Legal analysis for Vietnam's Certificate of Construction Acceptance for FiT energy project

Foreign chambers have quietly raised concerns over Vietnam’s retroactive FIT cuts affecting 12GW of solar and wind projects, heightening credit risks and fears of prolonged legal disputes. (Image: iStock)

Editor’s note: Vietnam’s DPPA rollout signals progress, but retroactive FiT disputes affecting 12GW of solar and wind projects have renewed investor concerns. Hoang Pham, Managing Partner at VSE Lawyers, examines the role of Construction Completion Acceptance (CCA) in determining project eligibility and tariff entitlement, and provides a legal perspective on the ongoing disputes.

Definition of Feed-in Tariff energy projects

Feed-in Tariff (FiT) projects refer to wind and ground-mount solar projects that are entitled to a fixed electricity purchase price set by the government for a specified period in order to encourage investment in clean energy development.

In Vietnam, the FiT mechanism has been applied to several types of renewable energy projects, including solar power, wind power, and biomass power, through decisions issued by the Prime Minister and implementing regulations of the Ministry of Industry and Trade. Under the current legal framework, projects that satisfy requirements regarding commercial operation dates, inclusion in the power development planning, and technical and grid-connection standards may enter into power purchase agreements with Vietnam Electricity (EVN) and benefit from the applicable FiT rate for the prescribed duration. This mechanism aims to provide revenue certainty for investors while promoting the development of renewable energy and contributing to national energy security.

With respect to the legal basis, the FiT mechanism in Vietnam is primarily governed by specific decisions of the Prime Minister applicable to wind and solar projects, in particular:

1. Solar power projects are regulated under Decision No. 11/2017/QD-TTg (Solar FiT 1) and Decision No. 13/2020/QD-TTg (Solar FiT 2);
    
2. Wind power projects under Decision No. 37/2011/QD-TTg (Wind FiT 1), as amended and supplemented by Decision No. 39/2018/QD-TTg (Wind FiT 2); and

One of key important highlights for FiT mechanism for Wind and Solar Projects is the requirement for the FiT project is that the Project is needed to obtain the Commercial Operation Date before certain fixed day as stipulated in those regulations to obtain the incentive fix USD-marked price. For instance, in line with Article 5.1 of Decision 13/2020/QD-TTg: “Grid-connected solar power projects that had their investment policy approved by a competent authority before 23 November 2019, and that achieved the commercial operation date (COD) of the project or a part of the project during the period from 1 July 2019 to 31 December 2020, shall be entitled to apply the electricity purchase price schedule for grid-connected solar power projects at the electricity delivery point as specified in the Appendix of this Decision”.

Certificate of Construction Acceptance (CCA) under Vietnam laws

The Certificate of Construction Acceptance (CCA) is a document issued by the local construction authorities as a result of construction work inspection confirming that construction works or construction items have been completed and accepted in accordance with approved designs, technical standards, and applicable legal regulations before it is put into operation or use. At the time of FiT projects, the legal basis for the Certificate of Construction Acceptance is primarily provided under the Law on Construction No. 50/2014/QH13, as amended by Law No. 62/2020/QH14, which regulates construction quality management and acceptance of completed construction works.

Detailed provisions are further set out in Decree No. 06/2021/ND-CP on quality management, construction, and maintenance of construction works, which specifies procedures for acceptance of construction works and conditions for putting works into operation and Circular No. 10/2021/TT-BXD provides guidance on construction quality management and the forms of acceptance records and completion documentation, forming the practical legal framework for issuing and documenting construction acceptance certificates in Vietnam.

Whether CCA is considered as mandatory conditions for FiT in projects

As above-mentioned, since FiT Mechanism requires a strict deadline to reach the eligible Commercial Operation Date (COD) for the Wind and Solar Projects, a group of Wind and Solar Projects that not reach the eligible COD shall not receive the incentive fix USD-marked price and classify as “Transitional Projects” (In Vietnamese: Dự Án Chuyển Tiếp) and subject to re-negotiation with EVN for significant lower energy tariff^[1]. Other group of Wind and Solar Projects that was generating electricity before the eligible COD was expected by relevant GENCO to receive incentive fix USD-marked price under relevant Solar and Wind FiT Mechanism, one of striking questions was raising: “For those projects generating the electricity before the eligible COD date, whether CCA is considering as a condition for legally achieved the commercial operation date (COD)”?

Below is my analysis for arguments from both project owners and EVN on this matter:

1. Firstly, the project owners argued that the Certificate of Construction Completion Acceptance (CCA) is not a mandatory condition for entitlement to the Feed-in Tariff (FiT) as Decision No. 13/2020/QD-TTg only sets out two main conditions: (i) the project must have obtained an investment policy decision prior to 23 November 2019; and (ii) the Commercial Operation Date (COD) must fall within the period from 1 July 2019 to 31 December 2020. The Decision does not require a written approval of construction completion acceptance from a competent state authority.
   
