Renewable energy investors are on edge.

Many renewable energy projects that have been connected to the grid and enjoyed preferential prices (Fit prices) are facing the risk of being prosecuted and having their money recovered, because they are being determined to have enjoyed incentives that are not in accordance with regulations.

Renewable energy project owner petitions authorities to remove obstacles - Photo: NH

A recent petition by a series of wind and solar power investors and financial institutions simultaneously sent to the authorities, expressed concern about the risk that signed power purchase contracts could be reviewed and the electricity purchase price adjusted.

Enjoying incentives incorrectly due to lack of acceptance certificate?

The reason is that although these 173 projects had a commercial operation date (COD) before or during 2021, there was no document approving the acceptance results at the time of COD.

The review is carried out according to the conclusion of the Government Inspectorate , when it was determined that the lack of documents and procedures related to COD does not meet the conditions for enjoying FIT price.

If this request is implemented, not only will a series of renewable energy projects face great risks, suffering losses equivalent to 100% of their equity, threatening 13 billion USD in investment, but a series of capital suppliers and financial institutions will also be affected.

This is in contrast to the previous period when attracting investment in renewable energy was considered a sweet fruit for many investors, with preferential policies from FIT prices.

Hundreds of thousands of billions of dong in investment capital have been poured into this field, with the expectation of connecting to the grid and COD before the preferential period.

However, this sweet fruit is turning into bitter fruit when the inspection agency said that it is expected that about 15,000 MW of wind/solar power will be affected if it is reconsidered, when most of these projects have only paid back about 30-40% of the total loan value.

Thus, with an investment level of about 1-1.3 million USD/MW for solar and wind power projects, the remaining debt balance of 15,000MW is estimated at about 10 billion USD, equivalent to more than 250,000 billion VND.

According to investors' calculations, if the electricity price is retroactively adjusted and the preferential price is no longer enjoyed, the electricity price will decrease by about 25% compared to the current price; and previous revenue will also have to be offset.

This leads to projects almost certainly being transferred to bad debt due to insufficient cash flow to repay debt, directly affecting the bad debt picture and cash flow of banks.

Large investment costs, equity capital has not yet been recovered

Some investors also shared that, despite investment incentives, in 2019 when projects were booming, because this was a new type of energy, investors had no experience and had to hire foreign consultants and contractors, which pushed up costs. In particular, the price of solar panels was also about 150-200% higher than the present.

Even many investors are under pressure to complete progress, in the context of the COVID-19 pandemic in 2020 - 2021, so many costs are pushed up very high.

Up to now, most of the new projects have only completed about 40% of the loan term of the credit contracts, the cash flow is only enough to pay interest and principal to the bank, and the equity has not been recovered.

At the same time, most of the projects had their electricity purchase output cut by EVN from a minimum of 20% to a maximum of 30%, causing the revenue of the power projects to not reach the original plan. Therefore, the preferential price is not enough to compensate for the investors' costs.

Still waiting for price plan to process

The Government has issued a resolution to remove obstacles for renewable energy projects subject to inspection and relevant parties have met to discuss but there is still no specific solution.

In a recent document sent to the Ministry of Industry and Trade , EVN said it had worked with investors, but recommended that the ministry have a specific electricity price plan as a basis for payment offset.

In the Prime Minister's decisions 11, 13, 38 on incentive mechanisms for renewable energy, for a project to be considered as COD before the time of decisions to encourage investment in renewable energy, it will need an initial test completion certificate, electricity operation license, and agreement on meter readings.

On June 9, 2023, the Ministry of Industry and Trade issued Circular 10 guiding the procedures for accepting energy projects, including the condition of "Acceptance", but at this time, all renewable energy incentive mechanisms have expired.

Source: https://tuoitre.vn/cac-nha-dau-tu-nang-luong-tai-tao-dang-dung-ngoi-khong-yen-20250309173758845.htm