MINISTRY OF INDUSTRY AND TRADE -------	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 32/2015/TT-BCT	Hanoi, October 08, 2015

 

CIRCULAR

PROJECT DEVELOPMENT AND MODEL ELECTRICITY SALE CONTRACT APPLIED TO GENERATION PROJECTS USING SOLID WASTES

Pursuant to the Law on Electricity No. 28/2004/QH11 dated December 03, 2014 and the Law on amendments to the Law on Electricity dated November 20, 2012;

Pursuant to the Government's Decree No. 95/2012/ND-CP dated November 12, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Prime Minister’s Decision No. 31/2014/QD-TTg dated May 05, 2014 on mechanism for supporting generation projects using solid wastes in Vietnam;

At the request of Director of Energy Administration,

The Minister of Industry and Trade promulgates a Circular on project development and model electricity sale contract applied to generation projects using solid wastes

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular deals with development of grid-tied generation projects using solid wastes and provides a model electricity sale contract used for grid-tied generation projects using solid wastes in Vietnam (hereinafter referred to as model electricity sale contract).

Article 2. Regulated entities

This Circular applies to:

1. Investors in grid-tied generation projects using solid wastes.

2. Units managing and operating grid-tied generation projects using solid wastes (hereinafter referred to as operators).

3. Electricity buyers.

4. Organizations developing generation projects using solid wastes to sell electricity.

5. Relevant organizations and individuals (hereinafter referred to as entities).

Chapter II

DEVELOPMENT OF GENERATION PROJECTS USING SOLID WASTES

Article 3. Inclusion of generation projects using solid wastes in national planning for development of power sources using solid wastes.

1. Every investor in generation projects using solid wastes shall compile an application to propose the generation project using solid wastes according to regulations of law on construction investment and send it to the People’s Committee of the central-affiliated city or province (hereinafter referred to as province) where the project is located. In consideration of the proposal, the People’s Committee of the province shall compile an application for inclusion of the project in national planning for development of power sources using solid wastes (hereinafter referred to as application for project inclusion) according to Article 4 of this Circular and send it to the Ministry of Industry and Trade.

2. Within 05 working days from the day on which the application is received, if the application is not satisfactory, the Ministry of Industry and Trade (Energy Administration) shall send a request for completion of the application.

3. Energy Administration shall examine the application for project conclusion within 30 working days from the day on which the satisfactory application is received. Energy Administration may hire consultants to appraise the project where necessary. According to the appraisal result, Electricity Administration shall request the Minister of Industry and Trade or the Prime Minister to grant an approval.

Article 4. Application for inclusion of generation projects in national planning for development of power sources using solid wastes

1. A written request of President of the People’s Committee of the province for inclusion of the generation project in national planning for development of power sources using solid wastes.

2. Basic information about the investor: documents about the investor’s legal status, business registration, key personnel, experience, financial capacity, technologies, list of completed projects (including industrial and electricity projects),  if any.

3. Information about the proposed generation project using solid wastes:

a) The type of solid wastes and supply;

b) Necessity of the project, advantages and disadvantages, plan for extraction and use of solid waste sources (if any);

c) Project description: location, scale, area, items of the project; information about sector planning, landfill planning, and local construction planning;

d) Preliminary solutions: technical solutions, technologies and power; connection plan; installation plan; schedule and method of project management; general plan for compensation and relocation, and plan for assistance in infrastructural construction (if any); cost estimates;

dd) Environmental impact assessment;

e) Fire safety solutions and requirements in terms of national defense and security;

g) Total investment in the project; availability of capital sources and capital disbursement schedule; analysis of economic, financial, and social effects of the project.

4. Opinion of the Power Corporation or transmission network operator (if connected to the electricity transmission system) about the inclusion of project in the planning.

Article 5. Generation project using solid wastes

1. Investors may only formulate generation project using solid wastes within the national planning for development of power sources using solid wastes. The contents of the generation project using solid wastes must comply with effective regulations on construction management and regulations in Clause 3 of this Article.

2. If the project is divided into smaller stages and the total power of each stage is different, the investor must formulate the project by each stage. If the time of inauguration of the project is different by more than 06 months according to the schedule in the national planning for development of power sources using solid wastes, the investor must submit a report to the People’s Committee of the province and Energy Administration – the Ministry of Industry and Trade.

3. Apart from complying with regulations of law on construction management, the generation project using solid wastes must include the following contents:

a) Assessment of the effects of the connection plan on the local electricity system;

b) Estimated costs and technical solutions for dismantlement of the power plant using solid wastes after the project is completed.

Article 6. Requirements for construction safety and environmental safety

Investment in generation projects using solid wastes must comply with effective regulations on construction safety and environmental safety.

