Thông tư 18/2020/TT-BCT

CIRCULAR

PROJECT DEVELOPMENT AND SAMPLE OF ELECTRICITY SALE CONTRACT APPLICABLE TO SOLAR POWER PROJECTS

Pursuant to Decree No. 98/2017/ND-CP dated August 18, 2017 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister on incentive mechanisms for development of solar power projects in Vietnam;

At request of Director General of Electricity and Renewable Energy Authority,

Ministry of Industry and Trade promulgates Circular on project development and sample of electricity sale contract applicable to solar power projects.

Chapter I

GENERAL PROVISIONS

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This Circular prescribes development of grid-connected solar power projects, rooftop solar power system and sample of electricity sale contract applicable to grid-connected solar power projects and rooftop solar power system in Vietnam.

Article 2. Regulated entities

This Circular applies to organizations and individuals participating in development of solar power in Vietnam and other relevant organizations and individuals.

Article 3. Term interpretation

1. “Wp, KWp, MWp” are units of peak power achieved by solar panels in standard conditions and publicized by manufacturers.

2. “Termed land and water surface use area in grid-connected solar power projects” refers to total area for construction of structures (including power plants and electrical substations, excluding power lines and roads leading to power plants)

Chapter II

SOLAR POWER DEVELOPMENT

Article 4. Development of grid-connected solar power projects

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a) Grid-connected solar power projects decided by competent agencies on investment guidelines prior to November 23, 2019 with commercial operation date (completing initial tests for the entire or part of the structure as per the law; issued with power generation permit by competent agencies; the Seller and Buyer shall conclude electricity meter readings for payment) of the entire or part of the project ranges from July 1 , 2019 to December 31, 2020 inclusively shall be applied with electricity purchase schedule for grid-connected solar power under Annex of Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister approving incentive mechanisms for development of solar power in Vietnam.

b) Grid-connected solar power projects in Ninh Thuan province shall have electricity sale price determined based on chronological order of period in which commercial operation date (completing initial tests for the entire or part of the structure as per the law; issued with power generation permit by competent agencies; the Seller and Buyer shall conclude electricity meter readings for payment) of the entire or part of other projects is acknowledged, to be specific:

Capacity of the entire or part of the project whose commercial operation date precedes January 1, 2021 affiliated to total cumulative capacity not exceeding 2,000 MW shall be applied with electricity sale price specified under Clause 3 Article 5 Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister approving incentive mechanisms for development of solar power in Vietnam;

Capacity of the entire or part of the project not affiliated to total cumulative capacity of 2,000 MW, having investment guidelines decided by competent agencies before November 23, 2019 and commercial operation date ranges from July 1, 2019 to December 31, 2020 inclusively shall be applied with electricity sale price specified under Clause 1 Article 5 Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister approving incentive mechanisms for development of solar power in Vietnam.

2. Fundamental design dossiers of solar power project must comply with applicable regulations and law and following requirements:

a) Local characteristics and potential solar radiation of the projects;

b) Assessment of impact of method of connecting solar power projects on safe and stable operation of electrical grids in the area;

c) Design and connection of SCADA system or regular communication.

3. Termed land and water surface use area of projects shall not exceed 1.2 ha/ 1 MWp.

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1. Electricity sale price

a) In case the Buyer is Vietnam Electricity: Electricity sale price of rooftop solar power systems shall comply with Article 8 of Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister approving incentive mechanisms for development of solar power in Vietnam.

b) In case the Buyer is not Vietnam Electricity: The Buyer and the Seller shall enter into agreement on electricity sale price.

2. Procedures in case of rooftop solar power systems

a) The Seller shall apply to connect with the Seller with information on location of installation, capacity (no more than 1 NW and 1.25 MWp), power lines and estimated points of connection.

b) The Buyer shall provide remarks on ability to connect and transmit rooftop solar power system capacity of the Seller that applies to connect with electrical grids of the Buyer. The Buyer shall reply within 5 working days from the date on which application of the Seller is received.

c) The Seller and the Buyer shall agree to connect rooftop solar power system of the Seller to electrical grids of the Buyer. In case rooftop solar power systems of the Seller connect to electrical grids that are not owned by the Buyer or are owned by electricity providers and retailers, the Buyer and the Seller shall enter into agreement with owners of the electrical grids to connect with the electrical grids. Deadline for signing agreements on connection shall be 5 working days from the date on which the Buyer receives adequate connection documents and agreements of electrical grid owners (if any).

d) The Seller shall install rooftop solar power systems whose scale conforms to Point b and Point c Clause 2 of this Article.

dd) The Seller shall submit offer for selling electricity generated from rooftop solar power systems consisting of written offer, technical documents on solar panels, devices converting direct current to alternating current (power inverters); power lines, transformers (if any); factory release certificates and equipment quality certifications (copies).

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g) Depending on practical conditions and technical requirements of each rooftop solar power system, the Seller and the Buyer shall agreement to implement regulations under Points c, d, dd and e Clause 2 of this Article subsequently or simultaneously.

3. The Seller must guarantee that the inverter is capable of isolating electricity flow into power grids of the Buyer when the grids are neutral to prevent possibility of interference and taking over of operational supervision of external factors and complying with standards, regulations and law on electricity quality.

4. Rooftop solar power system shall be exempted from power operation permit.

Chapter III

SAMPLE OF ELECTRICITY SALE CONTRACT

Article 6. Details of sample of electricity sale contract

1. Details of sample of electricity sale contract applicable to grid-connected solar power projects are specified under Annex 1 attached to this Circular.

2. Details of sample of electricity sale contract applicable to rooftop solar power projects are specified under Annex 2 attached to this Circular.

3. In addition to details required under Clauses 1 and 2 of this Article, the Buyer and Seller may supplement details of sample of electricity sale contract to clarify responsibilities and rights of parties. Supplemented details must be mutually agreed upon and not contradicting details of sample of electricity sale contract attached to this Circular.

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IMPLEMENTATION

Article 7. Responsibilities of regulatory agencies

1. Electricity and Renewable Energy Authority is responsible for:

a) publicizing, guiding and examining implementation of this Circular;

b) consolidating difficulties and feedback and reporting to Minister of Industry and Trade.

