Decision No. 31/2014/QD-TTg dated May 05, 2014 of the Prime Minister on supporting mechanism for development of power generation projects using solid waste in Vietnam

THE PRIME MINISTER

Decision No. 31/2014/QD-TTg dated May 05, 2014 of the Prime Minister on supporting mechanism for development of power generation projects using solid waste in Vietnam

Pursuant to the Law on organization of Government dated December 25, 2001;

Pursuant to the Electricity Law dated December 3, 2004; the Law amending and supplementing a number of articles of the Electricity Law dated November 20, 2012;

Pursuant to the Law on Environmental Protection dated November 29, 2005;

Pursuant to the Law on Investment dated November 29, 2005;

Pursuant to the Law on Construction dated November 26, 2003; the Law amending and supplementing a number of articles of the laws relating to capital construction investment No.38/2009/QH12 dated June 19, 2009;

At the request of the Minister of Industry and Trade,

The Prime Minister issues the Decision on supporting mechanism for development of power generation projects using solid waste in Vietnam.

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Decision stipulates the supporting mechanism for development of power generation projects using solid waste in Vietnam;

2. Subject to the application of this Decision are organizations and individuals involved in power activities related to the power generation projects using solid waste in Vietnam;

Article 2. Explanation of term

In this Decision, the terms below are construed as follows:

1. Electricity Buyer is the Vietnam Electricity or its authorized member unit;

2. Electricity Seller is organizations and individuals having the power operation permit in the field of power generation from power plants using solid waste;

3. Investor of power generation projects using solid waste is organizations and individuals that carry out the investment activities of power generation projects using solid waste under regulations of Vietnam’s laws;

4. Solid waste used to generate electricity is the waste in solid state discharged from the process of production, business, services, activities, or other activities without containing hazardous waste.

5. Power generation project using solid waste is the project in which the power plant uses main energy from solid waste directly burnt or combustion gas collected from the solid waste landfill to produce power or supply part or the whole of power generated to the national grid.

6. Connection point is the place where the line of electricity seller s is connected to electricity system of the electricity buyer;

7. Electricity delivery point is the place where the metering equipment is installed as agreed in the electricity sale contract to determine the power output of electricity seller;

8. Electricity sale contract sample for power generation projects using solid waste is the electricity sale contract issued by the Ministry of Industry and Trade as a basis for application in transaction and sale of electricity produced from the power generation projects using solid waste between the electricity seller and electricity buyer;

Chapter 2.

PLANNING AND DEVELOPMENT OF POWER SOURCE USING SOLID WASTE

Article 3. Planning and development of power source using solid waste

1. Planning and development of power source using solid waste is the specialized electricity planning which made for the whole country as a basis for activities of investment and development of power source using solid waste and adjusted in accordance with research and assessment of potential solid waste in each period.

2. Planning and development of power source using solid waste must be consistent with the strategy of economic development of the country, regional construction planning and management planning of solid waste approved by the competent authority, land use planning and other relevant planning;

3. Planning and development of power source using solid waste is made once for the period till 2020, with a vision to 2030 and shall be adjusted and added when necessary. From the subsequent planning stages, the planning and development of power source using solid waste shall be integrated into the provincial power development planning and the national power development planning and shall be adjusted and added in accordance with the reality of research and evaluation of potential solid waste for power production;

Article 4. Formulating, appraising, approving, publishing and adjusting the Planning and development of power source using solid waste

1. The Ministry of Industry and Trade shall formulate and appraise the Planning and development of power source using solid waste and submit it to the Prime Minister for approval; announcing, guiding, monitoring and inspecting the implementation of approved Planning and development of power source using solid waste;

2. The announcement and adjustment of planning shall comply with current regulations;

Article 5. Funding for the formulation, appraisal, approval and announcement of Planning and development of power source using solid waste

1. The State budget shall allocate fund for formulation, appraisal, announcement and adjustment of Planning and development of power source using solid waste;

2. Other legal funds are encouraged to mobilize for the formulation of Planning and development of power source using solid waste;

