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The phenomenon of Vietnamese enterprises massively applying for wind power investment projects and then selling them back to foreign enterprises to make a profit has been warned before, but now the project transfer market is even more bustling.

Current status of wind power project transfer in our country

Not only wind power projects but also renewable energy projects, in general, are being transferred more and more, but also many domestic investors take advantage of the legal loophole after the project is approved to be transferred to do business. There is a situation of "project surfing", at the same time increasing the problem of "begging-giving", taking advantage of preferential policies for renewable energy projects. The phenomenon of Vietnamese enterprises massively applying for wind power investment projects and then selling them back to foreign enterprises to make a profit has been warned before, but now the project transfer market is even more bustling.

The nature of the forms of transfer of wind power projects is preferential trading. That is, to develop this power source, that incentive may not be needed. Project transfer is a normal development trend of the market, but if not strictly controlled, it will affect the development speed and planning of renewable energy in general and wind power in particular. It comes from the fact that many businesses do not have experience, do not master the expertise in developing wind power projects, but still want to invest in the project with the purpose of transferring the project to make a profit. This can lead to a situation where a wind power project can be bought and sold many times without being able to deploy.

Reasons for transferring a lot of wind power projects

According to the Director of the Department of Electricity and Renewable Energy, Ministry of Industry and Trade, by the end of May 11, 2020, there were 92 projects or a part of solar power projects and 10 projects or a part of wind power projects. with a total capacity of nearly 6,000 MW already in commercial operation. A number of wind power and solar power projects have been transferred by Vietnamese investors to part or the whole of the project in the form of joint ventures, transfer of shares, etc. to foreign investors from Thailand. Lan, Philippines, China, Singapore, Saudi Arabia...

It can be seen that the transfer of all or part of an investment project is a normal operation in the market mechanism and is regulated in the Law on Investment. In addition, current Vietnamese law also allows the transfer of projects to foreign investors that fully meet the conditions for transferring investment projects in conditional industries. In addition, foreign investors often have better experience and capacity in investment and plant operation management, so domestic investment enterprises often support the participation of foreign investors in projects. the power project will bring the overall benefit more efficiently. On the other hand, foreign investors have good potential in terms of capital, technology, investment experience, factory operation... Therefore, the combination of domestic and foreign investors will bring better efficiency for the project and investors.

Risks from transferring investment projects for profit

When the share of renewable power sources (wind, solar) increases to a large enough level, simultaneous failures in several projects due to objective or intentional causes - can have serious impacts on the environment. national grid, affecting the ability to supply the electricity in a large geographical area. In addition, the granting of licenses or the application of current support mechanisms is not really tight and easily creates unusual incentives from which, when investors apply for projects with special incentives, Normally, and then transfer ownership to foreign investors, implicit profits will be generated by these unusual incentives, but it is very difficult for the State to handle when detecting violations, not to mention the Legal troubles with foreign investors will affect the investment environment.

Political issues and border sovereignty are sensitive issues that may affect the diplomatic relations of Vietnam and other countries. It cannot be denied that political issues are always sensitive to each country, especially during the period of disputes over sovereignty over sea and islands and the situation in the South China Sea between Vietnam and China is extremely "hot". Publicly restricting investment in some geographical areas with sensitive geopolitical positions or restricting investment related to investor's nationality, investment industry, etc. may cause tension in relations. diplomatic relations between Vietnam and other countries, negatively affecting the bilateral and multilateral cooperation of Vietnam in the international market.

It is often difficult for foreign investors to correctly identify the role of the project is affecting national defense and security in Vietnam. Most investors have the opinion that only acts such as trading in weapons and explosives, acquiring and purchasing large quantities of real estate by deceitful ways, "evading the law... are new." considered affecting national defense and security in Vietnam. Therefore, in fact, investors do not correctly recognize the role of the project in security and defense issues. In almost all cases, until receiving written notice of disapproval of an investment project proposal for the reason that the project is likely to affect national defense or security, investors Foreign investors still do not understand the reasons why investment projects are refused permits. This continues to hinder investors when they plan new investment strategies because investors will not know when the new project will "step in the footsteps" of the project that has been denied permission.

Solutions for limitation of transferring wind power projects for profit

First of all, it is necessary to build a safe legal corridor to attract international investment

Many investors “surfing” wind power projects almost do not have expertise in renewable energy or do not have enough financial resources, but they can apply for approval of projects, but the ultimate goal is to transfer to make a profit. The current legal corridor has many loopholes, so it is impossible to prevent the transfer of projects for positive profit. We cannot prohibit the transfer of projects because that would go against the policy of encouraging foreign investors to enter the domestic market under the Law on Investment 2020.

Currently, there are many preferential policies for renewable energy, which is also the reason for the trend of buying and selling wind power projects. The price of renewable electricity is also one of the attractive advantages for foreign investors, attracting many project transfers. However, because of the raging Covid-19 epidemic, many wind power projects were suspended, so many domestic investors quickly sold them to foreign investors.

In order to prevent the current situation of difficult-to-control project transfer, project bidding can be applied right from the time of licensing, rather than letting domestic investors apply for a project license. At the same time, carefully consider the purchase price of renewable electricity, as well as the preferential period to prevent businesses from racing with prices while the main goal of the state is to develop renewable energy, has not been achieved. Or it is possible to specify a project implementation time limit, specifically, for projects licensed for investment, the locality shall stipulate the time limit for project implementation. This will avoid the situation of buying and reselling projects, wasting resources, while renewable power projects are not deployed to the end. To do so, the current legal system needs to supplement regulations to avoid risks from transferring wind power projects to foreign enterprises.

Secondly, the policy of sustainable and stable development for renewable energy is a current urgency

According to the draft Power Planning VIII, in the period of 2021-2045, it needs about 3 million billion VND of investment for renewable energy, equivalent to 130 billion USD, or 5.2 billion USD per year on average. This is a huge source of capital. Not only need the national budget and investment capital of domestic investors but also the mobilization of foreign investment capital is very important. However, we need to select capable investors (both domestic and foreign) to avoid the situation of "surfing projects" as mentioned above, in addition to the impact of attracting foreign investment. to national defense and security of each region and each locality.

A series of wind power project development policies, investment and price support mechanisms such as Circular 02/2019/TT-BCT, Consolidated document 05/VBHN-BCT 2019, Decision 39/2018/ QD-TTg, … and many other legal documents have attracted many domestic and foreign investors to participate in Vietnam's renewable energy market. It can be seen that the current licensing of renewable energy projects which is quite easy and, without conditions to restrict the transfer of projects/project shares in key areas of national defense and security is a serious “loophole” needed to be resolved at this time. Furthermore, when Vietnam's demand for renewable energy increases, we need to avoid another foreign country that holds too much market share in this field.

The draft Power Plan VIII of the Ministry of Industry and Trade, which is being completed, has basically corrected and supplemented the shortcomings in the field of renewable energy in particular and wind power in particular, but has not taken into account national security issues. national energy security. Therefore, we need to institutionalize the regulations restricting the transfer of projects, the transfer of project shares should be included in the legal documents, this will be an important basis for attracting investment both in and abroad, minimizing the situation of asking for donations, lack of quality control of investors as at present.

Eliminating the "ask-give" mechanism for projects, selecting domestic and foreign investors fairly and healthily will limit risks in the field of renewable energy to energy security, environmental security. schools and national security. Transferring wind power projects to foreign investors should be encouraged but only to a limited extent because of the insurmountable limitations on attracting foreign investment in this field in our country at present.


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