2. People’s Committees of provinces are responsible for:

a) monitoring, examining and supervising development of solar power in provinces as per the law.

b) on a yearly basis, before January 15, submitting reports using form under Annex 3 attached to this Circular to Ministry of Industry and Trade on application for registration, implementation of grid-connected solar power projects that arise during reporting period in provinces for monitor and management.

Article 8. Responsibilities of relevant organizations and individuals

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a) Vietnam Electricity shall publicize details of application for connection, experimentation, signing electricity sale contracts and inspection for operation applicable to rooftop solar power system; on a 6-month basis, consolidating and reporting to Ministry of Industry and Trade on development of nationwide rooftop solar power systems.

b) being responsible for examining and monitoring operation of solar power plans (including rooftop and grid-connected solar power) as per the law, in case of external illegal infiltration, illegal contents in power plant supervisory software of the Seller or ceased connection with electrical grids, making records and reporting to Ministry of Industry and Trade.

2. The Seller

a) complying with procedures for operating and regulating electrical systems, and regulations on electricity transmission system and electricity distribution systems promulgated by Ministry of Industry and Trade.

b) examining operation and solar power equipment supervisory software on a regular basis and developing measures for countering external illegal interference and infiltration.

c) not violating regulations and law on information safety.

d) performing environmental protection, fire protection and electrical safety as per the law.

dd) retrieving, dismantling, returning clearance and being responsible for disposing materials, equipment and waste that arise during construction, operation or termination of grid-connected solar power and rooftop solar power projects according to environmental laws.

Article 9. Transition clauses

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2. In case (part or total) of grid-connected solar power projects and rooftop solar power systems that have been entered into electricity sale contract and brought into commercial operation from after June 30, 2019 to before the effective date hereof, the Buyer and the Seller shall re-enter or amend signed contracts according to Article 6 of this Circular.

Article 10. Entry into force

This Circular comes into force from August 31, 2020. Circular No. 16/2017/TT-BCT dated September 12, 2017, Circular No. 05/2019/TT-BCT dated March 11, 2019 of Ministry of Industry and Trade on project development and sample of electricity sale contract applicable to solar power projects shall expire  from the effective date hereof./.

PP. MINISTER
DEPUTY MINISTER




Hoang Quoc Vuong

ANNEX 1

MODEL POWER PURCHASE AGREEMENTS FOR GRID-CONNECTED SOLAR POWER PROJECTS
(Attached to Circular No. 18/2020/TT-BCT dated July 17, 2020 of Minister of Industry and Trade on project development and model power purchase agreements applicable to solar power projects)

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Model of power purchase contract

Annex A: Electrical grid connection agreement

Annex B: Technical specifications of primary structures under project

Annex C: Data measurement and collection system

Annex D: Requirements prior to commercial operation date

Annex E: Electricity bill

Annex G: Other agreements (if any)

MODEL POWER PURCHASE AGREEMENT FOR …………………… (name) SOLAR POWER PROJECT

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 [SELLER]
acts as “the Seller” and

[BUYER]
acts as “the Buyer”

Agreement No. …………………

[Location and date of signing]

TABLE OF CONTENTS

Article 1. Definitions

Article 2. Delivery, electricity sale and operation

Article 3. Connection and measurement

Article 4. Invoicing and payment

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Article 6. Contract term

Article 7. Infringement, compensation and termination of contract

Article 8. Settlement of disputes

Article 9. Entrust, transfer and restructuring

Article 10. Other agreements

Article 11. Commitments

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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POWER PURCHASE AGREEMENT

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Pursuant to:

- The Civil Code in 2015;

- Law on Commerce in 2005;

- Law on Electricity dated 2004; Law on amendment to Law on Electricity dated November 20, 2012;

- Decree No. 137/2013/ND-CP dated October 21, 2013 of the Government on elaborating to Law on Electricity and Law of amendment to Law on Electricity;

- Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister issuing Decision on incentive mechanisms for development of solar power projects in Vietnam (Decision No. 13);

- Circular No. .../2020/TT-BCT dated ……………, 2020 of Ministry of Industry and Trade promulgates Circular on project development and model of electricity sale contract applicable to solar power projects (Circular No. …………);

- Decision No. ………dated ……………, 20… of [project developer] approving investment project for construction of [project name];

- Demands for electricity sale and purchase of both parties,

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The parties include:

The Seller:

Address: _______________________________________________________________

Telephone: ______________________________Fax:____________________________

TIN:___________________________________________________________________

Account: __________________________Bank:_________________________________

Represented by: _________________________________________________________

Title: ___________________________ (Under authorization of: ___________________ under written authorization No. ______________________, dated _________________________)

(hereinafter referred to as “The Seller”); and

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Address: _______________________________________________________________

Telephone: ______________________________Fax:____________________________

TIN:____________________________________________________________________

Account: __________________________Bank:_________________________________

Represented by: _________________________________________________________

Title: ___________________________ (Under authorization of: ___________________ under written authorization No. ______________________, dated _________________________)

(hereinafter referred to as “The Buyer”); and

Hereby enter into Power purchase agreement to sell, purchase electricity generated from [project name] Solar Power Plant, with total installation capacity of [project capacity in MW] invested for construction by the Seller and operating in [project location] under following terms and conditions:

Article 1. Definitions

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1. “party” or “parties” refer to the Seller, the Buyer or both parties or entities receiving rights and obligations of a party or parties under this Agreement.

2. “point of connection” refers to a location where transmission line of the Seller is connected to electrical grid of the Buyer agreed upon under Annex A hereof.

3. “point of delivery” refers to a location where electrical production measuring instrument is installed.

4. “electricity for sale” refers to electricity in kWh generated by power plant minus electricity necessary for self-use and losses in electrical structures of the Seller, agreed and sold to the Buyer by the Seller on an annual basis, conforms to Annex hereof.

5. “contract” refers to this Agreement and Annexes thereof.