Article 6. Investment in building power generation projects using solid waste

1. The investment in building power generation projects using solid waste must be consistent with the power development planning using solid waste approved by the competent authority;

2. For the power generation projects using solid waste not included in the list of Planning and development of power source using solid waste and the national power development planning approved. The investor is responsible for preparing dossier to request the additional planning to be submitted to the Ministry of Industry and Trade for appraisal and to the Prime Minister for consideration and decision;

3. When the Planning and development of power source using solid waste has not been approved, the investment in power generation projects using solid waste must be approved by the Prime Minister;

4. The investment in power generation projects using solid waste is carried out under regulations of law on construction, fire prevention and fighting, environmental protection and other relevant regulations;

Article 7. Connecting the power generation projects using solid waste to the electricity system

1. The connection of the power generation projects using solid waste to the national power grid must be consistent with the power development planning approved. The connection point shall be agreed by the electricity Buyer and the electricity Seller on the condition that the electricity Seller provided that the electricity Seller is responsible for investment of power transmission line to the existing nearest connection point of national power grid under the provincial power development planning. If the connection point to the national power grid has not been included in the power development planning, the investor needs to make an agreement upon the connection point with the distributing unit or power transmitting unit as a basis for additional provincial power development planning under current regulations of law. In case of failure of agreement on connection point, the electricity Seller shall request the Ministry of Industry and Trade for consideration and decision;

2. The investor of power project using solid waste is responsible for investment, operation and maintenance of line and step-up substation (if any) from the power plant of the electricity Seller to the connection point under the connection agreement with the electricity Buyer;

3. Depending on the connection voltage level, the distributing unit or power transmitting unit shall be responsible for investment in transmission line from the connection point to the national power grid under the power development planning approved and sighing of connection agreement with investor of power generation project using solid waste;

4. After completing the investment, accepting and put it into commercial operation, the dispatching and operating unit of power system and market shall mobilize the power plant using solid waste in the principle of priority use the capacity and generated power in accordance with the ability to provide solid waste fuel in the area of power plant;

Article 8. Conditions for starting the construction of power generation project using solid waste

The investors are only allowed to start theconstruction of power generation project using solid waste, in addition to the conditions specified in Article 72 of the Law on Construction and the relevant legal normative documents, they must have: Investment Certificate, written approval for electricity buying of the Buyer, connection agreement with the distributing unit or power transmitting unit; opinions on design from the competent state agencies under regulations of law on management of construction investment.

Article 9. Termination of project

Within 12 months from the date of being issued with investment Certificate, the investor does not start the construction of main items of works or a maximum of 24 months from the date of commitment of operation in the investment Certificate, but the power generation works using solid waste has not put into operation, the provincial People’s Committee shall consider the revocation of investment Certificate as prescribed, report to the competent agency in order to assign the project to another investor for implementation unless there is plausible reasons and approved by the competent authority for the suspension or extension of project implementation.

Article 10. Reporting regulation on project implementation

1. Within 05 working days from the date of issue of investment Certificate, the investor shall send a certified copy of investment Certificate to the Ministry of Industry and Trade for monitoring and management;

2. Within the time of construction of power generation project using the solid waste, before the 15^thdate of the first month of quarter, the investor shall make report on the implementation of project of previous quarter and the plan for implementation of the following quarter. Before January 15 annually, the investor shall make a report on the implementation of project in the previous year and the plan for implementation of the following year to be sent to the provincial People’s Committee and the Ministry of Industry and Trade for management, summary and monitoring of implementation and the electricity Buyer to coordinate the implementation;

Chapter 3.

