CIRCULAR

GUIDELINES FOR FINANCIAL MECHANISM TO SUPPORT ELECTRIC PRICE FOR WIND POWER PROJECTS ON GRID TIE

Pursuant to the Law on State Budget dated December 16, 2002;

Pursuant to Decree No. 118/2008/ND-CP dated November 27, 2008 of the Government regulating functions, duties, powers and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 37/2011/QD-TTg dated June 29, 2011 of the Prime Minister on mechanism to support develop the wind power projects in Vietnam;

At the proposal of the Director of Finance Department of banks and financial institutions

Minister of Finance makes guidance on financial mechanism to support the electricity price of wind power projects on grid tie as follows:

Article 1. Scope of adjustment

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2. The electricity product is supported the price by the State is the electricity produced from wind power projects built, operated and connected to the national grid to provide a portion or all of the electricity production.

3. The wind power projects on grid tie are supported the electricity price as stipulated in Decision No. 37/2011/QD-TTg and guidance in this Circular shall not apply mechanism of subsidiary for the power output of the project under other current regulations.

4. The wind power projects if permitted by the competent authorities for the application under the provisions of Decision No. 130/2007/QD-TTg dated August 02, 2007 by the Prime Minister on a number of mechanisms, financial policies for investment projects under the clean development mechanism shall be applied the mechanism of price support as stipulated in the joint Circular No. 58/2008/TTLT-BTC-BTN & MT dated July 04, 2008 of the Ministry of Finance, Ministry of Natural Resources and Environment guiding the implementation of some articles of Decision No. 130/2007/QD-TTg dated August 02, 2007 by the Prime Minister on a number of mechanisms and financial policies for investment projects under the clean development mechanism; the joint Circular No. 204/2010/TTLT-BTC-BTN & MT dated  December 15, 2010 of the Ministry of Finance, Ministry of Natural Resources and Environment amending and supplementing some contents of the joint Circular No. 58/2008/TTLT-BTC-BTN of dated July 04,2008.

Article 2. Subjects supported electricity price

Subjects supported the electricity price by the State through the Vietnam Environmental Protection Fund is the Vietnam Electricity (EVN) or authorized affiliated units (hereinafter referred to as the electricity buyer) to purchase electricity from enterprises producing, operating and selling electricity from wind power projects (hereinafter referred to as the electricity seller) as stipulated in the Decision No. 37/2011/QD-TTg.

Article 3. Conditions for support of electricity price

1. The buyer is obliged to buy all electricity produced from wind power plants on grid tie under their management area as prescribed in Clause 1, Article 11 and Clause 1, Article 14 of Decision No. 37/2011/QD-TTg.

2. The electricity sale and purchase is done through a power sale contract made under the form of power sale contract form applicable to wind power projects on grid tie issued by the Ministry of Industry and Trade. The power purchase price complies with provisions in Article 14 of Decision No. 37/2011/QD-TTg.

3. Having complete requesting record for power price support under the provisions of Article 7 of this Circular.

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1. The rate of electricity price support to the Buyer for the whole power output purchased from wind power plant on grid tie is VND 207/kWh.

2. Rate of electricity price support shall be changed as decided by the Prime Minister from time to time.

Article 5. Amount of electricity price support

Amount of electricity price support for the Buyer is determined as follows:

Amount of electricity price support (VND)

=

Rate of electricity price support (VND/kWh)

x

Powe output purchased (kWh)

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Article 6. Time for power price support

1. Time for power price support is the time of the power sale contract as prescribed at Point a, Clause 2, Article 11 of Decision No. 37/2011/QD-TTg and is effective.

2. Time for power price support shall be changed by the decision of the Prime Minister from time to time.

Article 7. Requesting record for power price support

1. Requesting record for power price support

a) Written request for power price support of the buyer

b) The written authorization of the Vietnam Electricity for cases where the buyer is the affiliated units. This document is only submitted once on the first time of the proposal for power price support and must be supplemented if there is a change in the authorization of the Vietnam Electricity for the affiliated units.

c) The power sale contract was signed and entered into force between the buyer and seller (original or certified copy). This contract is only submitted once on the first time of the proposal for power price support and must be supplemented if there is a change in the power sale contract or signing new contract.

d) Minutes of certification of meter in the period between the buyer and seller (certified (copy with certification of the buyer).

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e) The documents of payment transfer of electricity charges to the buyer for the sale of electricity on the amount of electricity sold  and purchased by each time (copy).

g) Other relevant documents (if any)

2. The buyer shall provide complete, truthful and relevant documents and take responsibility for the accuracy of the materials provided.

Article 8. Making estimate, allocating estimate, executing estimate, accounting record and settlement of funds for power price support and regulation on report.

1. Making estimate:

a) Before June 30 each year, the buyer shall base on power sale contracts, registration document of power estimated to be sold for the following year of the seller; aggregate the amount of power estimated to be purchase of the following year by each wind power plant on grid tie and anticipate total amount of money for power price support as prescribed in order to send to Vietnam Environmental Protection Fund.

b) Prior to July 10 each year, the Vietnam Environmental Protection Fund shall review and anticipate the support of power price for the following year of the Buyer, make estimate of expenditure for power price support of the following year to send to the Ministry of Natural Resources and Environment, the Ministry of Industry and Trade for their opinions.

c) Prior to July 20 each year each year, based on the opinions of the Ministry of Industry and Trade, Ministry of Natural Resources and Environment, aggregating the fund resources for power price support into the scheme for allocation of non-business expenditure for environmental protection from the central budget in order to send to the Ministry of Finance to consider and synthesize report to the Government and present to the National Assembly for consideration and decision.

2. Allocating estimate:

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3. Executing estimate

a) Based on the requesting record for power price support of the buyer by each time in the year, the Vietnam Environmental Protection Fund shall check and determine the rate to be supported to the buyer as prescribed for the withdrawal of estimate with a limit equal to the total rate to be supported to the buyer by each time and make direct payment to the supported amount to the buyer ensuring the accumulation of each withdrawal of estimate not exceeding the all year estimate assigned.

b) In case there is amount to be supported under the provisions exceeding the annual, the Vietnam Environmental Defense Fund shall promptly report to Ministry of Natural Resources and Environment, Ministry of Finance to synthesize and submit to competent authorities for specific settlement

4. Accounting record regulation on report

The Vietnam Environmental Defense Fund shall record accounting for expenditure of power price support from state budget into the revenue source and expenditure of use of the Vietnam Environmental Defense Fund, implementing periodical and annual reporting regime under the current regulation on management of state budget and regulation on financial management of the Vietnam Environmental Defense Fund

Article 9. Implementation organization

This Circular takes effect as from August 1, 2012. During execution, if any difficulties arise, the agencies and units should make prompt report to the Ministry of Finance for study, amendment and supplement.

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