Chapter III

ELECTRICITY PRICES OF GENERATION PROJECTS USING SOLID WASTES

Article 7. Calculation of electricity prices

Before October 30, according to the costs and general price of the entire system, Energy Administration shall calculate power of generating sources using solid wastes and send the result to Electricity Regulatory Authority in order to calculate electricity prices of generation projects using solid wastes in the next year, then submit a report to the Minister of Industry and Trade and the Prime Minister for decision.

Article 8. Electricity prices of grid-tied generation projects using solid wastes

1. The buyers has the obligation to buy all electricity energy from grid-tied generation projects using solid wastes at the electricity prices at the delivery points (exclusive of VAT) as follows:

a) For generation projects that directly burn solid wastes: 2,114 VND/kWh (10.05 UScents/kWh);

b) For generation projects that burn gases from landfills: 1.532 VND/kWh (7.28 UScents/kWh).

2. Generation projects using solid wastes that apply electricity prices prescribed in Clause 1 of this Article shall not receive subsidies according to other regulations; electricity prices shall be adjusted according to the exchange rate between VND and USD.

3. Payment for electricity from generation project using solid wastes shall be fully included in annual plans for electricity prices of Vietnam Electricity.

Chapter IV

MODEL ELECTRICITY SALE CONTRACT FOR GENERATION PROJECTS USING SOLID WASTES CONNECTED TO THE GRID

Article 9. Application of model electricity sale contract to generation projects using solid wastes connected to the grid

1. The use of the model electricity sale contract for grid-tied generation projects using solid wastes connected to the grid (hereinafter referred to as model electricity sale contract) is compulsory between the grid-tied generation project using solid wastes and the buyer.

2. All electricity energy of grid-tied generation projects using solid wastes is generated from solid wastes.

Article 10. Content of the model electricity sale contract

1. Content of the model electricity sale contract is provided in the Appendix enclosed herewith.

2. The Buyer and Seller may add more content to the model electricity sale contract to clarify their responsibilities and entitlements but must not change its basic content.

Chapter V

IMPLEMENTATION

Article 11. Responsibility of regulatory authorities

1. Energy Administration has the responsibility to:

a) Annually calculate the capacity generating sources using solid wastes and send the result to Electricity Regulatory Authority;

b) Assist buyers and sellers in resolving difficulties related to the model electricity sale contract;

c) Disseminate this Circular, provide guidance, and inspect the implementation of this Circular.

2. Electricity Regulatory Authority shall calculate next year’s electricity prices according to capacity of generating sources calculated by Energy Administration, submit the result to the Minister of Industry and Trade and the Prime Minister.

3. The People’s Committees of provinces shall monitor and inspect the development of generation projects using solid wastes in their provinces according to the national planning for development of power sources using solid wastes and regulations of this Circular.

Article 12. Responsibilities of relevant entities

1. Vietnam Electricity shall calculate and include payment for electricity from generation projects using solid wastes in annual plans for electricity prices of Vietnam Electricity, and submit the plan to competent authorities for approval.

2. Every seller has the responsibility to:

a) Enter into a contract with the buyer according to the model electricity sale contract and electricity prices applied to generation projects using solid wastes prescribed in Article 8 of this Circular;

b) Install 3-price electricity meters according to effective regulations to count electricity and calculate payment;

c) Send a copy of the concluded electricity sale contract to Energy Administration within 30 days from the day on which it is concluded;

d) Comply with regulations on operation of the electricity system, electricity transmission system, electricity distribution system promulgated by the Ministry of Industry and Trade.

3. Every buyer has the responsibility to:

a) Enter into a contract with the buyer according to the model electricity sale contract and electricity prices applied to generation projects using solid wastes prescribed in Article 8 of this Circular;

b) Comply with regulations on operation of the electricity system, electricity transmission system, electricity distribution system promulgated by the Ministry of Industry and Trade.

Article 13. Transition clauses

With regards to electricity sale contracts concluded before the effective date of this Circular, the parties shall negotiate a supplementary appendix according to regulations of this Circular.

Article 14. Effect

1. This Circular comes into force from December 07, 2015.

2. Difficulties that arise during the implementation of this Circular should be reported to the Minister of Industry and Trade for revision of this Circular./.

