Power purchase and sale contract bottlenecks
Nhon Trach 3&4 power plant located in Dong Nai city is a national key project, invested by Vietnam Oil and Gas Power Corporation (PV Power), with a total investment of 1.4 billion USD, capacity of 1,624MW. This is the first LNG gas power plant project in Vietnam. When officially commercially generated electricity, the project will supplement more than 9 billion kWh of commercial electricity/year for the power system, ensuring national energy security and socio-economic development of the country.
From January 1, 2026, Nhon Trach 3&4 power plant officially participates in the competitive electricity market, but the biggest obstacle to date is that PV Power and Vietnam Electricity Corporation (EVN) have not agreed on Contract amending and supplementing No. 02 of the electricity purchase and sale contract (PPA) between the two parties related to the minimum long-term contract electricity output ratio (Qc) for Nhon Trach 3&4 Power Plant.
On March 31, 2026, PV Power sent a document to EVN and the Electricity Trading Company (EPTC) requesting to speed up the progress of the amended and supplemented Contract No. 02. Next, on April 29, 2026, PV Power continued to send a document on this issue to EVN, in which it clearly stated that the failure to agree on the terms mentioned in the amended and supplemented Contract No. 02 put great pressure on the cash flow of production and business activities and financial spending of PV Power. According to the document, this also "directly and seriously affects the ability to repay both principal and loan interest up to 8.2 billion VND/day. In particular, the immediate payment pressure for LNG fuel money is 1,400 billion VND/month, delayed signing and payment may cause suppliers to refuse to supply LNG to Nhon Trach 3&4 Power Plant, causing risks to the national power security system.
PV Power also emphasized the risk of reducing attractiveness to investors, while hindering efforts to lead capital flows into key energy projects in Vietnam, especially LNG power plant projects.
Investors speak out
In the national power source development orientation, LNG is considered a transitional power source to gradually replace part of coal-fired power and supplement flexibility for the system when renewable energy increases rapidly. According to the orientation in the adjusted Power Plan VIII, by 2030 Vietnam is expected to develop more than 20,000 MW of LNG gas power. This is considered one of the important components of the energy transition process in the coming period.
However, the issue of Nhon Trach 3&4 power plant related to the minimum long-term contract electricity output ratio (Qc) is of particular interest to LNG investors. Because Qc is of great significance to the project's capital mobilization capacity. With this mechanism, the electricity output corresponding to Qc will be committed by the electricity buyer to be paid according to the long-term contract, helping investors maintain stable cash flow to repay loans and ensure financial efficiency.
Decree 56/2025/ND-CP issued on March 3, 2025, in Article 15 stipulates: The minimum long-term contract output (Qc) is not less than 65% of the average multi-year electricity output of the gas power project, the application period is no more than 10 years.
PV Power's urging EVN to accelerate the progress of Contract Amendment and Supplement No. 02 is precisely to comply with the terms stated in Decree 56/2025/ND-CP.
Recently, the Ministry of Industry and Trade has announced a summary report, receiving and explaining comments on the draft amendment of Clause 4, Article 15 of Decree 56/2025/ND-CP - a document detailing a number of articles of the Electricity Law related to planning, investment and bidding for power projects.
The most concerned content is the mechanism for determining "long-term minimum contract electricity output" (Qc) for imported LNG gas power projects when the draft raises Qc from 65% to 75%. However, contributing opinions to the draft, the Hai Lang 1 LNG project investor consortium stated: "Although we respectfully acknowledge the proposal in the revised Draft on raising the proportion of long-term minimum contract electricity output (Qc) from 65% in 10 years to 75% in 15 years, we respectfully report that this adjustment is not enough to address the core barriers to feasibility to arrange finance.
Meanwhile, VinEnergo Energy Joint Stock Company proposed to increase the minimum contract electricity output when signing electricity purchase and sale contracts from 75% as stipulated in the Draft Decree to 95%. Increase the application time of the minimum contract electricity output when signing electricity purchase and sale contracts from 15 years as stipulated in the Draft Decree to 25 years.
Nam Trung Investment Joint Stock Company proposed applying a minimum Qc level of 90% for 20 years of operation for COD projects before December 31, 2031.
In the opposite direction, EVN believes that: "The proposal to increase the minimum long-term contract electricity output ratio from 65% to 75% needs to be carefully considered. In fact, this adjustment may not completely solve the problem of attracting investment because many investors still expect a higher rate, while at the same time it may significantly increase the electricity purchase cost of the system.
EVN proposed that the drafting agency consider continuing to maintain the minimum Qc ratio as currently regulated (65%) and study more appropriate solutions to remove difficulties in attracting investment in power sources, while limiting risks regarding the cost of electricity purchase of the system.
While waiting for the new decree amending and supplementing Decree 56/2025/ND-CP, the issue of Nhon Trach 3&4 power plant needs to have a way out soon. In the context of many LNG gas power projects being implemented, removing the bottleneck in the minimum long-term contract electricity output ratio will open up expectations for gas power development, contributing to energy development to serve double-digit growth. In particular, implementing the core goal of ensuring a solid energy supply for rapid and sustainable development, associated with the green transformation process and implementing the commitment to net zero emissions set out by the Resolution of the 14th Party Congress.
