Feed-In Tariff

Handbook for
Asian Renewable
Energy Systems
The feed-in tariff (“FIT”) as a policy mechanism to incentivize the
deployment of renewable energy technologies has long been
adopted in the United States and in Europe. Countries in the Asia
Pacific Region have also started to implement FIT schemes and other
kinds of support. This guide provides an overview of renewable
energy policies, including FIT schemes, and discusses the different
incentives and issues involved in foreign investment in renewable
energy projects in various Asia Pacific countries.

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CONTENTS
Australia.............................................................................. 2 Myanmar............................................................................13
China.................................................................................... 3 New Zealand....................................................................14
India...................................................................................... 5 Philippines.........................................................................15
Indonesia............................................................................ 6 Singapore..........................................................................16
Japan.....................................................................................7 Thailand.............................................................................. 17
Korea.................................................................................... 9 Vietnam..............................................................................18
Malaysia..............................................................................10 Contact...............................................................................19
Mongolia............................................................................12

All figures in the FIT tables represent a general estimation of the range of tariff rates collected at the time this handbook is prepared.

1 © 2014 Winston & Strawn

Australia
Summary of Renewable Energy Policies

As a party to the Kyoto Protocol, Australia voluntarily set out The key legislation implementing Australia’s obligations
its target to ensure that 20% of its electricity supply will come under the Kyoto Protocol is currently the Clean Energy Act
from renewable energy by 2020 through its Renewable Energy 2011, which provides for a carbon pricing mechanism. The
Target Scheme. Australian Government has, however, introduced a package of
bills to repeal the legislation and implement the Direct Action
It is predicted in the Energy White Paper 2012 that renewable Plan which builds on the existing carbon farming initiative
energy will make up as much as 40% of Australia’s energy and includes an Emissions Reduction Fund to incentivize
production by 2035. abatement activities.

The Australian Government has made commitments to Key Renewable Energy Target Scheme legislation includes:
implement programs in the year 2014–2015 in support of solar • Renewable Energy (Electricity) Act 2000
energy, including solar PV systems, solar hot water systems and • Renewable Energy (Electricity) (Small-scale Technology
heat pumps. Shortfall Charge) Act 2010
• Renewable Energy (Electricity) (Charge) Act 2000
The Australian Government has established the Clean Energy • Renewable Energy (Electricity) Regulations 2001
Finance Corporation to co-finance and invest, both directly and
indirectly, in clean energy projects.

Restrictions/Incentives on Foreign Investments

The Foreign Acquisitions and Takeovers Act 1975 (the “Act”) All foreign persons should obtain prior approval from the
provides that the Treasurer shall review foreign investment Australian Government before individually acquiring 15% or
proposals in view of Australia’s national interest with the advice jointly with other foreign persons 40% or more of the interests
from the Foreign Investment Review Board. in an Australian business that is valued over AUS$248 million
(approximately US$225.68 million)
All foreign governmental investors and their affiliates must
obtain prior approval from the Australian Government before
making a direct investment.

Feed-in Tariff (FIT)

A feed-in tariff scheme was introduced in Australian Capital The government issued a request for proposals in January 2012
Territory for large-scale solar generation capacity of up to 40 MW. for up to 40 MW of large-scale solar generation capacity.

FIT RATES* Solar Wind Hydropower Biomass

AUD/kWh# 0.186 N/A N/A N/A

USD/kWh 0.17 N/A N/A N/A

*Calculations based on the exchange rate AUD1 = USD0.91 (25 March 2014)
#
Feed-in tariff scheme in Australian Capital Territory only

RELEVANT WEBSITES
Australia’s Foreign Investment Policy – http://www.firb.gov.au/content/_downloads/AFIP_2013.pdf
Australian Renewable Energy Agency – http://arena.gov.au/
Clean Energy Finance Corporation – http://www.cleanenergyfinancecorp.com.au/
Clean Energy Regulator – http://www.cleanenergyregulator.gov.au/Pages/default.aspx
Energy White Paper 2012 – http://www.ret.gov.au/energy/Documents/ewp/2012/Energy_%20White_Paper_2012.pdf

Feed-in Tariff Handbook 2

China
Summary of Renewable Energy Policies

As a signatory to the United Nations Framework Convention Wind energy Wind energy has been a major area of focus in
on Climate Change (“UNFCCC”) and a party which ratified China’s development of renewable energy. China was the
the Kyoto Protocol (while not an Annex I Country), China, the world’s second largest producer of wind power, generating 73
world’s largest energy user, submitted to the UNFCCC its plans TW per hour. In the 12th Five Year Plan for National Strategic
to have 15% of its total primary energy consumption made up Emerging Industries, the Chinese Government announced its
of renewable energy sources by 2020 and reduce its CO2 target to have a generating capacity of 100,000 MW in the year
emission per unit of GDP by 40–45% than 2005 levels. 2015 and to raise the generating capacity to 200,000 MW in
2020. Apart from feed-in tariff schemes, incentives provided
China stated in its 12th Five-Year Plan (2011–2015) for National by the Chinese Government to promote the use of wind power
Economic and Social Development that its renewable energy include a value-added tax rebate of 50% for the sale of electricity
targets by the end of 2015 are as follows: generated from wind power.
• increase the use of renewable energy so that it makes up
11.4% of the national total primary energy consumption; Biomass energy Although the use of biomass energy in China
• reduce energy consumption per unit of GDP by 16% from is relatively insignificant, the Chinese Government targets to
2010 levels; and increase its biomass energy capacity to 13 GW by the end of
• reduce CO2 emission per unit of GDP by 17% from 2010 levels. 2015 from 8 GW in 2011. To achieve the target, the National
Development and Reform Commission (“NDRC”) introduced a
Solar The Chinese Government provides incentives for feed-in tariff scheme to incentivize investment in biomass energy.
solar projects through schemes including the PV Building
Demonstration Program (光伏建筑示范项目), the Golden Sun Key renewable energy legislation includes:
Demonstration Program (金太阳示范工程) and feed-in tariff • Renewable Energy Law (可再生能源法)
schemes. Chinese solar power developers installed a total of • Energy Conservation Law (节约能源法)
12 GW solar power generation capacity in 2013, outperforming • Regulations on the Administration of Renewable Power
the government’s installation goal of 10 GW announced early Energy (可再生能源发电有关管理规定)
in the year. Forecasts are expecting the installation to exceed • Interim Measures on the Pricing of Renewable Power Energy
40 GW by 2014. and the Sharing of Relevant Cost (可再生能源发电价格和费用
分摊管理试行办法)
Hydropower China has a total exploitable hydropower • Interim Regulation on the On-grid Tariff (上网电价管理暂行办法)
resources of 542 million kWm, being the largest in the world.
With abundant hydropower resources of which less than
30% has been utilized, it is expected that China’s targeted
increase in primary renewable energy consumption by 2020
shall be achieved largely by hydropower. It is estimated that
its installed hydropower production capacity will reach 290
million kW by 2015.

Restrictions/Incentives on Foreign Investments

According to the Catalogue of Industries for Guiding Foreign The commonly used investment vehicles in China include joint
Investment (2011 Revision) (外商投资产业指导目录(2011年修訂)), ventures and wholly foreign owned enterprises. The Law of the
foreign investments in the production and supply of renewable People’s Republic of China (“PRC”) on Chinese-Foreign Equity
energy is encouraged under Chinese governmental policies. Joint Ventures (中国人民共和国对中国中外合资经营企业法), the
Law of the PRC on Chinese-Foreign Contractual Joint Ventures
(中华人民共和国中外合作经营企业法) and the Law of the PRC on
Wholly Foreign-Owned Enterprises (中华人民共和国有关外商独
资企业法) governs the setting up of such entities. Entities set up
under such laws are subject to different procedural, ownership,
regulatory and tax requirements.

3 © 2014 Winston & Strawn

Feed-in Tariff (FIT)