 

PP MINISTER DEPUTY MINISTER Hoang Quoc Vuong

 

APPENDIX

MODEL ELECTRICITY SALE CONTRACT APPLIED TO GENERATION PROJECTS USING SOLID WASTES

TABLE OF CONTENTS

Article 1. Definitions

Article 2. Delivery and sale of electricity

Article 3. Connection, counting, and power plant operation

Article 4. Invoicing and payment

Article 5. Cooperation in force majeure events

Article 6. Contract duration

Article 7. Breach of contract, damages, and contract suspension

Article 8. Dispute settlement

Article 10. Entrustment, transfer, and restructuring

Article 10. Other agreements

Article 11. Commitment to contract execution

Appendix A: Agreement on system connection

Appendix B: Power plant specifications

Appendix C: Requirements before inauguration date

Appendix D: Other agreements

 

MODEL ELECTRICITY SALE CONTRACT FOR GENERATION PROJECTS USING SOLID WASTES CONNECTED TO THE GRID

 

BETWEEN

 

SELLER
[name]

 

AND

 

BUYER
[name]

 

 

TABLE OF CONTENTS

Article 1. Definitions

Article 2. Delivery and sale of electricity

Article 3. Connection, counting, and power plant operation

Article 4. Invoicing and payment

Article 5. Cooperation in force majeure events

Article 6. Contract duration

Article 7. Breach of contract, damages, and contract suspension

Article 8. Dispute settlement

Article 10. Entrustment, transfer, and restructuring

Article 10. Other agreements

Article 11. Commitment to contract execution

Appendix A: Agreement on system connection

Appendix B: Power plant specifications

Appendix C: Requirements before inauguration date

Appendix D: Other agreements

 

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------

ELECTRICITY SALE CONTRACT

Pursuant to the Law on Electricity No. 28/2004/QH11 dated December 03, 2014 and the Law on amendments to the Law on Electricity dated November 20, 2012;

Pursuant to the Law on Commerce dated June 14, 2005;

Pursuant to the Prime Minister’s Decision No. 31/2014/QD-TTg dated May 05, 2014 on mechanism for supporting generation projects using solid wastes in Vietnam (hereinafter referred to as Decision No. 31/2014/QD-TTg);

Pursuant to Circular No. 32/2015/TT-BCT dated October 08, 2015 of the Minister of Industry and Trade on project development and model electricity sale contract applied to generation projects using solid wastes (hereinafter referred to as Circular No. 32/2015/TT-BCT);

In consideration of demands of both parties,

[date and location]

Seller: _______________________________________________________________

Address: _____________________________________________________________

Tel: ___________________________ Fax: __________________________________

TIN: _________________________________________________________________

Account No.: __________________________ At _____________________________

Representative: _____________________________________________________________________

Position: _____________________________________________ (authorized by ____

__________________________________________________ under letter of attorney

No. _______________________________, dated ____________________ )

Buyer: _______________________________________________________________

Address: _____________________________________________________________

Tel: ___________________________ Fax: __________________________________

TIN: _________________________________________________________________

Account No.: __________________________ At _____________________________

Representative: _______________________________________________________

Position: ____________________________________________ (authorized by ____

__________________________________________________ under letter of attorney

No. _______________________________, dated ____________________ )

hereby enter into this electricity sale contract with the following contents:

Article 1. Definitions

In this contract, the terms below are construed as follows:

1. Creditor means the entity that grants a loan to the seller or the buyer to execute this contract. The parties shall notify each other of the list of creditors according to Article 6 of this Contract.

2. Party means the seller or the buyer or the unit that receives the rights and obligations of either party of this Contract

3. Connection point means the position at which the seller’s line is connected to the buyer’s electricity system as agreed in Appendix A of this Contract.

4. Delivery point means the location where the seller’s equipment for counting sold electricity is installed.

5. Sold electricity means electricity energy (kWh) generated by the power plant within minus (-) electricity energy that is lost and consumed by the power plant which the seller sells and delivers to the buyer every year. More details in Appendix B of this contract.

6. Contract includes this document and appendices enclosed hereto.

7. Average interbank interest rate means the average monthly interbank interest rate announced by the State bank on the payment date.

8. Contract year means a solar calendar year, which consists of 12 months beginning on January 01 and ending on December 31, except for the first contract year which begins on the inauguration date and ends on December 31 of that year. The last contract year ends on the last date of the contract duration.

9. Contractual payment date means the 15^th day from the day on which the buyer receives the electricity bill from the seller.

10. Inauguration date means the day on which the seller can start delivering electricity according to this Contract or the day on which the seller starts delivering electricity to the buyer according to this Contract and the buyer has to pay for the delivered electricity according to Appendix C of this Contract.

11. Power plant consists of every generating equipment, protective equipment, connection equipment, and ancillary equipment; land area for electricity works and ancillary works serving the seller’s electricity generation according to this Contract.

12. Electricity standards and regulations are regulations, standards, and practice of the electricity sector promulgated by competent authorities of Vietnam, international organizations, or other countries if conformable with regulations of law, recommendations of manufacturers of equipment with account taken of available resources, fuel, and technologies acceptable to the electricity sector of Vietnam at a certain time.

13. National electricity system operation regulations are the Circulars and regulations that provide for electricity system operation standards, conditions and procedures for connection to the grid, electricity system dispatching, and electricity counting in the transmission and distribution system.

