On January 18, 2024, Vietnam’s National Assembly passed a new Land Law (“Land Law 2024”) that is scheduled to take effect on January 1, 2025, replacing the current Land Law 2013. To mitigate challenges faced by the real estate market, in late May 2024, the government proposed amendments to the Land Law that would move the effective date up five months, to August 1, 2024, pending approval by the National Assembly. One of the key sectors to be impacted by the Land Law 2024 is the energy sector, which requires large land areas for power plants and infrastructure, especially given Vietnam’s 2050 net zero emissions commitment. Below are highlights of how the new Land Law 2024 will affect Vietnam’s energy sector. Annual payment of land rental Under the Land Law 2013, investors implementing energy projects (e.g., solar power projects) are entitled to choose to lease land with either (i) an annual rental payment or (ii) a single upfront payment for the entire term of use. Under the Land Law 2024, these investors are only allowed to use land in the form of an annual rental payment. As the annual land rental is calculated in five-year cycles, based on the land price table decided by the state, this new restriction means that investors in energy projects will face an additional risk of a sudden increase in land rental, disrupting their financial planning. Investors using land sites leased with annual rental payments are also not allowed to mortgage their land-use rights, but can only mortgage assets attached to the land, at credit institutions licensed to operate in Vietnam. Accordingly, this may affect the ability of energy projects to obtain financing during the development stage, because they no longer have assets that can be mortgaged. Obtaining land Under the Land Law 2024,

As Vietnam continues its rapid economic development, the demand for sustainable and reliable energy sources has never been more critical. Solar power has emerged as a key component of Vietnam’s strategy to diversify its energy portfolio and reduce its carbon footprint. Recent developments of the regulatory framework governing solar power projects in Vietnam, as discussed below, highlight the country’s commitment to renewable energy and its efforts to create a conducive environment for solar power investments. Objectives for the Development of Solar Power Projects On May 15, 2023, the Prime Minister issued Decision No. 500/QD-TTg, approving the National Power Development Plan for 2021-2030 with a vision to 2050 (“PDP VIII”). Following this, on April 1, 2024, the Prime Minister promulgated the Implementation Plan for PDP VIII (“Implementation Plan”). These documents underscore Vietnam’s commitment to promoting renewable energy, particularly solar. They emphasize self-production and self-consumption of solar power, the development of rooftop solar systems, and the promulgation of the direct power purchase mechanism. The integration of solar power with battery storage is also encouraged, contingent upon economic viability. PDP VIII sets ambitious capacity targets for solar power. By 2030, the capacity is projected to reach approximately 12,836 MW, accounting for 8.5% of the total power capacity. This includes 10,236 MW from concentrated solar power and 2,600 MW from self-production and self-consumption solar power. By 2050, the capacity is expected to rise to between 168,594 MW and 189,294 MW, representing 33.0-34.4% of the total power capacity. Additionally, PDP VIII and the Implementation Plan list 27 solar power projects, totaling 4,136.25 MW, slated for implementation after 2030. However, these projects may be advanced under self-production and self-consumption arrangements. Draft Decree on Direct Power Purchase Agreements On April 15, 2024, the Ministry of Industry and Trade (“MOIT”) released a draft decree on direct power

On March 24, 2021, the Prime Minister of Vietnam issued Decision No. 12/2021/QD-TTg issuing regulations on oil spill response. One of the more notable changes is the introduction of templates for oil spill response plans.

The latest edition of Practical Law Company’s Doing Business in … Global Guide includes a chapter on Vietnam written by lawyers from Tilleke & Gibbins’ Ho Chi Minh City and Hanoi offices. The popular guide, produced in association with Lex Mundi, the world’s largest network of independent law firms, provides the ins and outs of establishing and operating a business in more than 50 jurisdictions worldwide.The Vietnam chapter covers the following main topics: