Vietnam Electricity (EVN), the state-owned power utility and primary offtaker for the country’s renewable energy sector, has proposed applying reduced “transitional tariffs” retroactively to approximately 173 solar and wind power projects with a combined investment estimated at USD 13 billion, reigniting a dispute that has strained investor confidence in Vietnam’s energy market since 2023. A final government decision on the proposal remains pending as of mid-April 2026, with foreign investor groups warning of international arbitration exposure if the retroactive cuts proceed.
Key Facts At A Glance
- EVN’s proposal affects approximately 173 solar and wind projects or subprojects that reached commercial operation date (COD) before or during 2021 without possessing a Construction Completion Acceptance (CCA) certificate at the time of commissioning.
- Combined investment across the affected projects is estimated by the Government Inspectorate at approximately USD 13 billion.
- EVN has proposed reducing payments by up to 43% for electricity generated before projects obtained their CCA approvals, applying a lower “transitional tariff” in place of the originally contracted feed-in tariff rates.
- EVN also plans to recover past payments deemed excess, structured in monthly installments, with legal analysts estimating this could reduce total project lifetime revenues by up to 50% against the original contracted scenario.
- The dispute affects approximately 12 GW of installed renewable capacity.
Named international investors with exposure include Sembcorp Industries Ltd and SP Group of Singapore. - Foreign investor groups including EuroCham and ThaiCham have warned of potential international arbitration, which they say could damage Vietnam’s investment environment.
- A final government determination was still awaited as of April 17, 2026.
Origins Of The Dispute
Vietnam’s feed-in tariff regime, introduced between 2017 and 2021, offered renewable energy developers a 20-year fixed purchase price to accelerate solar and wind capacity buildout. The incentive succeeded in driving rapid expansion: Vietnam became Southeast Asia’s renewable capacity leader during this period, with solar installations reaching approximately 19.4 GW by 2023.
A government review conducted in 2023, led by the Government Inspectorate, found that 173 solar and wind projects had commenced commercial operations without possessing a Construction Completion Acceptance certificate at the time their COD was recognized. Under the FiT framework as originally applied, COD recognition and FiT entitlement did not formally require the CCA to be in hand at the point of commissioning. EVN, however, subsequently argued that the absence of this certificate at COD should disqualify those projects from receiving the full contracted FiT rates during their initial operational phase.
The Ministry of Industry and Trade (MoIT) instructed EVN to review these projects, reassess their FiT eligibility, and recover or adjust tariffs for those deemed non-compliant. EVN moved to withhold payments and, in some cases, demanded refunds of amounts it classified as overpayments since the second quarter of 2025.
EVN’s Transitional Tariff Proposal
In April 2026, EVN’s proposal entered a new phase when the utility formally proposed the application of transitional tariffs to the affected project portfolio. Under the proposal, payments for electricity generated before projects obtained their CCA approvals would be reduced by up to 43% against the original FiT rates. EVN also intends to recover the difference between amounts previously paid and the recalculated lower rates, with repayment structured through monthly installment deductions from future payments.
Legal analysis published by Vietnam Investment Review concluded that EVN’s proposal, if implemented, could strip tariff protection from over 100 projects, reducing their effective electricity purchase price to approximately USD 0.05 per kilowatt-hour against the original contracted rates of USD 0.0935 per kilowatt-hour for the highest-tier solar FiT. Combined with the clawback of past payments, total project lifetime revenues could fall by up to 50% compared with the scenario investors contracted on entry.
EVN’s General Director Nguyen Anh Tuan disclosed at a government meeting on April 15, 2025, that all investors who participated in formal discussions rejected EVN’s proposed solutions at that stage. The dispute has since continued without resolution through to April 2026, with the government’s final determination still outstanding.
Investor Response And Legal Risks
Domestic and foreign developers have filed multiple petitions with the Prime Minister’s office, the National Assembly, the MoIT, and EVN itself, urging the government to preserve FiT entitlements. A coalition of 23 foreign investors, representing 4,182 MW of affected capacity, renewed their request for formal dialogue in late 2025. Investors including Sembcorp Industries Ltd, which acquired 245 MW of Vietnamese renewable assets from Gelex Group in 2024, and SP Group have direct financial exposure to the dispute.
Legal experts and the Vietnam Chamber of Commerce and Industry have consistently argued that the CCA requirement did not form part of the regulatory framework under which these projects were certified for COD and entitled to FiT rates. Retroactive imposition of a new compliance condition, they argue, contravenes Article 152 of Vietnam’s 2015 Law on the Promulgation of Legal Normative Documents and Article 13 of the 2020 Investment Law, both of which restrict retroactive application of new regulatory requirements to existing investments.
Deputy Minister of Industry and Trade Nguyen Hoang Long acknowledged at the April 2025 government meeting that warnings from EuroCham and ThaiCham regarding potential international arbitration risks were substantive, and that unresolved disputes could materially affect Vietnam’s competitiveness in attracting clean energy investment.
Broader Market Implications
The EVN dispute represents one of the most complex regulatory overhang issues in Southeast Asia’s renewable energy sector. Vietnam’s revised National Power Development Plan, known as PDP8 and updated in April 2025, sets ambitious targets of 183,000 to 236,000 MW of total installed capacity by 2030, with solar and wind accounting for 39.5% to 47.2% of that figure. Reaching those targets requires continued private capital inflow.
The unresolved FiT dispute, and the uncertainty created by EVN’s transitional tariff proposal, has created a dual concern: it risks bankruptcies among existing project owners whose debt service structures were underwritten against the original contracted tariffs, and it signals to prospective investors that contractual commitments in Vietnam’s energy sector carry retroactive policy risk.
The introduction of Direct Power Purchase Agreements under Decree 57/2025 has created a new market channel allowing renewable developers to sell electricity directly to large corporate consumers, bypassing EVN. Legal observers note that this structural reform, while positive, does not resolve the financial and contractual obligations associated with the existing 173 disputed projects, whose PPAs with EVN remain the operative payment mechanism.