14. Emergency case means a case that might interrupt the supply of electricity for the buyer’s customers, including the cases that could cause major damage to the national electricity system, threaten life, property, or affect the operation of the power plant.

Article 2. Delivery and sale of electricity

1. Delivery of electricity

a) From the inauguration date, the seller agrees to deliver and sell electricity to the buyer; the buyer agrees to buy electricity from the seller in accordance with this Contract.

b) The buyer has the obligation to buy all electricity delivered to the buyer’s gird at the prices prescribed in Clause 2 of this Article.

c) The seller is entitled to environmental benefits as prescribed by law and international agreements.

2. Electricity prices

The Prime Minister’s Decision No. 31/2014/QD-TTg and Circular No. 32/2015/TT-BCT shall apply to electricity prices under this Contract. To be specific:

a) For generation projects that directly incinerate solid wastes: 2,114 VND /kWh (10.05 UScents/kWh).

b) For generation projects that burn gases from landfills: 1,532 VND/kWh (7.28 UScents/kWh).

3. Electricity sale

The seller agrees to operate the power plant at available power of equipment and in accordance with electricity standards and regulations. The seller is not legally responsible for direct damage incurred by the buyer due to the seller’s inability to supply sufficient electricity that is not on account of the seller. In case the seller reduces the amount of electricity without a written consent of the buyer in order to sell electricity to a third party or for another purpose other than generation of electricity for sale, the seller shall not be exempt from legal responsibility.

4. Operation plan

a) By the effective date of this Contract, the seller shall provide the buyer with a graph of average generation capacity at the busbar of the plan by each month which is suitable for the fundamental design of the power plant and graphs of generation capacity according to quantities of solid wastes in previous years;

b) The seller shall provide the buyer with an annual generation plan which consists of:

- Monthly operation plan (electricity generation and available power);

- Schedule for maintenance of generating sets in the year (if any).

c) The seller must provide information about the plan for maintenance, repair, and operation of generating sets to electricity system dispatch unit in charge according to regulations of law on operation of the national electricity system.

5. Suspension of generation

The seller shall notify the buyer of the planned and unplanned suspension of generation for repair and duration thereof in accordance with regulations on operation of the national electricity system.

6. Grid operation

a) The seller has the responsibility to manage, operate, and maintain equipment of the grid within the scope of property management under agreements with grid managing units, ensure conformity with regulations on operation of the national electricity system, electricity standards and regulations, and this Contract.

b) The seller must discuss and reach a consensus with the national electricity system management unit on a plan for mobilizing power sources and solutions for reducing impact on the local transmission grid due to the restrictions on load and local grid.

7. Interruption to purchase of electricity

The buyer is not required to buy or receive electricity in the following cases:

a) The seller’s power plant is not operated or maintained  in accordance with regulations on the national electricity system and electricity standards and regulations.

b) The buyer is installing, repairing, replacing equipment, inspecting the grid that involves the connection to the seller’s power plan;

c) The transmission or distribution grid connected to the buyer’s grid malfunctions or equipment on the grid directly connected to the buyer’s transmission, distribution grid malfunctions;

d) The buyer's grid needs support to recover from the malfunction according to regulations on operation of the national electricity system and electricity standards and regulations.

8. Interruption to sale of electricity

The seller may suspend the generation or reduce the amount of electricity sold to the buyer in case of installation, repair, replacement of equipment, inspection or repair of the power plant which directly affect the delivery of electricity to the buyer.

The seller must send an advance notice to the buyer at least 10 days before suspending the generation or reducing the amount of electricity delivered to the buyer. The notice must specify the reasons and expected duration of suspension.

9. Cooperation

The buyer has the responsibility to minimize the interruption period in the cases mentioned in Clause 7 of this Article. In emergency cases in which reduction or suspension of electricity received is necessary, the buyer must send an advance notice to the seller at least 10 days. The notice must specify the reasons and expected duration of suspension. If necessary, the buyer must send the seller the dispatch orders received from the electricity system dispatch unit that are relevant to the plan operation and the seller must adhere to such orders unless they require changes to specifications of the plant.

10. Power coefficient

The seller agrees to operate the power plant synchronously with the buyer’s grid to deliver electricity at the delivery point, with the voltage and power coefficient from 0. 85 (reactive power generation mode) to 0.9 (reactive power receipt mode) as prescribed in Appendix A. Unless otherwise required by the buyer, the seller’s power plant must be operated with the power coefficient determined according to regulations on distribution grid at the delivery point.

11. Synchronous operation

The seller send a written notification to the buyer at least 30 days before the first synchronization of generating sets at the seller’s power plant with the buyer’s grid. The seller must cooperate with the buyer in the first synchronization and the next.

12. Standards

The seller and the buyer must comply with regulations on delivery of electricity on the distribution grid, regulations on electricity counting, and legislative documents on electricity.