6. “average inter-bank interest rate” refers to average inter-bank interest rate for 1 month publicized by the State Bank of Vietnam at the time of making payment or the latest average inter-bank interest rate from the date of making payment if the State Bank of Vietnam does not publicize average inter-bank interest rate at the time of making payment. 

7. “contract year” refers to a period starting from the first day of January to the last day of December of a year, or from the commercial operation date to the last day of December of the first contract year. The last contract year ends on the final day of contract term.

8. “payment due date” refers to date specified under Article 4 hereof.

9. “commercial operation date” of a grid-connected solar power project or part of a grid-connected solar power project refers to a day where all or part of the solar power structure is ready to sell electricity to the Buyer and satisfies all following requirements: (i) Inspection for acceptance and initial testing for all or part of the structure have been completed as per the law; (ii) Receive license for operation in electricity sector issued by competent agency; and (iii) Both parties have agreed upon electricity meter reading to start payment.  Initial experiments include: (x) Test reactive power generation/receipt capacity; (xx) AGC connection test; (xxx) Credibility test.

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11. “technical standards and regulations in power sector” refer to regulations and standards applied in power sector and issued by competent organizations of Vietnam or regulations and standards of international organizations and countries in the region satisfactory to regulations and law and recommendations of equipment manufacturers, taking into account material, resources, fuel and technique conditions acceptable by Vietnamese power sector at any given time. 

12. “measurement system” refers to a system of measurement equipment (meters, current transformers, voltage transformers, auxiliary equipment and secondary circuits linking these equipment into a system) to determine amount of electricity passing through points of measurement.

13. “point of measurement” refers to a physical point on primary circuit where electricity is measured and determined.

14. “regulations on operation of national electrical grid” refer to legislative documents, procedures for electrical grid operational standards, conditions and procedures for connecting to electrical grid, electrical grid operational regulation, electricity measurement in transmission and distribution.

15. “emergency” refers to a situation that can cause interruption in provision of electricity to customers of the Buyer, including cases where potential major defects in national electrical grid can occur, threaten lives, assets or impact technical capacity of the power plant.

16. “force majeure” refers to an event that takes place objectively, unexpectedly and irreversibly despite the fact that all necessary and possible measures and efforts have been taken.

Article 2. Delivery, electricity sale and operation

1. Electricity delivery

a) Starting from commercial operation date, the Seller shall agree and sell electricity to the Buyer and the Buyer shall agree to purchase electricity of the Seller according to this contract.

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2. Electricity price

a) Electricity price at points of delivery shall conform to Article 5 of Decision No. 13.

b) The electricity price specified under Point a Clause 2 of this Article only applies to sections of grid-connected solar power plants with commercial operation date satisfactory to Article 5 of Decision No. 13.

c) Payable electricity price: Methods of determining monthly payable electricity price for power plants shall conform to Annex E hereto.

d) Exchange rate applicable at the time of payment shall be central rate of VND and USD publicized by the State Bank of Vietnam on the date in which the Seller produces invoices or the date closest to the date in which the Seller produces invoices if the State Bank of Vietnam does not publicize exchange rate on the date in which the Seller produces invoices. 

3. Sale of electricity

The Seller hereby agrees to operate power plants with the maximum capacity of [plant capacity in MW] and equipment, design satisfactory to technical regulations and standards of electricity sector. The Seller is not legally responsible for damage caused to the Buyer as a result of failure to provide adequate electricity if the Seller is not at fault. Unless otherwise permitted by the Buyer in writing, the Seller must not sell electricity to a third party or use for purposes other than producing electricity and selling to the Buyer.

The Seller is prohibited from connecting other electricity generation systems that are not under the Project agreed under this contract to current measuring system of the Project.

4. Operation plan

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5. Electricity outage

The Seller shall inform the Buyer about expected electricity outage schedule and duration of regular electricity outage for maintenance and irregular electricity outage according to regulations and law on operating national electrical grid.

6. Electrical grid operation

a) The Seller is responsible for managing, operating and maintaining electrical equipment, electrical grid within asset management scope determined under agreement on connection signed with entities managing electrical grid and ensuring conformance with regulations and law on operating national electrical grid, technical standards and regulations of electricity sector and sale of electricity according to power purchase agreement.

b) The Seller must exchange and agree with entities managing and operating national electrical grid on plans for mobilizing electricity sources and solutions for reducing impact of liabilities relating to base load and electrical grid of the areas on electrical grid transmission of the areas.

7. Interruption in electricity receipt and purchase

The Buyer is not required to fulfill obligations to purchase or receive electricity when:

a) Power plant of the Seller does not operate according to regulations and law on operating national electrical grids and technical standards, regulations of electricity sector; or

b) The Buyer installs equipment, repairs, replaces, inspects or examines electrical grid in a manner that directly involves connection of power plant of the Seller; or

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d) Electrical grid of the Buyer requires assistance in recovering post-incidents according to regulations and law on operating national electrical grid and technical standards, regulations of electricity sector.

8. Interruption in electricity delivery and sale

The Seller may interrupt or reduce amount of electricity sold and delivered to the Buyer in case of installing, repairing, replacing, inspecting, examining or maintaining power plant in a manner that directly impacts delivery of electricity to the Buyer.

Prior to interrupting or reducing electricity delivered to the Buyer, the Seller must inform the Buyer at least 10 days in advance and include reasons, expected starting time and duration of interruption.

9. Cooperation

The Buyer is responsible for reducing electricity receipt interruption duration for cases under Clause 7 of this Article. Except for emergency, when reducing or interrupting electricity receipt, the Buyer must inform the Seller at least 10 days in advance and include reasons, expected starting time and duration.  If necessary, the Buyer must send operational dispatch orders transferred from electrical grid dispatchers relating to power plant operation to the Seller and the Seller must comply with said orders, except for cases where the orders alter characteristics of the power plant.

10. Capacity

The Seller agrees to operate power plant consistently with electrical grid of the Buyer with capacity defined according to applicable regulations and law on distribution and transmission electrical grid.

11. Commercial operation date and consistent operation

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The Seller is responsible for informing the Buyer in writing at least 30 days before synchronizing with electrical grid of the Buyer for the first time. The Seller must cooperate with the Buyer for the first synchronization and subsequent synchronization.

