1. 1 IFRERA first year meeting 20-22 July 2005 Lyon IFRERA Progress meeting and workshops Lyon 20 – 22 July 2005

2. 2 Activity in Vietnam – the task status 1.Technical FS – Krong Pa 2  Under peer review 2.Economic and financial analysis : The motivation of the developer is to sell the power to the utility at a profit  Underway 3.Analysis of regulatory, legal and fiscal framework  Finalisation 4.Local level integration : SIA & EIA, community participation  First drafts for comments 5.Full implementation package : Financial package  To be discussed now

3. 3 IFRERA – Review of regulatory framework in VN Objective : Analyze recent institutional improvements, reforms and incentives which lead to major changes in RE, with special attention to hydropower development in VN The global observation : New ground foundation for RE is laying out, but implementation mechanisms are yet to be defined

4. 4 Review of regulatory framework (1) Restructure in Power industry : Separation of role and responsibilities MoI, EVN, IPP… Not yet a central regulatory New electricity law Extensive RE program in the past. Alternatives means and ways to economically develop further RE Big change from previous policy Great opportunities for small hydro development

5. 5 Review of regulatory framework (2) Not yet clear and detailed regulation framework on financing, PPA, tariff, investment for small investors The review shows the complexity of energy regulation process : Differentiation by type, scale and by investor but the licenses are obligatory

6. 6 Review of regulatory framework (3) The role of market enabler is rather weak in VN, except public funding Poor performance of old projects – no clear resp. Net contrast in newly invested projects – more market oriented, more financial accountability New business model structure for RE services Commune Elect. Groups (63%) Power company (EVN) (19%) Cooperatives (10%) Local companies (5%) JSC (new) and private companies

7. 7 Points to discuss – recommendations? 1.Capacity building and policy Central regulatory body Simplification and facilitate application procedures. Human resource capacity building 2.Economic and financial Tax and duty exemption Reduce transaction costs Create funds (investment and R&D) Clear and fair SPPA 3.Technical Technical specifications for RE Planning process for small scale projects