Private power investment: Need for fair and transparent mechanisms

In the context of Vietnam facing the requirement of ensuring energy security, the effective mobilization of investment resources plays a very important role, especially from the private sector. However, some existing problems are causing major obstacles for independent power plants, typically the case of An Khanh Thermal Power Joint Stock Company - one of the typical units operating under the private investment model in the energy sector in Thai Nguyen.

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Staff of An Khanh Thermal Power Plant monitor technical parameters to ensure safe operation of machinery systems. Photo: TL

In a recent petition sent to the Vietnam Energy Association, An Khanh Thermal Power Joint Stock Company pointed out a number of difficulties in implementing the contents of the National Power Plan 2025. Notably, the power purchase agreement (PPA) output allocated to the Plant is very low, not commensurate with the initial investment capacity and financial plan. This fact significantly reduces the investment efficiency and debt repayment capacity of the enterprise.

Unlike power generation centers under EVN, PVN or TKV – which are guaranteed by the State and deeply involved in the national power system – private plants like An Khanh do not have that advantage. Their only source of income is from selling electricity.

When production is cut and the market price of electricity is significantly lower than the forecast in the feasibility report (FS), the plants face the risk of financial imbalance, lack of cash flow to pay operating costs, principal and interest. This is a major barrier that discourages private investors, who are not given “priority in mobilization”, but are fully responsible for borrowing, investing and ensuring operations.

Along with that is the situation of delayed payment of exchange rate differences. According to the reflection, from 2019 to 2024, An Khanh Thermal Power Plant has not been paid the exchange rate difference amounting to more than 210.8 billion VND. This not only causes great financial pressure but also breaks the principles of contract security in the PPA.

Enterprises still have to borrow capital to buy fuel to produce electricity, meeting requirements from the National Power System Control Center, while legitimate rights are not guaranteed.

If the above shortcomings are not resolved soon, the investment environment in the energy sector will become more difficult. Existing investors are at risk of withdrawing, while new projects, especially those with large investment rates such as LNG power, will have difficulty raising capital.

An Khanh Thermal Power Plant, in An Khanh commune ( Thai Nguyen ). Photo: TL

From that reality, An Khanh Thermal Power Joint Stock Company has some important recommendations: Review the mechanism for allocating power purchase contract output, ensuring transparency and fairness among factories; The Government and the Ministry of Industry and Trade should soon direct and decide on full and timely payment of exchange rate differences according to signed contracts, ensuring the legitimate rights of investors, especially projects with high investment rates such as thermal power and LNG; strengthen dialogue between management agencies and enterprises, listen to opinions from practice, thereby updating policies suitable to the situation and orientation for sustainable development.

The above shortcomings not only affect the production and business activities of a specific enterprise, but also reflect the barriers that the private economic sector is facing in the energy sector.

Removing difficulties for investors like the case of An Khanh Thermal Power Joint Stock Company is not only an urgent requirement to ensure national energy security, but also a concrete step to realize the spirit of Resolution No. 68-NQ/TW of the Politburo on continuing to innovate, develop and improve the efficiency of the private economy.

In this Resolution, the private sector is identified as one of the important driving forces of the economy, which needs to be encouraged, supported and facilitated to develop equally with other economic sectors. Meanwhile, the energy industry is a sector that requires large investment, long payback period and has many potential policy risks.

Therefore, it is urgent to build a transparent, fair and stable mechanism to create motivation to promote the private economy in this field, contributing to the successful implementation of the country's sustainable development goals in the coming time.

Source: https://baothainguyen.vn/kinh-te/202507/dau-tu-dien-tu-nhan-can-co-che-cong-bang-va-minh-bach-c2c1836/