13. Change of inauguration date

Within 6 – 12 months before the inauguration date written in Appendix A, the seller must officially confirm the change of the inauguration date. Both parties must practice cooperation. The buyer must not refuse if no justifiable explanation is provided.

Article 3. Connection, counting, and power plant operation

1. Responsibility at the delivery point

The seller has the responsibility to invest in and install equipment to transmit and deliver electricity to the buyer at the delivery point. The buyer has the responsibility to cooperate with the seller in the installation of such equipment.

2. Connection

a) The seller has the responsibility to invest in, build, operate, and maintain equipment for connecting the plant with the transmission, distribution grid in accordance with regulations on transmission, distribution grid and relevant regulations. The seller shall bear the cost of upgrading the counting system at electrical substations to count active and reactive power in both directions on the distribution line connected with the power plant as prescribed in Appendix A of this Contract.

b) The buyer is entitled to examine and inspect the adequacy of protective equipment.  The buyer must send a written notification of the inspection result to the seller within 30 days from the day on which sufficient technical documents about the design is received. The buyer must notify the discovered errors in writing. The seller must make the adjustments requested by the buyer if they are conformable with regulations on the national electricity system and electricity standards and regulations.

3. Connection standards

Equipment of the seller and the buyer must be installed, operated, and connected in accordance with regulations distribution grid.

4. Inspection of fulfillment of connection standards

After an advance notice is sent, either party is entitled to inspect connection equipment of the other party to ensure adherence to regulations of law on operation of the national electricity system. The inspection must not affect the operation of the inspected party. In case the inspected party’s equipment does not satisfy requirements in terms of operation and maintenance, the inspecting party must notify the inspected party of necessary measures. The inspected party must implement the necessary measures at the request of the inspecting party.

5. Excited generators

If the seller’s power plant has excited generators, the seller must install capacitors to adjust the power coefficient of each generator. The capacitors shall be turned on and off synchronously with each excited generator. The reactive power (KVAr) of capacitors must reach the highest value but not exceeding no-load KVAr of the generators. The seller must pay the seller for the electricity used to operate excited generators if such electricity is extracted from the buyer’s grid at the retail price at corresponding voltage. This payment is specified in Article 4 of this contract.

6. Counting

a) The seller has the responsibility to:

- Install and maintain primary and backup electricity meters used for counting electricity and issuing invoices;

- Prepare a place for installing electricity meters if the connection point is located at the power plant.

b) Electricity meters must:

- Conform to regulations on counting and relevant regulations;

- Be able to store and record active and reactive electricity in both directions;

- Be able to transmit data to the places requested by the buyer;

- Be sealed, able to record and store a large amount of data.

7. Electricity meter readings

Every month (or another period agreed by both parties), the seller and the buyer shall record the electricity meter readings.

After an advance notice is sent, the buyer is entitled to enter the power plant where the meter is installed, record the readings, and perform other tasks related to fulfillment of obligations under this contract. The buyer’s entry into the power plant must not affect the seller’s normal operation. The employees or inspectors sent by the buyer to the power plant must comply with regulations on safety and other rules of the power plant.

8. Electricity meter inspection

a) The inspection of electricity meters or confirmation of accuracy of electricity meters must be carried out in accordance with regulations on electricity counting promulgated by a competent organization or authorized organization. An inspection shall be carried out before the electricity meter is used for the first time to record the electricity sold by power plant. All electricity meters shall be sealed and locked after the inspection is complete and the buyer is entitled to witness the entire process.

b) All electricity meters of the power plant must undergo annual inspection in accordance with regulations on electricity counting. The inspection cost is incurred by the seller. If necessary, either party may request an inspection of accuracy of any electricity meter and incur the inspection cost. The inspection result must be notified to the other party on request. If the deviation of the electricity meter exceed the permissible limits, the seller must adjust or replace the meter, return the excess payment to the buyer plus (+) an interest thereon at basic interest rate and the inspection cost. Either party is entitled to send their personnel to remove the seal, inspect, and reseal the electricity meter after an advance notice is sent. The party believes that an electricity meter is broken down or not working must immediately notify the other party, which has the responsibility to check and repair.

9. Transfer of electricity ownership

At the delivery point, ownership of electricity is transferred from the seller to the buyer. At this point, the buyer has the right to own, control the received electricity, and take responsibility for it. Electricity transmitted is a 3-phase alternative current with a frequency of 50 Hz and the voltage prescribed in Appendix A of this contract.

10. Power plant operation

The seller must operate the power plant in accordance with regulations on distribution grid, electricity regulations, and relevant regulations.

Article 4. Invoicing and payment

1. Invoicing

Every month (or another period agreed by both parties), the seller and the buyer shall read and record the electricity meter readings to determine the amount of electricity delivered in the month. The seller shall record the readings on a form which is certified by the buyer’s representative and send the readings together with an invoice to the buyer within 10 working days after the electricity readings are recorded. The documents may be faxed first and sent later.