12. Standards

The Seller and the Buyer must comply with regulations and law relating to electricity delivery and receipt, regulations and law on distribution electrical grids, regulations and law on electricity and other legislative documents relating to electricity sector.

13. Change to commercial operation date

From 1 month to 3 months prior to commercial operation date specified under Annex B, the Seller must officially verify any change to the commercial operation date. Parties must cooperate in changing commercial operation date and the Buyer cannot reject request for changing commercial operation date without appropriate reasons.

Article 3. Connection and measurement

1. Responsibilities at point of delivery

The Seller is responsible for investing and installing equipment for transmitting and delivering electricity to the Buyer at point of delivery. The Buyer is responsible for cooperating with the Seller in installation affairs mentioned above.

2. Connection

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b) The Buyer has the right to review design and inspect adequacy of protective equipment. The Buyer must inform the Seller about appraisal results in writing within 30 days from the date on which design-related technical dossiers.  The Buyer must inform all found design errors in writing. The Seller must implement all revisions proposed by the Buyer satisfactory to regulations and law on operating national electrical grid and technical standards, regulations of electrical sector.

3. Connection standards

Equipment of the Seller and the Buyer must be installed, operated and connected according to regulations and law on operating national electrical grid and technical standards, regulations of electrical grid.

4. Inspection of compliance with connection standards

In case advance notice is provided, each party has the right to inspect connecting equipment of the other party to guarantee compliance with regulations and law on operating national electrical grid. This inspection must not affect operations of inspected party. In case equipment of inspected party fails to satisfy operation and maintenance conditions, inspecting party must inform inspected party about revision to be taken.  The inspected party is responsible for adopting necessary remedial measures upon receiving revision request from the inspecting party.

5. Measurement

a) Measurement positions and technical requirements of measuring system are specified under Annex C.

b) The Seller is responsible for investing, installing, managing, operating, maintaining and inspecting the equipment of the primary and backup measurement systems on a periodic basis according to regulations and law on electricity measurement.

c) All electricity measuring instrument of the power plant must be inspected on a regular basis.  Procedures for periodic inspection of measuring instrument shall conform to applicable regulations and law on measurement.  Inspection of measuring instrument or verification of measuring instrument accuracy must be implemented by accredited organizations, agreed upon by both parties, and must conform to procedures for inspecting measuring instrument of the government.  The measuring instrument must be secured with lead seal after the inspection; Inspection costs shall be incurred by the Seller.

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dd) The Seller is obliged to inform the Buyer of the inspection results of measuring instrument. The Seller is obliged to inform Buyer in advance of the inspection of measuring instrument. The Buyer is responsible for assigning its witness of the process of seal removal, inspection and lead sealing of the meters. If measuring instrument’s deviations exceed the permissible limit, the Seller is liable for calibrating or replacing such instrument. If a party assumes a measuring instrument is damaged or not functional, it must promptly inform the other party. The Seller bears the duty of inspection, repair and replacement. Inspection, repair and replacement must be implemented in the shortest amount of time possible.

e) Amount of electricity for sale between the Buyer and the Seller is determined according to methods of delivering electricity and official measuring system under Annex C hereof.

g) If the primary measuring system does not function properly or its deviations, as found by an inspection, exceed the regulated precision level, the electricity production for sale between parties during such events is defined as follows:

(i) Employ measurement reading of backup measuring system to determine electricity production for payment.

(ii) If the backup measuring system fails or generates deviations, during an inspection, higher than the permissible limit, electricity production is calculated as follows:

- If the primary measurement system functions but generates deviations higher than the regulated precision level, electricity production is determined by the readings of the primary measuring system and interpreted to an equivalent value of electricity at the deviation rate of 0%;

- If the primary measuring system is not functional while backup measuring system functions but generates deviations higher than the regulated precision level, electricity production is determined by the readings of the backup measuring system and interpreted to an equivalent value of electricity at the deviation rate of 0%;

- If both primary and backup measuring systems are not functional, both parties shall estimate electricity production for delivery based on average monthly figures (if any) of the power plant in the same payment period of the year preceding the contract year and reasonably adjusted according to invoice period based on available figures that affect electricity generation of the power plant such as ambient temperature, radiant intensity, capacity, operating hours, operating period of the power plant and self-sufficient electricity (hereinafter collectively referred to as “operational figures”) during the period in which the measuring instrument is not functional unless otherwise agreed upon by both parties in writing;

- If reliable figures are not available, estimate electricity production based on average monthly electricity production of the power plant over 6 payment periods before the measuring instrument becomes non-functional (or less if the power plant has been operating for less than 6 months) and adjust according to suspension periods or operational figures, unless otherwise agreed upon by both parties in writing.

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(iv) If measuring instrument burns or breaks down, the Seller is responsible for having it replaced or repaired in the shortest time to ensure compliance with technical requirements and normal operations of the measuring instrument. Repaired or replaced instrument must satisfy legitimacy and technical requirements as per the law before being brought into use.

6. Recording of meter reading

On a monthly basis, legal representatives of both parties shall collect, examine and verify meter reading records at 12 a.m. of the last day of the previous month.

The Buyer may enter the power plant or measuring instrument location to record reading, examine meters and conduct other affairs relating to execution of obligations of this contract after informing the Seller. The fact that the Buyer enters the power plant must not affect regular operations of the Seller. Personnel assigned by the Buyer must comply with regulations on safety and regulations of the power plant upon entering the power plant.

7. Transfer of electricity ownership

At point of electricity delivery, electricity ownership shall be transferred from the Seller to the Buyer. At this point, the Buyer holds the right to own, control and assume responsibility for the electricity that they have received.

Article 4. Invoicing and payment

1. Invoicing

On a monthly basis (or frequency agreed upon by both parties), both parties shall acknowledge meter reading on the date that both parties have agreed upon to determine electricity production for delivery in the month.  The Seller shall record meter reading in defined form bearing confirmation of the Buyer and send meter reading record and invoice in physical form (or via fax or via email in form of copies and subsequent official dispatches) to the Buyer within 10 working days after acknowledging meter reading. 

