensation and agricultural-conversion gaps account for most price chips in solar deals. The capacity allocation third: whether the project’s megawatts sit inside the current plan by name, because an allocation that exists only in a superseded document is a project that exists only on paper.
Buyers of renewable energy projects should also model the repowering question early. First-generation FIT projects are ageing toward equipment refresh; whether the tariff and land term survive a substantial upgrade differs case by case, and the answer moves valuation more than any discount-rate debate.
Battery storage and the next allocation cycle
Storage has moved from pilot to policy for renewable energy projects: co-located batteries improve a project’s dispatch profile and its standing in capacity allocations, and standalone storage is emerging as its own licensed asset class. Early movers are structuring storage as separate project companies beside the generation asset, keeping financing options open for both. Sponsors planning renewable energy projects for the next allocation round should reserve land and grid capacity for storage now, even if the battery investment decision comes later – retrofitting the paperwork costs more than reserving it.
Timeline and budget expectations for greenfield sponsors
From provincial allocation to commercial operation, renewable energy projects at utility scale realistically run thirty to forty-two months: a year of approvals and land work, a year of construction, and the balance consumed by grid connection testing and the operating licence. Onshore wind adds measurement campaigns at the front; offshore remains a longer, policy-dependent horizon. Development budgets cluster around a familiar split – land and clearance, the EPC contract dominating capital cost, and a professional-services line that sponsors under-budget at their peril, because the licence chain and the offtake negotiation are where the schedule is actually won. The pattern across successful sponsors is consistent: they spend early on securing bankable contracts, and let construction follow paper that lenders have already approved.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