   From EVN’s standpoint, in addition to the provisions of Decision 13, EVN may rely on the standard PPA issued together with Circular No. 18/2020/TT-BCT of the Ministry of Industry and Trade, which requires the power seller (the project owners) to construct, operate, and manage the power plant in compliance with all applicable Vietnamese laws, including laws on construction, safety, and environmental protection. Therefore, EVN may argue that although the CCA is not explicitly mentioned in Decision 13, if under the Law on Construction 2014 and its implementing regulations power facilities are required to undergo completion acceptance and inspection before being put into operation, the failure to complete this procedure may be considered a failure to fully comply with legal obligations under the PPA, which may in turn affect the validity of COD and the applicability of the FiT tariff.
    
2. Secondly, the project owners claimed that CCA is not a condition for eligible COD as defined in template PPA provided by relevant legal regulations. In line with the standard Power Purchase Agreement (PPA) for grid-connected solar projects under Circular No. 18/2020/TT-BCT or for wind projects under Circular 02/2019/TT-BCT, the Commercial Operation Date (COD) is defined as the date on which the power plant or part of the power plant is ready for commercial electricity generation after completion of the necessary testing and confirmation by the power purchaser (EVN) with the issuance of electricity operation license – a specialized license for electricity sector. The fact that the plant has been energized and has commenced commercial electricity generation demonstrates that the project has satisfied the technical requirements of the power sector; therefore, COD has been validly established in accordance with sector-specific procedures, regardless of whether the CCA has been obtained.
   
   From EVN’s perspective, this argument may be challenged based on Article 124 of the Law on Construction 2014 (as amended in 2020), which provides that construction works may only be put into operation and use after the completion acceptance has been conducted in accordance with construction laws. For construction works subject to state authority inspection of acceptance under Article 123 of the Law on Construction 2014 (amended by the Law on Construction 2020) and Article 24 of Decree 06/2021/ND-CP, failure to complete this procedure may mean that the project has not yet satisfied the legal conditions required for operation. Accordingly, although COD is confirmed under the technical procedures of the power sector, it can only be considered legally valid if the project simultaneously complies with all applicable construction laws.
    
3. Third, the project owners argued that the CCA was not required by the Law on Construction and its guiding regulations at the time of FiT mechanism. Under Article 123 of the Law on Construction 2014 (as amended in 2020), certain groups of construction works must undergo acceptance inspection by competent state construction authorities, including national important projects, large-scale or technically complex projects, projects significantly affecting community safety and interests, and projects using state capital. The project owners may argue that, under Appendix II of Decree No. 46/2015/ND-CP (later replaced by Decree No. 15/2021/ND-CP came in to force from 03 March 2021), energy projects from Class III and above are categorized as “projects affecting community safety and interests” rather than “projects significantly affecting community safety and interests,” and therefore do not fall within the category requiring state authority inspection of completion acceptance under Article 123 on the Law on Construction.

From EVN’s perspective, this argument may be challenged based on a holistic interpretation of the construction law framework and the regulatory objective of managing risks associated with projects that affect the public. The list of projects in Appendix II of Decree 46/2015/ND-CP serves as a technical basis for identifying types of projects posing risks to community safety, including energy projects of Class III and above such as power plants, substations, and other electricity facilities, which inherently involve complex technical characteristics and potential risks to the power system and public safety. Accordingly, a rigid linguistic distinction between “affecting” and “significantly affecting” community safety may not accurately reflect the regulatory purpose of construction law. Furthermore, subsequent regulations under Decree No. 15/2021/ND-CP use the term “projects significantly affecting community safety and interests” to refer to similar categories of projects, suggesting that the legislative intent is to place energy infrastructure within the category of projects subject to strict acceptance control. In addition, EVN may further state that CCA is not new requirements from the Government and on 07 October 2021, MOIT had the Official Letter 1892/DL-NLTT to request the construction and fire-fighting approval was the mandatory requirements for the Wind Farm FiT Projects^[2].

Conclusion

From my above-mentioned analysis and in my personal opinions, no new rule or requirement for CCA has been introduced for FiT energy projects but instead, a difference in interpretation and application of an existing regulation has sparked disputes over whether projects need CCA approvals to qualify for eligible commercial operation date and access to FIT mechanisms. Also, from the Vietnam Government’s perspective, in order to prevent this ambiguity, in the recent legal regulations for Gas-fired power projects using LNG and domestic natural gas, the conditions for those projects are subject to incentive of output guarantee, in line with Article 15.4 of Decree 56/2025/NĐ-CP, the projects is requested to achieve “the commercial power generation operation date is before [XXX], after the competent state authority has issued a written notification approving the results of the completion acceptance of the works carried out by the investor”.

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^[1] Status of Transitional Projects can be found at EVN Website. 
^[2] Official Letter 1892/DL-NLTT can be found at EVN Website. 

Disclaimer: This article reflects the analysis and views of a lawyer. It does not represent the position of any judge, legislator, government authority, or regulatory body, and it is not intended to provide a definitive “black-or-white” determination on the issue discussed. Rather, the article aims to present certain viewpoints expressed by relevant parties and to highlight the regulations that were applicable at the time the FiT Projects were developed.