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a) Payment documents: Before the 5^th of each month, the Seller shall send notice on payment for electricity in writing to the Buyer with payment documents of the previous month.

b) Within 5 working days from the date on which payment documents of the Seller are received, the Buyer must inspect the documents and inform the Seller about any error. If the Buyer fails to provide feedback within the aforementioned period, the payment documents are considered to have been accepted.

c) Within 3 working days from the date on which payment documents are accepted, the Seller shall publish and send payment invoices to the Buyer. Such payment invoices are made in conformity to the regulations by Ministry of Finance.

d) Within 25 working days from the date on which adequate payment invoices are received from the Seller, the Buyer is obliged to incur all payables specified in the invoices to the Seller in form of wire transfer.

dd) In case the Buyer fails to incur all payables within the aforementioned deadline, the Buyer shall incur late payment penalties for all late payables. Late payment penalties shall be calculated by multiplying (x) the late payment with average inter-bank interest rate at the date on which payment invoices are produced or previous days (if any), dividing (:) 365 days and multiplying (x) with number of days past the deadline that the payables have not been settled.

e) In case the Buyer does not acknowledge meter reading according to Clause 1 of this Article, based on payment documents satisfactory to applicable regulations and law provided by the Seller, the Buyer must fulfill obligations to pay the Seller for the electricity as per the law.

3. Estimation of electricity production for sale

In case of insufficient data to determine electricity production or payables incurred by the Buyer to the Seller, except for cases under Clause 4 of this Article, the Seller must estimate the data and adjust the payables accordingly for subsequent payments.

4. Order of application and replacement of meter reading

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a) Reading of primary meter at point of delivery in the payment period with accuracy satisfactory to Clause 5 Article 3 hereof;

b) Reading of backup meter at point of delivery with accuracy satisfactory to Clause 5 Article 3 hereof in case backup meter is employed;

c) If all meters fail to accurately record electricity for delivery, estimate electricity for delivery based on average monthly figures (if any) of the power plant in the same payment period of the year preceding the contract year and adjust accordingly for the invoice period based on available figures that affect electricity generation of power plants such as radiant intensity, generator capacity, operating hours, operating period of generators and self-sufficient electricity (collectively referred to as “operational figures”) during the period in which the meters are non-functional.

If reliable figures are not available, estimate electricity production based on average monthly electricity production of the power plant over 6 payment periods before the meters become non-functional (or less if the power plant has been operating for less than 6 months) and adjust according to suspension periods or operational figures.

5. Invoice disputes

a) In case a party disagrees with invoices regarding electricity production or payables in part or in whole, that party has the right to inform the other party in writing before the payment deadline. If both parties fail to agree upon on the issue, either party or both parties may enter a dispute within 1 year from the date on which the Buyer receives legitimate invoice.

b) In case of settling disputes according to Article 8 hereof where the Seller is found correct, the Buyer must pay the Seller the amount under dispute and interest of the amount that has not been paid which is calculated according to average inter-bank interest rate and determined by adding monthly interest from payment due date to the date on which payment is made.  If the Buyer is found correct, the Seller must return the amount under dispute that they have previously received and interest thereof which is calculated according to average inter-bank interest rate and determined by adding monthly interest from payment due date to the date on which payment is made. All payments under this section must be made within 15 days from the date on which final decision on settling disputes is issued according to Article 8 hereof.

Article 5. Force majeure

1. Force majeure event

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a) Natural disasters, fire, flood, tsunami, epidemic or earthquake;

b) Riot, unrest, combat, conflict, coup, transport embargo, blockade, quarantine, any act of war or any act of aggression against the community.

2. Solutions in case of force majeure events

In case of a force majeure event, the party that refers to the force majeure event must:

a) immediately inform the other party about the force majeure event, provide reasons and adequate evidence for the force majeure event, and estimate impact and duration thereof of the force majeure event on their ability to fulfill obligations;

b) attempt to fulfill their obligations under the contract;

c) immediately take necessary actions to rectify the force majeure event and provide evidence to prove cooperation in rectifying the force majeure event.

d) adopt necessary measures to alleviate impact of the parties in the contract;

dd) immediately inform parties about termination of the force majeure event.

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Once measures under Clause 2 of this Article, the violating party shall be exempted from liabilities related to failure to fulfill obligations of the contract due to the force majeure event except for liabilities related to settling due payables according to this contract prior to the force majeure event.

4. Duration of force majeure event

In case a party fails to fulfill obligations according to this contract as a result of force majeure event for a year, the other party holds the right to terminate the contract after 60 days from the date on which they inform the original party in writing unless the obligations are fulfilled within these 60 days. Parties shall discuss to find reasonable, appropriate and consistent measures on the basis of friendly negotiation.

Article 6. Contract term

Unless otherwise extended or prematurely terminated under terms of the contract, this contract enters into effect from the date on which legal representatives of parties officially sign and terminates after 20 years from the commercial operation date. Once the contract is terminated, contents of this contract continue to take effect for a necessary period of time to enable parties to produce invoices for the final time, adjust invoices, and settle payment, rights and obligations under this contract.

Parties may extend the term of this contract or enter new contract as per the law when this contract expires.

Article 7. Infringement, compensation and termination of contract

1. Contract infringement of the Seller

a) The Seller fails to conform to commercial operation date according to Annex B within 3 months, except for force majeure event;

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In case the Seller tries but fails to rectify the infringement within 60 days, the Seller may extend deadline for rectification by up to 1 year from the date on which written notice on infringement of the Seller is produced except for cases where competent authorities permit extension of investment progress as per applicable laws. The Seller must rectify the infringement in the shortest time possible except for cases under Article 5 hereof;

c) The Seller voids the contract in part or in whole;

d) Commitments of the Seller under Article 11 hereof are infringed.