Under the Renewable Energy Law, power grid operators rate ranging from RMB0.9 to RMB1.0 per kWh (approximately
are required to purchase energy generated from registered US$0.15–0.16) for solar PV projects in different parts of China.
renewable energy producers at a buying price set by the NDRC.
Hydropower The NDRC recently issued the Notice on Improving
Solar With the issuance of the Notice on Improving the Pricing the Pricing Mechanism for Hydropower Prices (国家发展改革委
Policy for On-Grid Solar Photovoltaic Power Prices (国家发展 关于完善水电上网电价形成机制的通知) in January 2014 raising
改革委关于完善太阳能光伏发电上网电价政策的通知) (the “2011 hydropower tariffs. The notice will apply to hydropower stations
Notice”) by the NDRC, China implemented its first solar feed-in commissioned after 1 February 2014, while the existing tariff
tariff policy in 2011. The feed-in tariff rates under the 2011 Notice rates will be gradually adjusted.
ranged from RMB1.0 to 1.15 per kWh (approximately US$0.16–
0.18 per kWh) depending on the date of approval of the project. Wind In the Notice on Improving the Pricing Policy for On-Grid
Wind Power Prices (国家发展改革委关于完善风力发电上网电价
Since the 2011 Notice did not take into account the intensity of 政策的通知) issued in July 2009, the NDRC divided the country
solar radiation in different areas of China, solar projects focused into 4 wind energy resources areas and provided for a different
on the western part of China, such as Gansu and Qinghai, where feed-in tariff rate ranging from RMB0.51 to RMB0.61 per kWh
the energy demand is not as high due to lower population density (approximately US$0.08–0.10 per kWh) for wind power projects
and level of economic development. To address this problem, the in the different areas.
NDRC issued the Notice on Promoting the Healthy Development
of the Solar PV Industry through the Price Leverage Effect (国家 Biomass The Notice on Improving the Pricing Policy for Biomass
发展改革委关于发挥价格杠杆作用促进光伏产业健康发展的通知) Power Prices (国家发展改革委关于完善农林生物质发电价格政
(the “Revised Feed-in Tariff Policy”) in 2013. 策的通知) issued in July 2010 provides for an unified price of
RMB0.75 per kWh (approximately US$0.12 per kWh) for biomass
The Revised Feed-in Tariff Policy divides the country into 3 power projects.
solar resources areas and provides for a different feed-in tariff

FIT RATES* Solar Wind Hydropower Biomass

RMB/kWh# 0.90–1.00 0.51–0.61 0.21–0.72 0.75

USD/kWh 0.14–0.16 0.08–0.10 0.03–0.12 0.12

*Calculations based on the exchange rate CNY1 = USD0.16256 (25 March 2014)
#
FIT rates in China vary with the location of the site of power generation. The above figures represent a general estimation of the range of tariff rates collected at the
time this handbook is prepared.

RELEVANT WEBSITES
Ministry of Commerce – http://english.mofcom.gov.cn/
National Development and Reform Commission – http://en.ndrc.gov.cn/
National Energy Administration – http://www.nea.gov.cn/

Feed-in Tariff Handbook 4

India
Summary of Renewable Energy Policies

India ratified the UNFCCC in 1993 and the Kyoto Protocol in 2002. Further, the Indian Government decided to reduce the customs
As a non-Annex I country, India has no binding emission targets. levy on imports of machinery, instruments, equipment and
Yet the development of renewable energy is a main focus in India’s appliances used in solar photovoltaic and solar thermal plants to
policy planning. The Ministry of New and Renewable Energy 5% as a further incentive to the development of renewable energy
(“MNRE”) was set up back in 1982 to develop new and renewable in India.
energy to supplement the energy requirements of the country. As
of today, the MNRE has set up the Jawaharlal Nehru National Solar An expert group with respect to low carbon strategies has
Mission in 2010 as part of India’s contribution to the effort in meeting identified the following, among others, as focus areas in the
the challenges of climate change. Twelfth Five-Year Plan:
• national wind energy mission;
The Indian Government has set a goal in its Twelfth Five-Year Plan • national solar energy mission; and
to reduce the emission intensity of GDP by 20% to 25% between • energy efficiency programs in the industries.
2005 and 2020 and doubling its renewable energy capacity with
a 20,000 MW increase in wind capacity and 10,000 MW increase Key renewable energy legislation includes:
in solar capacity by 2017. The plan also specifically recommended • Electricity Act 2003
the setting up of pilot emission trading schemes in the states of Tamil • Energy Conservation Act 2000
Nadu, Maharashtra and Gujarat. • National Action Plan on Climate Change

Restrictions/Incentives on Foreign Investments

The laws in India allow the following forms of foreign investment: without the prior approval either of the Government or the
• incorporation of a company under the Companies Act 1956 as Reserve Bank of India.
a joint venture or a wholly owned company; and
• set up of a liaison office, representative office, project office or All power and energy operators are required to obtain permission
branch office of the foreign company to undertake permitted from various local authorities under the Electricity Act for the
activities under the Foreign Exchange Management following purposes:
Regulations 2000. • transmit electricity;
• distribute electricity; and
Foreign direct investment in the power and energy industry is • engaged in the trading of electricity.
classified to follow the automatic route under the consolidated
Foreign Direct Investment Policy. Such investment is allowed Complete foreign ownerships are allowed in the energy sector
with the exception of power exchanges.

