Template of power purchase agreement for roof solar power system pursuant to Vietnamese laws

Date: 19 July 2021

BLawyers Vietnam presents underneath a template of power purchase agreement for roof solar power system pursuant to Vietnamese laws:

Power sale and purchase agreement template

SOCALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
——————–

POWER PURCHASE AGREEMENT FOR ROOF SOLAR POWER SYSTEM

Pursuant to:

  • Civil Code 2015;
  • Law on Commerce dated 14 June 2005;
  • Law on Electricity dated 3 December 2004 and the Law amending the Law on Electricity dated 20 November 2012;
  • Decree No. 137/2013/ND-CP of the Government dated 21 October 2013 providing detailed regulations on implementation of a number of articles of the Law on Electricity and the Law on Amendment of and Addition to a Number of Articles of the Law on Electricity;
  • Decision No. 13/2020/QD-TTg of the Prime Minister of the Government dated 6 April 2020 on encouragement mechanism for development of solar power in Vietnam;
  • Circular No. 28/2020/TT-BCT of the Minister of Industry and Trade dated 17 July 2020 regulating project development and standard form Power Purchase Agreement for solar power projects;
  • Two parties’ requirements for power purchase and sale.

Today, on ____________, at ____________

We are:

The Seller (Party A): ____________

Address:
Telephone: __________________Email: __________________Fax: ____________
Tax Code ____________________ Enterprise Registration Certificate: _________
Account: __________________________Bank __________________________
Representative:
Passport/ID Number:
Position: __________________ (Authorized by ________________________ pursuant to Power of Attorney (Number, date)).

The Purchaser (Party B): ____________

Address:
Telephone: __________________Email: __________________ Fax: ____________
Tax Code ____________________ Enterprise Registration Certificate:
Account: __________________________Bank __________________________
Representative:
Passport/ID Number:
Position: __________________ (Authorized by ________________________ pursuant to Power of Attorney (Number, date)).

To mutually enter into the Power Purchase Agreement (hereinafter referred to as the Agreement) to purchase and sell electrical energy produced from the roof solar power system (hereinafter referred to as the system) with the installed capacity of …. kW and the parameters stated in the Appendix (the appendix to be issued by Party B) which is invested, constructed, and operated by Party A at [location of construction of the system] on the following terms:

Article 1. Electrical energy purchased and sold

1. Party A agrees to sell to Party B and Party B agrees to purchase from Party A the amount of electrical energy produced from the system for generation onto the grid of Party B through meters installed at the power delivery point.

2. Party B is responsible to pay for the quantity of electrical energy from the system of Party A generated onto the grid of Party B at the power purchase price stated in Article 2 of this Agreement.

3. The two parties shall sign a separate power purchase agreement in respect of the electrical energy received by Party A from the grid of Party B which is not governed by this Agreement.

Article 2. Power purchase and sale price

1. The power purchase and sale price of the roof solar power system is in accordance with clause 2 of Article 8 of the Prime Minister’s Decision No. 13/2020/QD-TTg dated 06 April 2020 on incentive mechanism for developing solar power systems in Viet Nam.

2. The power purchase price stated in clause 1 of this Article is applied for a maximum period of twenty (20) years as from …………… until ………………… [dates].

Article 3. Certification of meter readings, electrical energy generated onto the grid and preparation of invoices

1. Certification of meter readings, and electrical energy generated onto the grid

– Party B records meter readings on …… of every month.

– Within no more than 05 working days from the date of recording meter readings, Party B shall inform Party A of meter readings and the volume of power generated from the system onto the grid in a payment cycle by the following methods:

Email [address for receiving emails] SMS/Zalo/Viber [phone number for receiving messages]

– Where Party A does not agree with the meter readings and the quantity of electrical energy generated onto the grid as informed by Party B, Party A is responsible to provide a response within 01 working day from the date of receiving of the notice from Party B by the following methods:

Web: ……………………. Email [address for receiving emails]

– If upon expiry of the above period, Party A does not provide a response to Party B, Party A shall be deemed to agree with the meter readings and the quantity of electrical energy generated onto the grid as informed by Party B.

2. Power amount payment

(a) Power amount: Based on the quantity of power agreed by the two Parties in clause 1 of this Article and the power purchase price stated in Article 2 of this Agreement, Party B shall make monthly payment of the power amount to Party A (exclusive of VAT) as follows:

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

In which:

T(n): Power amount to be paid in month n (dong).

Ag(n): Electrical energy generated by Party A onto the grid of Party B in month n (kWh).

– With respect to the one-tariff meter, Ag(n) means the volume of power generated by Party A onto the grid of Party B at the power delivery point as recorded by the meter.

– With respect to the three-tariff meter, Ag(n) means the total three-tariff volume [ of power] (normal hours, peak hours and off-peak hours) generated by Party A onto the grid of Party B at the power delivery point as recorded by the meter.

G(n): Power price applied to month n in accordance with Article 2 (dong/kWh) of this Agreement.

(b) VAT:

– If Party A is an entity subject to payment of VAT, then in addition to the power payments stated in clause 2(a) of this Article, Party B must pay Party A the amount of VAT in accordance with current regulations.

– If Party A is an individual or family household implementing a roof solar powered project and at the same time receiving power from the national power grid, then at the end of the last meter reading period for the year, Party B is responsible for conducting accounting finalization of the purchase monies for power from the solar power system in the year and for conducting accounting finalization of VAT for Party A depending on the revenue generated from the solar p owner system. Party A is responsible to co-ordinate with Party B in conducting accounting finalization of VAT in accordance with current provisions of law.