2. Contract infringement of the Buyer

a) The Buyer fails to comply with the contract for 60 days from the date on which the Seller informs in writing;

In case the Buyer tries but fails to rectify the infringement within 60 days, the Buyer may extend deadline for rectification by up to 1 year from the date on which written notice on infringement of the Buyer is produced. The Buyer must rectify the infringement in the shortest time possible except for cases under Article 5 hereof;

b) The Buyer fails to settle the due payment not under dispute according to this contract for more than 90 days without justifiable reasons;

c) The Buyer voids the contract in part or in whole;

d) Commitments of the Buyer under Article 11 hereof are seriously infringed.

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In case of contract infringement, the infringed party must inform the infringing party. The infringing party must cooperate in resolving the contract infringement.

4. Damages

a) Infringing party is obliged to pay damages to the infringed party. Damages include actual damage that the infringed party suffers and is caused by the infringing party and direct revenues that the infringed party would benefit from if the infringement did not transpire;

b) The infringed party must prove damage and level thereof that they suffer as a result of the infringement and revenues that they would benefit if the infringement did not transpire.

5. Contract termination

In case contract infringement is not resolved according to Clause 4 of this Article, the infringed party may request the infringing party to continue to rectify or terminate the contract by sending notice to the infringing party. Once infringed party opts to terminate contract under the conditions hereof, parties are not required to fulfill contract obligations except for cases under Article 5 and cases where infringed parties have the right to request damages incurred by the infringing party.

In case the Seller is the infringed party and opts to terminate the contract, damages specified under Article 4 of this Article shall be determined up the point where contract is terminated.

Article 8. Settlement of disputes

1. Dispute settlement in form of negotiation

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This method does not apply to disputes that do not derive directly from this contract between any contract party to a third party.

2. Dispute settlement as per the law

In case a dispute cannot be settled using negotiation under Clause 1 of this Article or either party refuses to comply with negotiation results, a party or parties may request settlement of disputes according to Circular No. 40/2010/TT-BCT dated December 13, 2010 of Ministry of Industry and Trade on procedures for settling disputes in electricity request other dispute settlement bodies agreed upon by both parties to settle the dispute as per applicable laws.

Article 9. Entrust, transfer and restructuring

1. Entrust and transfer

Entrusting party or transferring party must conform to applicable regulations and law when entrusting or transferring and informing other party to the power purchase agreement about entrust or transfer. 

2. Restructuring

In case restructuring of electricity sector affects rights or obligations of the Seller or the Buyer under this contract, contract execution shall be transferred to recipients. The Buyer is responsible for verifying and guaranteeing the fact that recipients fulfill obligations to purchase electricity or distribute electricity and other rights, obligations under this contract in writing.

Article 10. Other agreements

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Parties must not revise terms and clauses of this contract on their own volition except for cases under Clause 3 Article 6 hereof.

2. Responsibilities for cooperation

The Seller holds obligations to adopt legal procedures relating to power plants. The Buyer is responsible for cooperating with the Seller in obtaining license, approval, permission and approval of relevant regulatory authorities relating to power plant location, controlling resources, investing, transmitting, selling electricity, owning, operating power plants, providing additional documents or stored documents and conducting other necessary activities to implement agreements of parties.

3. Applicable law

The contract is interpreted and executed as per Vietnamese laws.

4. Refraining from implementing rights

Refraining from implementing their rights under this contract at any point in time will not affect implementation of rights in subsequent contracts. Parties hereby agree that declaration of any party regarding not implementing rights for any commitment or condition under the contract, or any contract infringement shall not mean that the party waives equivalent right in the future.

5. Separability of contents

If a part of the contract does not correspond with the laws or becomes void as per court’s decision, other parts of the contract sustain effect on the condition that remaining parts constitute sufficient contents without the ineffectual part.

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Notices, invoices or essential information exchange during the enforcement of this contract must include issue dates and relation to the contract. Notices, invoices or information exchange must be recorded in writing and transferred using post service or fax. The original of a fax must be sent by pre-paid post. Notices, invoices or information must be delivered to the following addresses:

a) The Seller: General Director, _________________, _______________________,

_______________________________, Vietnam

b) The Buyer: _____________________________, _________________________

_______________________________, Vietnam

c) In the notices, parties may specify address of other senders or recipients using methods under this Clause.

d) Each notice, invoice or information exchanged sent via mail, delivered and transmitted using methods above shall be considered delivered and received at the time the notice, invoice or information reaches recipient’s address or is rejected by the recipient at aforementioned address.

7. Security

The Buyer agrees to secure information of the power plant under contract annexes, except for cases where such information has been previously publicized by the Seller or competent authorities.

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This contract is the final complete agreement between the parties and replaces all previous discussions, information and correspondences arising prior to the signing of this contract.

9. Closure and clearance return

Retrieving, dismantling, returning clearance and being responsible for disposing materials, equipment and waste that arise during construction, operation or termination of grid-connected solar power project according to environmental laws.

Article 11. Commitments

Parties hereby commit to execute the contract as follows:

1. Each party is legally established for operating in Vietnam.

2. The parties’ signing and execution of the contract abide by their electrical operating licenses as issued by competent authorities and relevant laws.

3. A party shall not conduct legal or administrative intervention against other party’s execution of the contract.

4. A party’s signing and execution of the contract shall not violate any term of other contracts or documents of other contracts to which that party is a signatory.

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BUYER’S REPRESENTATIVE
(Position)
(Seal and signature)
(Full name)

SELLER’S REPRESENTATIVE
(Position)
(Seal and signature)
(Full name)

ANNEX A

ELECTRICAL GRID CONNECTION AGREEMENT

(attached to Contract No. ……………… signed on ……………, 2020)

- Connection:

- Connection with SCADA system:

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[applicable independently to each project based on technical characteristics including single-line diagrams of connecting equipment which list characteristics of measuring equipment, voltage and connection requirements]

ANNEX B

TECHNICAL SPECIFICATIONS OF POWER PLANT

(attached to Contract No. ……………… signed on ……………, 2020)

Part A. General specifications

1. Name of Power plant: …………………………………………………………………………..

2. Location of Power plant: ……………………………………………………………………….

3. Norm capacity: ………………………………………………………………………

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5. Self-sufficient capacity of the Power plant: minimum of ………… kW; maximum of ……………. kW

6. Estimate electrical production during the first operating year: [specify according to appraisal results of construction design] kWh.

7. Estimate completion date of Power plant's construction: ……………………………………

8. Estimated commercial operation date of the Power plant: ………………………………….

9. Voltage generated to the grid: …………………………………………………V

10. Point of connecting to the grid: ……………………………………………………….

11. Location of measuring instrument: ……………………………………………………..

Part B. Specifications of technology design

1. Electricity generation technology: ……………………………………………………………

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3. Inverter: ……………………………………………………………….

4. Medium voltage transformer: ………………………………………………………………

5. Operational and design characteristics: ……………………………………………………….

ANNEX C

MEASUREMENT AND DATA COLLECTION SYSTEM

(attached to Contract No. ……………… signed on ……………, 2020)

I. Location and features of the measurement system

Primary and backup measurement systems are installed according to agreement on technical design of electricity measurement system and data collection system agreed upon under [name and number of agreement between entities].

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II. Technical requirements for the measurement system

Technical requirements of measurement system, technical requirements of measurement circuit, lead sealing method and requirements of measurement reading collection, processing and storage systems must comply with agreement on technical design of measurement system under [name and number of agreement between entities].

III. Location for measurement

Parties shall agree on location for measurement of measurement systems as follows:

- Location for primary measurement:

- Location for backup measurement 1: .

- Location for backup measurement 2:

- Measurement location for electricity production unbundling (if any):

IV. Method of determining production of electricity delivered

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The electricity paid for by the Buyer to the Seller in month of payment [established and agreed upon by the parties for specific projects in specific administrative divisions].

ANNEX D

REQUIREMENTS PRIOR TO COMMERCIAL OPERATION DATE

(attached to Contract No. ……………… signed on ……………, 2020)

Within 60 days prior to commercial operation date according to Annex B hereof, the Seller is responsible for sending Draft test operation and inspection procedures of the power plant satisfactory to applicable regulations and law, technical standards and technology to the Buyer to enable both parties to agree on commercial operation date and calculate test electricity production of the power plant.

ANNEX E

ELECTRICTY PRICE

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1. Electricity price under power purchase agreement does not include VAT from the commercial operation date according to Clause 2 Article 2 hereof.

2. Calculation of electricity price

On a monthly basis, the Buyer shall pay the Seller for all electricity purchased according to electricity price under Clause 2 Article 2 hereof using the formula (established and agreed upon by the parties for specific projects sand specific administrative divisions].

ANNEX G

OTHER AGREEMENTS (if any)

(attached to Contract No. ……………… signed on ……………, 2020)

ANNEX 2

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

POWER PURCHASE AGREEMENT FOR ROOFTOP SOLAR POWER SYSTEM

No.

Pursuant to:

- The Civil Code in 2015;

- Law on Commerce in 2005;

- Law on Electricity dated 2004; Law on amendment to Law on Electricity dated November 20, 2012;

- Decree No. 137/2013/ND-CP dated October 21, 2013 of the Government on elaborating to Law on Electricity and Law of amendment to Law on Electricity;

- Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister on incentive mechanisms for development of solar power projects in Vietnam;

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- Demands for electricity sale and purchase of both parties,

As of …………………………………………………………… (location and date)

The parties include:

The Seller (Party A): ………………

Address:

Telephone: ______________________________Fax:____________________________

TIN: __________________________ Enterprise/Business registration No.

Account: __________________________Bank:_________________________________

Representative:

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Title: ___________________________ (Under authorization of: ___________________ under written authorization No. ______________________, dated _________________________)

The Buyer (Party B): …………….

Address:

Telephone: _______________________ Email: _____________________Fax:_________________________________

TIN: __________________________ Enterprise/Business registration No.

Account: __________________________Bank:_________________________________

Representative:

Title: ___________________________ (Under authorization of: ___________________ under written authorization No. ______________________, dated _________________________)

Hereby sign Power purchase agreement (hereinafter referred to as “Agreement”) to purchase and sell electricity produced from rooftop solar power system (hereinafter referred to as “system”), with installation capacity of ………… kWp with specifications under Annexes (model Annexes issued by Party B) invested for construction and operated by Party A in [system location] under following terms:

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1. Party A agrees to sell to Party B and party B agrees to purchase from Party A electricity generated from system and transmitted to grid of Party B via measuring meter installed at points of delivery.

2. Party B is responsible for paying for the electricity transmitted to Party B’s grid by the system of Party A according to electricity price under Article 2 hereof.

3. Electricity that Party A receives from grid of Party B shall be under separate power purchase agreements.

Article 2. Electricity price

1. Electricity price of rooftop solar power system shall conform to Clause 2 Article 8 of Decision No. 13/2020/QD-TTg dated April 6, 2020 of Prime Minister on solar power development incentives in Vietnam.

2. Electricity price under Clause 1 of this Article applies for 20 years from ……………. (date) to ……………… (date).

Article 3. Verification of meter reading, electricity generated onto the grid and invoicing

1. Verification of meter reading and electricity generated onto the grid

- Party B shall record meter reading on the … (date) each month.

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Email [Recipient’s email address] SMS/Zalo/Viber [Recipient’s phone number]

- In case Party A does not agree with the meter reading and electricity generated onto the grid provided by Party B, Party A must respond within 1 working day from the date on which they receive information of Party B via:

Web: _______________________________________ Email [Recipient’s email address]

- If Party A fails to respond within the period mentioned above, Party A is considered agreeing with the meter reading and electricity generated onto the grid informed by Party B.

2. Electricity price:

a) Electricity price: Based on electricity production agreed upon by both parties under Clause 1 of this Article and electricity price under Article 2 hereof, on a monthly basis, Party B shall pay Party A electricity (VAT not included) as follows:

T(n)= Ag (n) x G (n)

In which:

T(n): Electricity price in month n (VND).

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- For meter 1, Ag(n) refers to electricity production generated upon Party B’s grid by Party A at point of delivery and recorded via meter.

- For meter 3, Ag(n) refers to total electricity production generated upon Party B’s grid by Party A at point of delivery and recorded via meter (in regular hours, peak hours, and off-peak hours).