Feed-in Tariff (FIT)

Since 2013, feed-in tariffs for wind, solar photovoltaic, solar thermal, wind, biogas, small-scale hydropower and biomass energy offered
across different regions in India. The Indian Government has set up power purchase tariffs for solar photovoltaic and solar thermal
systems. The preferential tariffs are reviewed annually by the Central Electricity Regulatory Commission.

FIT RATES* Solar Wind Hydropower Biomass

INR/kWh# 8.90^ 5.71 4.42 5.41

USD/kWh 0.15 0.09 0.07 0.09
*Calculations based on the exchange rate INR1 = USD0.16256 (25 March 2014)
#
Feed-in tariff scheme in India differs region by region. The above figures represents the feed-in tariff in West Bengal for FY2014.
^Feed-in tariff only available for solar photovoltaic projects

RELEVANT WEBSITES
Ministry of New and Renewable Energy – www.mnre.gov.in National Hydroelectric Power Corporation – http://www.nhpcindia.com
National Action Plan on Climate Change – http://pmindia.nic.in/climate_change.php Nuclear Power Corporation of India Limited – http://www.npcil.nic.in
India Climate Portal – http://www.indiaclimateportal.org Ministry of Power – www.powermin.nic.in
India Energy Portal – http://www.indiaenergyportal.org/index.php Overseas Indian Facilitation Centre – www.oifc.in/Sectors/Energy/Environment
National Thermal Power Corporation – http://www.ntpc.co.in Central Electricity Authority – http://www.cea.nic.in/welcome.htm

5 © 2014 Winston & Strawn

Indonesia
Summary of Renewable Energy Policies

Indonesia ratified the UNFCCC in 1994 and the Kyoto Protocol Apart from the feed-in tariff scheme (which will be explained
in 2004. As a non-Annex I member, Indonesia has no binding below), the Indonesian Government has also set up power
emission targets. However, the Indonesian Government has purchase tariff for solar photovoltaic systems in 2006 through
committed to increase the use of renewable energy to 25% by its solar auction program as an incentive to achieve its annual
2025. The Indonesian Government has also set out in its Blue solar generation capacity as announced by the Ministry of
Print of National Energy Implementation Program 2005-2025 Energy and Mineral Resources.
the following renewable energy generation capacity targets to
be achieved by 2025: Key renewable energy legislation includes:
• Geothermal energy: 9,500 MW • Electricity Law No. 30 of 2009
• Small-scale hydropower: 500 MW (on-grid); 330 MW (off-grid) • National Energy Policy (Presidential Decree No. 5 of 2006)
• Solar energy: 80 MW • National Biofuel Roadmap
• Biomass energy (for power generation): 810 MW • National Energy Blueprint
• Wind energy: 250 MW (on-grid); 5 MW (off-grid)

Restrictions/Incentives on Foreign Investments

The laws in Indonesia allow foreign investments, in forms of direct • foreign ownership in companies in the business of
ownership or joint venture, by incorporating a limited liability geothermal energy generation, any kind of power generation
company with the Indonesia Investment Coordinating Board. with a capacity in excess of 10 MW or power transmission/
distribution shall not exceed 95%;
Restrictions on foreign direct investment are outlined in • development of small-scale power plant with generation
the presidential decree No. 36 of 2010, which specifies all capacity between 1 MW and 10 MW are required to form a
restrictions in a Negative List. The power and energy industry local partnership with a small enterprise; and
is classified as open with conditions, which such investment is • development of power plant with a generation capacity of
allowed subject to the following limitations: less than 1 MW is restricted (reserved for micro, small, medium
enterprises and cooperatives).

Feed-In Tariff (FIT)

Since June 2012, feed-in tariffs have been offered for electricity generated by biomass, hydropower, municipal solid waste and landfill
gas across different regions in Indonesia. The Ministry of Energy and Mineral Resources has also indicated their interest in setting up
feed-in tariff schemes for energy generated by solar photovoltaic and wind-farm systems.