2. Payment

a) The buyer shall pay the seller for the electricity received by the contractual payment date prescribed in Clause 9 Article 1 at the price prescribed in Clause 2 Article 2 of this Contract.

b) If the buyer fails to pay by the aforementioned deadline, the buyer shall pay an interest on the amount paid behind schedule at the average interbank monthly interest rate beginning from the day after the contractual payment date.

c) If the buyer does not record the electricity readings together with the seller as prescribed in Clause 1 of this Article, the buyer still has to pay the seller for the amount of electricity delivered as prescribed.

d) The seller shall pay the buyer for electricity distribution under the Contract (if any).

3. Estimation of sold electricity

In case there is not enough data to determine the amount of electricity or the amount of payment the buyer owes to the seller, except for the cases mentioned in Clause 4 of this Article, the seller must estimate such data and adjust the next payments to match the reality.

4. Order of application and replacement of electricity meter readings

In order to determine the amount of electricity received by the buyer in a period, the recording of electricity, invoicing, and payment must be based on the figures estimated in the following order:

a) Readings of the primary meter at the power plant in the period, the accuracy level of which is conformable with Clause 8 Article 3 of this Contract;

b) Readings of the backup meter at the power plant if its accuracy level is conformable with Clause 8 Article 3 of this Contract;

c) In case all meters fail to accurately record the amount of electricity delivered, it must be estimated according to the average monthly value of the power plant in the year preceding the contract year, and adjusted when invoices are issued according to available parameters that reflect the impact on the generation of the power plant such as biomass, productivity of generating sets, hours of operation, time of operation of generating sets, and self-consumption of electricity (hereinafter referred to as operating parameters) during the period in which the meters malfunction.

If there are no reliable parameters, delivered electricity shall be determined according to average generation of the power plant over the previous 06 periods before the meters malfunction (of a shorter period if the power plant has operated for less than 6 months) and adjusted according to the duration of suspension or operating parameters.

5. Disputes over invoices

a) The party that disagrees with all or some of the invoices for electricity or payments is entitled to send a notice to the other party before the contractual payment date. If the parties cannot settle the dispute after the notice is sent, the case must be negotiated within 01 years from the day on which the buyer receives legitimate invoices.

b) After the dispute is settled according to Clause 1 and Clause 2 Article 8 of this Contract: If the seller wins the case, the buyer must pay amount under dispute to the seller plus (+) an interest at average interbank interest rate for the period from the contractual payment date to the actual payment date. If the buyer wins the case, the seller must return the amount under dispute to the buyer plus (+) an interest at average interbank interest rate for the period from the contractual payment date to the actual payment date. The payment must be made within 15 days from the day on which the final decision on dispute settlement is made according to Article 8 of this Contract.

Article 5. Force majeure events

1. Force majeure events

Force majeure event is an inevitable event that occurs beyond the reasonable control of either party though every necessary and practical measures have been taken. Force majeure events include:

a) A decision made by a competent authority that affects either party’s ability to fulfill their obligations;

b) Natural disaster, conflagration, explosion, flood, tsunami, epidemic, earthquake;

c) Riot, rebellion, war, opposition, sabotage, embargo, siege, blockade, any war or hostile activities whether a war is declared;

d) Nationalization, expropriation, or confiscation of the seller’s property under a decision of a competent authority;

e) Other reasons beyond the reasonable control of the party that suffers from the force majeure event.

2. What to do in a force majeure event

In case of a force majeure event, the party that suffers from the force majeure event must:

a) Quickly send a written notification of the force majeure event to the other party, specify the reasons and provide proof of the force majeure event, estimate the duration and impact of the force majeure event to the fulfillment of their obligations;

b) Make every effort to fulfill their obligations under the contract;

c) Quickly take necessary actions to relieve the force majeure event and provide proof of their effort.

d) Implement necessary measures to minimize damage to the parties;

dd) Notify the parties of the end of the force majeure event.

3. Consequences of force majeure event

After having taken all measures prescribed in Clause 2 of this Article, the violating party shall be exempt from the responsibility for their failure to fulfill their obligations under the Contract because of the force majeure event.

4. Duration of force majeure event

If a party fails to fulfill their obligations under this Contract because of a force majeure event, within 01 year, the other party is entitled to unilaterally terminate this Contract after 60 days from the day on which a written notice is sent, unless the aforesaid obligations are fulfilled during this 60-day period.

Article 6. Contract duration

This Contract comes into force from …………. And expires after 20 days from the inauguration date. After the contract expiration, contents of this Contract are still effective for a period enough for parties to issue the final invoices, adjust invoices, make payments, and exercise their rights and fulfill their obligations under this contract.