(c) Payment in a case of breakdown of the metering system

In the event of a breakdown of the system measuring the quantity of power (as a result of a fire, damage, a loss or incorrect operation), the Power Seller must immediately notify the Power Purchaser of such breakdown, and the parties shall prepare minutes of the breakdown and perform the agreement on the quantity of electrical energy which Party A has connected to the grid of Party B on the basis of the volume/output of the payment cycle of the previous year, month or week.

Article 4. Payment

1. Payment document

(a) If Party A is an enterprise which issues monthly invoices:

Party B provides monthly statements of meter readings and electrical energy generated by Party A onto the grid of Party B;

Party A provides invoices for sale of goods in accordance with regulations for power amount payment determined in Article 3.2 of this Agreement.

If the invoice issued by Party A is a directly deductible VAT invoice (namely the invoice does not contain a line for VAT and an amount of VAT payable) then Party A must send to Party B both a list of VAT and vouchers of VAT paid on power payments corresponding to the quantity of power purchased and sold for Party B to make payment of such amount of VAT to Party A.

(b) If Party A is an organization or individual who does not issue monthly invoices:

On a monthly basis:

Party B shall rely on the statement of meter readings and electrical energy generated by Party A onto the grid of Party B to make payment for the power amount to Party A which is determined in Article 3.2(a) of this Agreement.

On a yearly basis:

No later than fifteen (15) days from the end of the year or from the date of expiry of the Agreement, whichever is earlier, Party B prepares and sends to Party A for certification “Minutes of certification of the quantity of power delivered and received and of the power payments” in the year on the standard form to be issued by Party B.

Where the amount of revenue obtained by Party A is subject to tax as stated in Article 3.2(b), Party A is responsible to send to Party B sale invoices, and a list and source vouchers for payment of VAT on that part of electrical energy corresponding to the quantity of power purchased and sold in order for Party B to make payment of VAT.

2. Payment method

By bank transfer (transfer fees to be borne by Party A).

Details of transfer: ………………………………………………………

3. Time-limit for payment

(a) [The time-limit for payment is] 07 working days after the date on which Party A agrees with the meter readings and quantity of electrical energy generated onto the grid (as informed by Party B) and submits a complete payment file prescribed in clause 1 of this Article.

(b) If upon expiry of the above time-limit Party B fails to make payment to Party A, Party B is responsible to pay late payment interest on the entire amount of late payment calculated as from the day following the payment due date until the date on which Party B makes payment. Late payment interest shall be as agreed by the two Parties based on the provisions of the 2005 Commercial Law and they shall ensure the lawful rights and interests of the Power Seller.

Article 5. Rights and obligations of the parties

1. Rights and obligations of Party A

(a) To ensure that the design, installation work and operation is correct in accordance with the technical specifications and current provisions of law on power quality, on power safety, on construction, on the environment, and on fire and explosion prevention.

(b) To work with Party B to record, reach an agreement and monitor the quantity of power generated onto the grid of Party B.

(c) Not to connect any other power sources other than the system as agreed in this Agreement via the meters without consent of Party B.

(d) To fulfill all tax obligations in accordance with State regulations.

2. Rights and obligations of Party B

(a) To invest in and install meters at the power delivery point for Party A if Party A satisfies the interconnection standards stated in clause 1(a) of this Article.

(b) To work with Party A to record, notify, reach agreement, and monitor the quantity of power generated from the System onto the grid of Party B.

(c) To inspect and supervise operation, and deal with [issues] in accordance with current regulations.

(d) To be entitled to refuse to make payment if Party A does not comply with the provisions in sub-clauses (a), (c), and (d) of clause 1 of this Article.

Article 6. Dispute resolution

1. Dispute resolution by negotiation

If a dispute arises between the Parties to this Agreement, then the party instituting the dispute [disputing party] must provide written notice to the other party of the content of the dispute and of the former’s requirements within the prescribed limitation period. The parties shall negotiate a resolution of the dispute within 30 days as from the date of receipt of the notice from the disputing party. A resolution of a dispute relating to payment of power monies must be made within 5 days from the date of the notice from the disputing party.

If the parties are unable to resolve their dispute, then they have the right to send a written request to the competent State agency to assist them in resolving their difficulties.

This dispute resolution mechanism does not apply to a dispute which does not arise directly from this Agreement [but] is a dispute between one of the parties to this Agreement with a third party.

2. Dispute resolution in accordance with provisions of law

If a dispute is unable to be resolved by the negotiation method prescribed in clause 1 of this article or if one of the parties fails to comply with the results of negotiation, then one or both parties may send a petition to the higher-level power unit of the Power Purchaser or to the Ministry of Industry and Trade for consideration and resolution.

Article 7. Implementing provisions

1. Except for extension or early termination, this Agreement is of full force and effect as from the date of signing and has an effective term as from ………until ………[dates].

2. If during the period for implementation, either party requests amendment, supplement or termination of the Agreement, the requesting party must provide the other party with a 15-day-prior-notice for mutual resolution.

3. This Agreement is made into 2 copies with equal validity; each party keeps 1 copy.

Party A
(Sign, full name and seal)

Party B
(Sign, full name and seal)

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

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