Proposed support policies for manufacturing industry serving the electricity sector

In the draft Decree on the application of science, technology and development of manufacturing industry in the electricity sector, the Ministry of Industry and Trade proposed many mechanisms and policies to encourage domestic enterprises to participate in the production and supply of equipment and services for the electricity sector, towards technological autonomy and ensuring national energy security.

According to the draft, investors of power projects are allowed to order and prioritize the use of important products, equipment, technology and consulting services in the power sector issued periodically, in accordance with domestic production capacity and socio -economic development situation.

Organizations, businesses, and individuals supplying domestic electrical equipment for the first time, if the products are manufactured, manufactured, tested to meet technical, safety, and environmental standards or are formed from scientific research results, will be directly supplied to the power project. The order price is determined on the basis of reasonable production costs plus legal profits and has an independent audit. Suppliers are supported 100% of the cost of purchasing insurance for products from the Science, Technology and Innovation Development Funds, are given a price discount of up to 10% compared to similar imported products, are exempted from capacity and experience requirements when participating in ordering, and are exempted from administrative, civil, and criminal liability if they comply with the correct procedures and do not commit acts of profiteering or fraud.

Electrical equipment products that have been produced domestically, meet standards and have been used in power projects will be given priority for continued use. Enterprises supplying these products will be added to the list of domestically produced machinery, equipment and technological lines, and will enjoy support and incentives, access to technology innovation programs and production expansion from national and local science and technology funds.

The draft also encourages domestic enterprises to be investors in important power projects such as offshore wind power, nuclear power, fuel conversion of coal-fired thermal power plants, strategic backup power sources, new energy, national power transmission from 220 kV, energy storage, smart grid, batteries and hydrogen. In case domestic bidding does not have a qualified unit, the investor is assigned to a consulting consortium consisting of a domestic contractor as the main consultant and foreign units as sub-consultants. Domestic contractors are allowed to use the experience of foreign partners to participate in bidding for subsequent projects. If the main construction or equipment supply package does not have a qualified unit, the investor can choose a foreign contractor but must transfer technology and technical design to domestic enterprises for localization of manufacturing, maintenance and repair.

Enterprises selected as investors of important power projects must operate legally in Vietnam, have equity capital of at least 20% of the total investment, have managed or operated at least one power project of 200 MW or more or a project worth VND500 billion, own or develop key power technology and commit to using at least 60% of the value of domestic equipment and services. Projects that meet these criteria are given priority to mobilize maximum capacity, and the electricity generation price is negotiated but does not exceed the price frame issued by the Ministry of Industry and Trade.

The Ministry of Industry and Trade proposes support policies for manufacturing industries serving the electricity sector. Photo: PV

Regarding support for research and application of science and technology, enterprises researching and developing technology and electrical equipment are supported with 50% of the cost of using laboratories, testing centers, inspection and measurement centers of the State. In addition, enterprises are allowed to conduct controlled testing of products in the list of important electrical equipment, are directly assigned the task of researching and applying technology to produce key electrical equipment and are supported with up to 100% of the cost of purchasing copyrights for designs, technology and specialized software for production.

The State also encourages the establishment of energy industry-service complexes, forming a research ecosystem, commercializing manufactured industrial products and providing ancillary services for the electricity industry. Enterprises manufacturing electrical equipment are supported with up to 70% of the cost of hiring experts and scientists to serve research, design, manufacturing, especially core software, integrated monitoring and control systems and important consulting services.

Small businesses and innovative startups in the electrical equipment manufacturing industry are entitled to a minimum 30% reduction in land rental fees for the first five years from the date of signing the lease contract in industrial parks, industrial clusters, and technology incubators. Supporting industry enterprises are given priority to lease unused public assets in the locality, with criteria and procedures prescribed by the Provincial People's Committee.

Regarding credit support, electrical equipment manufacturing enterprises are supported with an interest rate of 2%/year when borrowing capital for electrical equipment manufacturing projects that meet green, circular criteria, and apply ESG standards. They are also entitled to borrow investment credit from the State, have priority access to commercial capital to invest in new technology, and are entitled to borrow from investment support funds and science and technology funds to research, develop, and test manufacture electrical equipment products.

The draft Decree is expected to create a legal corridor to promote the autonomous capacity of the electrical equipment manufacturing industry, form a domestic supply chain, encourage Vietnamese enterprises to master key energy technologies, contribute to ensuring national energy security and sustainable development of the electricity industry.

Source: https://daibieunhandan.vn/de-xuat-chinh-sach-ho-tro-cho-cong-nghiep-che-tao-phuc-vu-nganh-dien-luc-10390425.html