SUPPORTING MECHANISM FOR DEVELOPMENT OF POWER GENERATION PROJECTS USING SOLID WASTE

Article 11. Responsibility for electricity buying from power generation projects using solid waste

1. The electricity buyer shall buy all power produced from power plants using solid waste under its management area;

2. The buying and selling of electricity are carried out through the electricity sale contract made under the electricity sale contract sample applicable for power generation projects using solid waste issued by the Ministry of Industry and Trade;

3. Within 06 months from the date the investor of power generation projects using solid waste send the written request for selling of electricity, the Buyer shall sign the electricity sale contract with the Seller as prescribed;

4. The term of electricity sale contract for power generation projects using solid waste is 20 years from the date of commercial operation. After 20 years, both Parties may extend the term of contract or sign a new contract as provided for by current law;

Article 12. Incentives for investment, tax

1. Mobilization of invested capital

a) Investor may mobilize capital from foreign and domestic organizations and individuals for investing in power generation projects using solid waste as provided for by current law;

b) The power generation projects using solid waste shall be entitled to the incentives of investment credit under current regulations of law on investment credit and export credit of the State;

2. Import tax: The power generation projects using solid waste shall be entitled to the exemption of import tax for imported goods to create fixed assets for the project; imported goods as raw materials, supplies and semi-products that have not been produced in the country shall be imported for production of the project as stipulated by current regulations of law on import and export tax;

3. Corporate income tax: The exemption and reduction of corporate income tax for the power generation projects using solid waste shall apply as for projects under the areas of investment incentives as stipulated by current regulations of law on tax.

Article 13. Incentives for land

1. The land use fees or land rent for the power generation projects using solid wasteand the works of transmission line and substation for connection to the national power grid shall be exempted or reduced under current regulations of law applicable to projects under the areas of investment incentives.

2. Based on the planning approved by the competent authorities, the provincial People’s Committee shall allocate adequate land for investors to implement the power generation projects using solid waste. The compensation and support of site clearance shall comply with the current regulations of law on land.

Article 14. Electricity price support for power generation projects using solid waste

1. The electricity Buyer shall buy all power output from power generation projects using solid waste at the buying price at the electricity delivery point (with VAT excluded) as follows:

- For power generation projects by direct burning of solid waste: 2,114 VND / kWh (equivalent to 10.05 UScents / kWh).

- For power generation projects by combustion gas collected from the solid waste landfill: 1,532 VND / kWh (equivalent to 7.28 UScents / kWh).

2. The power generation projects using solid waste applying the electricity selling price under the provisions of Clause 1 of this Article must not apply the supporting mechanism of price for the power output of the project under other current regulations; the electricity buying price is adjusted according to the fluctuation of exchange rate of VND/USD

3. The cost of electricity buying of power generation projects using solid waste shall be calculated and included in the input parameter in the annual electricity selling plan of Vietnam Electricity and be approved by the competent authority;

4. The Ministry of Industry and Trade shall monitor and propose the adjustment of electricity buying price specified in Clause 1 of this Article and report it to the Prime Minister for consideration and decision;

Chapter4.

IMPLEMENTATION ORGANIZATION

Article 15. Responsibilities of the Ministries. sectors and localities for the development of power generation projects using solid waste

1. The Ministry of Industry and Trade shall

a) Guide the contents, order and procedures for formulation, appraisal, approval, adjustment and announcement of Planning and development of power source using solid waste;

b) Organize, guide and coordinate with the provincial People’s Committees to inspect and supervise the implementation of this Decision;

c) Issue the electricity sale contract sample to the power generation projects using solid waste;

d) Formulate and issue or request the competent authorities to issue the national technical regulations on power generation technology using solid waste;

2. Provincial People s Committees shall:

a) Coordinate and support the investors on compensation, site clearance, infrastructure, human resources for investment, implementation and development of power generation projects using solid waste in the area.

b) Assume the prime responsibility for and coordinate with the agencies concerned to issue the unit price of services of collection, transportation and disposal of solid waste generated in the provincial area for payment to the investors of power generation projects using solid waste;

c) Performing the functions of state management at localities for power generation projects using solid waste under the current regulations of law;

Article 16. Effect

1. This Decision takes effect on June 20, 2014;

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, Chairman of People s Committees of provinces and centrally-affiliated cities; Heads of agencies, organizations and units related to the development of power generation projects using solid waste in Vietnam are liable to execute this Decision. /.

The Prime Minister

Nguyen Tan Dung