FIT RATES* Solar Wind Hydropower Biomass

IDR/kWh# N/A N/A 830^ 1,150^

USD/kWh N/A N/A 0.07 0.10

*Calculations based on the exchange rate IDR1 = USD0.00009 (25 March 2014)
#
Feed-in tariff schemes in Indonesia are subject to territorial bonuses, which differs from region to region. This chart shows the feed-in tariff rates in the region of Jawa
and Bali only.
^Average of feed-in tariff for low and medium voltage generators with capacity lower than 10 MW

RELEVANT WEBSITES
Perusahaan Listrik Negara – www.pln.co.id
Pembangkit Jawa-Bali – www.ptpjb.com
Indonesia Power – www.indonesiapower.co.id
Ministry of Energy and Mineral Resources – www.esdm.go.id
Directorate General of Electricity and Energy Utilisation – www.esdm.go.id/directorate-general-ofelectricity-and-energy-utilization
Indonesia Investment Coordination Board – http://www3.bkpm.go.id/contents/home/

Feed-in Tariff Handbook 6

Japan
Summary of Renewable Energy Policies

Japan ratified the UNFCCC in 1993 and the Kyoto Protocol in Apart from the feed-in tariff scheme (which shall be discussed
2002. While it has not signed up to the Doha Amendment to the below), the Japanese Government also introduced the Green
Kyoto Protocol, it has continued its effort in promoting the use New Deal Fund, which promotes the use of renewable energy
of renewable energy. for an implementation period from 2012 to 2017.

Before the Fukushima nuclear disaster in March 2011, Japan was Key renewable energy legislation includes:
heavily reliant on traditional energy sources and nuclear energy, • Act on Promotion of Use of Non-Fossil Fuel Energy Resources
while renewable energy only accounted for around 6% of its and Efficient Use of Fossil Fuel Energy Resources by Energy
total energy consumption. In the wake of the disaster, Japan Suppliers (Act No. 72 of 2009)
has now emerged as an attractive market for the development • Act on Special Measures concerning Procurement of
of renewable energy and, in particular, solar energy, with the Renewable Energy by Operators of Electric Utilities (Act No.
implementation of the feed-in tariff scheme in 2012. 108 of 2011) (the “Renewable Energy Law”)
• Act on Special Measures for the Promotion of New Energy
The Japanese Government estimated that its use of renewable Usage (Act No. 37 of 1997)
energy will increase from 11% in 2010 to 25%–35% in the year
2030 and announced its plans to accelerate the development
and use of renewable energy.

Restrictions/Incentives on Foreign Investments

Foreign investors can construct, operate or own 100% interest While we are not aware of cases where investments in renewable
in energy projects in Japan, subject to notification requirements energy projects were refused, the Japanese Government has
to the Bank of Japan. the right to refuse investments on national security, public safety
and economic grounds.
According to the Foreign Exchange and Foreign Trade Law,
foreign investors are required to give prior notification to the
Minister of Finance and the minister in charge of the relevant
industry of the investment through the Bank of Japan, where it
intends to operate an electricity generating business in Japan
or acquire shares in a company in such business.

Feed-in Tariff (FIT)

The feed-in tariff scheme in Japan, governed by the Renewable While offshore wind energy has been introduced as a new
Energy Law, was introduced in 2012 to boost the use of category of renewable energy in the feed-in tariff scheme for
renewable energy sources in the wake of the Fukushima the financial year starting from 1 April 2014 to 31 March 2015,
nuclear disaster. the feed-in tariff rates for solar energy has been slightly revised
downwards from JPY37.8–38 per kWh (including tax) to JPY
The Renewable Energy Law requires utility operators to 32–37 per kWh (excluding tax).
purchase electricity generated by renewable sources under
contract terms and at the feed-in tariff price set by the Ministry
of Economy, Trade and Industry.

