HANOI (Reuters): Foreign investors may take legal action if Vietnam does not fully pay electricity tariffs agreed with multiple wind and solar projects, according to a document signed by five chambers of commerce seen by Reuters.
The dispute began last year when Vietnam cut previously agreed subsidised prices for electricity from some solar and wind farms, citing irregularities. The move comes as Vietnam's energy sector struggles with higher prices and risks of shortages linked to the conflict in Iran.
Lengthy negotiations with affected investors, who run projects with a combined capacity of 12 gigawatts, failed to produce a compromise, prompting the chambers of commerce in Vietnam from the European Union, Britain, Japan, South Korea and Thailand to send a joint letter to the government on Thursday.
If payment obligations are not met, electricity producers "may seek to enforce remedies, including pursuing dispute resolution in Vietnam or other jurisdictions," said the document, dated March 12.
The letter urges authorities to find an amicable solution to a dispute that the chambers said could lead to defaults and significant losses on multibillion-dollar investments in Vietnam's renewable energy sector.
Vietnam's industry ministry, which received the letter, did not immediately respond to a request for comment.
In recent years, the Southeast Asian country saw a boom in renewable energy investments driven by generous subsidised, or feed-in, tariffs under which the state committed to buying electricity for 20 years at above-market prices.
However, the high tariffs increased losses for state-owned power utility EVN, the sole buyer of the generated electricity, and pushed up power prices for households and factories.
The retroactive change to tariffs, which took effect in January 2025, followed investigations into alleged abuses in accessing the preferential rates.
EVN had no immediate comment.
The letter follows several coordinated actions aimed at persuading Vietnam to change course. These included a document in May signed by 16 affected firms, among them private equity fund Dragon Capital, the Vietnamese subsidiary of Philippines' ACEN energy group, and investors from Thailand, Portugal, the Netherlands, South Korea, Singapore and China.
(Reporting by Khanh Vu. Additional reporting by Phuong Nguyen. Writing by Francesco Guarascio. Editing by Mark Potter) -- Reuters