Article 7. Breaches of contract, damages, and contract suspension

1. Breaches of contract committed by the seller

a) The seller fails to adhere to the inaugurate as prescribed in Appendix A within 03 months, except for force majeure events;

b) The seller fails to implement or adhere to the Contract within 60 days from the day on which the buyer makes a written notice;

In case the seller or the seller’s creditor has make taken remedial measures within 60 days but fails to complete the remediation by the aforesaid deadline, the seller or the seller’s creditor may extend the time limit to up to 01 year from the day on which a notice of the seller’s breaches is made. The seller must complete the remediation as soon as possible except for the cases mentioned in Article 5 of this Contract;

c) The seller denies part of or the entire Contract;

d) The seller violates their commitment according to Article 10 of this contract.

2. Breaches of contract committed by the buyer

a) The buyer fails to implement or adhere to the Contract within 60 days from the day on which the seller makes a written notice;

In case the buyer or the buyer’s creditor has make taken remedial measures within 60 days but fails to complete the remediation by the aforesaid deadline, the buyer or the buyer’s creditor may extend the time limit to up to 01 year from the day on which a notice of the buyer’s breaches is made. The buyer must complete the remediation as soon as possible except for the cases mentioned in Article 5 of this Contract;

b) The buyer fails to make payment under the contract when it is due for over 90 days without acceptable explanation;

c) The buyer denies part of or the entire Contract;

d) The buyer seriously violates their commitment according to Article 10 of this contract.

3. Procedures for remediation and settlement of breaches of contract

a) In case of breaches of contract, the aggrieved party shall send a written notice to the violating party. The violations party must cooperate to settle the case;

b) The creditor of the violating party is entitled to remedy the breaches of contract or appoint a third party to do so, provided a written notice is sent to the aggrieved party. In this case, the act of the creditor on behalf of the violating party must not increase the aggrieved party’s financial burden. The aggrieved party must allow the creditor or third party to remedy breaches of contract on behalf of the violating party. The creditor of the violating party shall send a written notice to aggrieved party and reach an agreement with aggrieved party on a reasonable time limit for fulfillment of the violating party’s obligations under this Contract.

4. Compensation for damage

a) The party that commits breaches of contract has to pay compensation for the damaged caused for the aggrieved party. The value of compensation include actual and direct damage caused by the violating party for the aggrieved party and the profits to which aggrieved party would have been entitled if no breaches were committed;

b) The aggrieved party must prove the damage caused by the breaches of contract and the profits to which aggrieved party would have been entitled if no breaches were committed.

5. Contract suspension

In case a breach of contract is not settled as prescribed in Clause 4 of this Article, the aggrieved party may keep requiring the violating party to take remedial measures or suspend the Contract by sending a notice to the violating party. After the aggrieved party chooses to suspend the Contract, the parties are no longer required to fulfill their contractual obligations, except for the cases mentioned in Clause 1 of this Article and aggrieved party is entitled to request the violating party to pay damages.

If the seller is the aggrieved party and chooses to suspend the contract, the damages shall equal the value of electricity generated by the seller over the last year before the contract suspension date.

Article 8. Dispute settlement

1. Dispute settlement through negotiation

In case of a dispute between the parties to this Contract, the dispute that raises the dispute must send a written notification to the other party of the issues under dispute and requests within the time limit. The parties shall negotiate within 60 days from the day on which the notification of the dispute is received. Dispute over payment for electricity shall be settled within 15 days from the day on which the notification is received.

If the dispute cannot be settled, the parties may send a written request for assistance to Energy Administration.

This dispute settlement mechanism does not apply to disputes that do not arise from this Contract between a party to this Contract and a third party.

2. Settlement of disputes on the electricity market

If a dispute cannot be settled through negotiation as prescribed in Clause 1 of this Article or either party does not adhere to the negotiation result, either party may have the dispute settled according to Circular No. 40/2010/TT-BCT or select another dispute settlement agency to settle the dispute according to relevant regulations of law.

Article 10. Entrustment, transfer, and restructuring

1. Entrustment and transfer

In case this Contract is entrusted or transferred, regulations on rights and obligations of this Contract are still effective to legal representatives and authorized representatives of the parties.

In case the seller’s transfer or entrustment of the Contract must be agreed by the buyer in writing, unless the seller entrusts part of or the entire contract to the creditor in order to take loans, purchase equipment, or build power plants. If the value of the part entrusted by the seller is equivalent to value of operational equipment, the entrustment is considered legitimate under this Contract.

The entrusting or transferring party must immediately send a written notice of the entrustment or transfer to the other party.

2. Restructuring

In case of restructuring of the electricity sector that affects the rights or obligations of either the seller or the buyer to this Contract, the contract execution shall be transferred to the transferee. The buyer has the responsibility to confirm and guarantee in writing the fulfillment of obligation to buy or distribute electricity, other interests and duties under this Contract by the transferee.