G(n): Electricity price for month n under Article 2 (VND/kWh) hereof.

b) VAT:

- In case Part A incurs VAT, in addition to electricity payment under Point a Clause 2 of this Article, Party B must pay Party A the VAT as per applicable laws.

- In case Party A is an individual or household executing rooftop solar power projects and receives electricity from the national electrical grid, once the final meter reading recording period of a year concludes, Party B is responsible for declaring price for electricity purchased from solar power system in the year and declaring VAT for Party A depending on revenues generated by the solar power system.  Party A is responsible for cooperating with Party B in declaring VAT as per applicable laws.

c) Payment in case of error to measurement system

In case electricity production measuring system is defective (due to fire, damage, loss or inaccurate operation), the Seller must immediately inform the Buyer about the system’s error parties shall produce records on the error and execute agreement on electricity generated on Party B’s grid by Party A on the basis of electricity production of the payment period of the previous year, month, or week.

Article 4. Payment

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a) Party A must be an organization that issues monthly invoices:

Monthly schedule on meter reading and electricity generated onto Party B’s grid by Party A provided by Party B;

Sale invoices as per the law provided by Party A with electricity price determined under Clause 2 Article 3 hereof.

In case Party A produces VAT deduction invoices (invoices do not include tax rate and VAT), Party A shall transfer to Party B the schedule and notice on submission of VAT of the electricity payment for the electricity involved in the sale to enable Party B to pay VAT to Party A.

b) Party A is an organization or individual that does not produce monthly invoice:

On a monthly basis:

Party B shall rely on schedule on meter reading and electricity generated onto Party B’s grid by Party A to settle electricity payment for Party A with electricity payment determined under Point a Clause 2 Article 3 hereof.

On a yearly basis:

Within 15 days from the date on which a year concludes or a contract concludes, whichever comes first, Party B shall produce and send “Record of electricity for delivery and electricity payment” of the year to Party A using form issued by Party B.

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2. Payment method:

Wire transfer (Party A shall incur transfer fee).

Wire transfer information:……………………………………………………………………..

3. Payment deadline:

a) Within 7 working days from the date on which Party A agrees on meter reading and electricity generated onto the grid (informed by Party B) and submits adequate payment documents specified under Clause 1 of this Article.

b) If Party B fails to pay Party A within the deadline above, Party B is responsible for paying for late payment interest for all payment that they fail to pay in a timely manner which is calculated from the date that immediately follows the payment deadline to the date on which Party B makes the payment. Both parties shall agree on late payment interest on the basis of conformance with Law on Commerce in 2005 and preservation of legal rights and interests of the Seller.

Article 5. Rights and obligations of parties

1. Rights and obligations of Party A:

a) ensuring design, installation, construction and operation according to technical regulations, applicable regulations and law on electricity quality, electricity safety, construction, environment and fire prevention.

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c) refraining from connecting other electrical sources, other than those agreed upon under this agreement, via measuring meter without Party B’s consent.

d) fulfilling tax obligations as per Government’s regulations.

2. Rights and obligations of Party B

a) investing, installing meter and measurement system at points of delivery for Party A if Party A satisfies connection standards under Point a Clause 1 of this Article.

b) cooperating with Party A in recording, informing, unifying and monitoring electricity production generated onto Party B’s grid.

c) inspecting, monitoring operation and dealing with issues as per applicable laws.

d) rejecting payment should Party A fails to comply with terms under Points a, c, and d Clause 1 of this Article.

Article 6. Dispute resolution

1. Dispute resolution in form of negotiation

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In case both parties fail to settle the disputes, party holding rights shall request competent authorities in writing to assist both parties in resolving the disputes.

This method does not apply to disputes that do not directly derive from this agreement between any party to the agreement and a third party.

2. Dispute resolution as per the law

In case disputes that cannot be resolved using negotiation as specified under Clause 1 of this Article or a party fails to comply with negotiation results, a party or parties may request superior electricity authority of the Buyer of Ministry Of Industry And Trade to consider.

Article 7. Implementation

1. Unless otherwise extended or prematurely terminated, this agreement comes into force from the date of signing and remains effective from ………… to …………

2. During implementation, should a party request revision or termination of the agreement, that party must inform the other party 15 days in advance.

3. This contract is made into 02 equally legitimate copies. Each party retains 01 copy.

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Party B
(Signature, full name and seal)

ANNEX 3

SAMPLE PERIODIC REPORT ON INVESTMENT REGISTRATION AND IMPLEMENTATION OF SOLAR POWER PROJECT IN PROVINCES
(Attached to Circular No. 18/2020/TT-BCT dated July 17, 2020 of Minister of Industry and Trade on project development and sample power purchase agreement applicable to solar power projects)

PEOPLE’S COMMITTEE OF …………….. PROVINCE
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No. …/BC-.……

(Location and date)

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Investment registration and implementation of solar power projects in ………… Province from January 1, 20... to December 31, 20...

To: Ministry of Industry and Trade

1. Development of grid-connected solar power projects

1.1. Projects registered and implemented: Information and schedule consolidating registration and implementation of grid-connected solar power projects (in form of attachments)

1.2. Projects with approved investment guidelines: Consolidated information

1.3. Projects currently in implementation in electricity development planning or provincial planning: Consolidated information

2. Implementation progress of solar power projects

2.1. Name of first project:

Location:

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Investment guideline/investment permit No. ……… dated ................. /…./ ……….

Capacity at phase 1:

Capacity at phase 2 (if any):

Investment project preparation and approval:

Land clearance and transfer (if any):

Construction commencement date:

Current project progress:

Estimated operation date in phase 1:

Estimated operation date in phase 2 (if any):

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3. Drawbacks and recommendations

SCHEDULE ON CONSOLIDATED REGISTRATION AND IMPLEMENTATION OF GRID-CONNECTED POWER PROJECTS

No.

Project

Location

Proposed capacity (MW)

Area (ha)

Estimated total investment (VND billion)

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Estimated operation progress

Note

Transformer (TBA)

Power line (DZ)

Connection position

1

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2

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Total

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