3. Option to participate in the electricity market

The seller has an option to participate in the electricity market according to regulations on competitive electricity market. In this case, the seller must send a notice to the buyer and Electricity Regulatory Authority 120 days beforehand, and is entitled to unilaterally terminate this Contract after the notice is sent.

Article 10. Other agreements

1. Contract revisions

Revisions to this Contract shall be made in writing under agreements between both parties in accordance with Circular No. 32/2015/TT-BCT;

2. Responsibility to cooperate

The seller has the responsibility to follow legal procedures related to the power plant. The buyer has the responsibility to cooperate with the seller to obtain necessary licenses, approvals, permissions from competent authorities related to location of the plant, control of natural resources, investment, transmission or sale of electricity, ownership and operation of the power plant, including provision of documents and other necessary tasks to implement the agreement between the parties.

3. Applied laws

This Contract shall be interpreted and executed in accordance with Vietnam’s laws.

4. Renunciation of rights

Either party’s renunciation of their rights under this Contract at any time will not affect the exercising of rights subsequently. Both parties agree that a party’s renouncement of their rights to any commitment or condition under this contract, or any breach of contract does not mean that party renounces their similar rights subsequently.

5. Independence of contract contents

Any content of this Contract that is considered unconformable with law or annulled by a court, other contents are still effective if they are not related to the annulled content.

6. Notification

Every notification, invoice, or exchange of necessary information during the execution of this Contract must have a specific date and relation to the Contract. Notifications, invoices, and exchange of information must be made in writing and sent by fax or by post. If sent by fax, the original copies must be sent later by post (prepaid services). Notifications, invoices, and pieces of information must be sent to the following addresses:

a) The seller: General Director, ________________, __________________________

______________________, _____________________________________ , Vietnam

b) Buyer: __________________, _________________________________________ ,

______________________, ______________________________________ , Vietnam

c) In the notifications, including notification of creditor, the parties may specify the address of the sender or other recipients as prescribed by this Clause.

d) Each notification, invoice, and piece of information sent in the aforementioned manners is considered received at the time it is delivered to the recipient’s address or at the time it is rejected by the recipient at the same address.

7. Confidentiality

The buyer agrees to protect the confidentiality of information about the plant in the appendix of this Contract, unless such information has been published previously by the seller or Energy Administration.

Article 11. Commitment to contract execution

Both parties are committed to execute this contract as follows:

1. Each party is legitimately established to do business in Vietnam.

2. This Contract is concluded and executed in accordance with the parties’ licenses for electricity operation issued by competent authorities and relevant regulations of law.

3. The parties do not commit legal or administrative acts that obstruct or affect the other party’s execution of this Contract.

4. The conclusion and execution of this Contract by either party do not violate any terms and conditions of another contract or part of another contract into which that party enters.

This contract is made into 10 copies with the same values; 4 appendices are an integral part of the Contract. Each party keeps 4 copies. The seller has the responsibility to send 01 copy to Energy Administration and 01 copy to Electricity Regulatory Authority.

 

REPRESENTATIVE OF THE SELLER (Position) (Seal and signature) (Full name)

REPRESENTATIVE OF THE Buyer (Position) (Seal and signature) (Full name)

 

APPENDIX A

AGREEMENT ON SYSTEM CONNECTION

(vary according to each project’s specifications, including diagram of connection equipment, characteristics of counting system, voltage, and connection requirements)

 

APPENDIX B

POWER PLANT SPECIFICATIONS

Part A. General specifications

1. Name of power plant: .........................................................................................................

2. Location of power plant: .........................................................................................................

3. Rated output: .....................................................................................................

4. Power sold to the buyer: Minimum ……………….. kW; Maximum ......................................

5. Self-consumed power of the power plant: Minimum ……………….. kW; Maximum ......................................

6. Expected annual generation: ....................................................................... kW

7. Completion date of power plant construction: .........................................................................................................

8. Expected inauguration date: .........................................................................................................

9. Voltage on distribution grid: .................................................................................. V

10. Point of connection to distribution grid: ..................................................................................

11. Location of electricity meter: .............................................................................................

Part B. Operating parameters

1. Type of fuel: ..............................................................................................................

2. Generation technology: .........................................................................................................

3. Designed operating characteristics: .........................................................................................................

4. Fuel consumption per month: ..............................................................................................................

5. Volume of fuel tank: ..............................................................................................................

6. Period of no fuel: ..............................................................................................................

 

APPENDIX C

REQUIREMENTS BEFORE INAUGURATION DATE

(promised inauguration date, agreement on test run, acceptance, and inauguration of the plan, etc.)

 

APPENDIX D

OTHER AGREEMENTS