7 © 2014 Winston & Strawn

 FIT RATES* Solar Wind Hydropower Biomass

FY2013 JPY/kWh 37.8–38# 23.1–57.75 25.2–35.7 13.65–40.95

(including tax)
USD/kWh 0.369–0.371 0.226–0.564 0.246–0.349 0.133–0.400
JPY/kWh^ 23.76–59.40 (onshore)
FY2014 (including tax) 34.56–39.96 15.12–36.72 14.04–42.12
38.88 (offshore)
USD/kWh 0.232–0.580 (onshore)
0.338–0.390 0.148–0.359 0.137–0.411
0.380 (offshore)
*Calculations based on the exchange rate JPY1 = USD0.00977 (25 March 2014)
^Calculations based on a tax rate of 8%
#
Solar projects of 10 kW or more for which an application for consultation and grid connection was submitted to the electricity utility covering the project area by 31
March 2013 and which also received approval under the Renewable Energy Law before 31 March 2013 are eligible to enter into power purchase agreements (“PPA”) with
Japanese electricity utilities at a price of JPY42/kWh (approximately USD0.41/kWh ) over a PPA of 20 years.

RELEVANT WEBSITES
Agency for Natural Resources and Energy – http://www.enecho.meti.go.jp/english/index.htm
Minister of Ministry of Economy Trade and Industry of Japan – http://www.meti.go.jp/english/
Ministry of Environment – https://www.env.go.jp/en/
Japan External Trade Organization – http://www.jetro.go.jp/

Feed-in Tariff Handbook 8

Korea
Summary of Renewable Energy Policies

Korea relies largely on energy imports (about 97% of its energy In its Five-Year Plan for Green Growth implemented in 2009,
consumption is generated from energy imports) and only a small Korea announced its plans to develop a nationwide smart grid
portion of its energy generation comes from renewable energy system by 2030. The smart grid system is a systematic network
sources. which helps to enhance efficiency in the management of power
production and distribution. Korea’s smart grid project can be
President Lee Myung-bak, however, declared at the 60th divided into the following main areas:
anniversary of the founding of the Republic of Korea in 2008 • Smart Power Grid
that “Low Carbon Green Growth” is the way forward for the • Smart Place
country in the next 60 years. • Smart Transportation
• Smart Renewable
As a signatory to the UNFCCC and the Kyoto Protocol (while • Smart Electricity Service
not an Annex I country), Korea voluntarily presented a mid-term
reduction target to reduce its greenhouse gas emission by 30% Key renewable energy legislation includes:
from its 1990 levels by 2020 and raise its use of renewable • Basic Law on Low Carbon Green Energy 2010
energy to 11% of its energy supplies by 2030. • Promotion Act on Development, Use, Deployment of New
and Renewable Energy 2010
In view of its targets, the Korean Government intends to invest
₩107 trillion (approximately US$98,643 million) in the period
from 2009 to 2013 to implement green growth plans to reduce
greenhouse gas emission.

Restrictions/Incentives on Foreign Investments

The Foreign Investment Promotion Act (the “Act”) was enacted The Korean Government provides incentives, including the
in 1998 to promote foreign direct investments in Korea. The Act, provision of tax support to foreign investments which meet
however, prohibits foreign investments in certain businesses certain criteria. Certain benefits are also applicable in special
(Unpermitted business) and foreign investments in certain investment promotion zones.
businesses are subject to specific standards of permission
(“Restricted Business”). Power generation, transmission and
distribution falls under the category of Restricted Business under
the Act. Foreign companies are permitted to engage in power
generation only if the sum of power plant facilities purchased by
the foreign entity from Korea Electric Power Corporation does
not exceed 30% of the total domestic power plant facilities.

Feed-in Tariff

Korea’s feed-in tariff scheme was replaced in 2012 by a The feed-in tariff scheme was, however, reintroduced in Seoul
Renewable Portfolio Standard Scheme which requires certain in 2013. The Seoul Metropolitan Government introduced a new
portion of power generated by power producers (companies subsidy scheme, subsidizing the installation of small solar power
with power facilities greater than 500 MW) to be produced from plants with output of 50 kW or less.
renewable sources.

RELEVANT WEBSITES
Ministry of Trade, Industry and Energy – http://www.mke.go.kr/language/eng/
Green Growth Korea – http://www.greengrowth.go.kr/english/
Korea Smart Grid Institute – http://www.smartgrid.or.kr/eng.htm
Korea Energy Management Corporation – http://www.kemco.or.kr/new_eng/main/main.asp
Korea Trade-Investment Promotion Agency – http://english.kotra.or.kr/
Invest Korea – http://www.investkorea.org/ikwork/iko/eng/main/index.jsp

9 © 2014 Winston & Strawn

Malaysia
Summary of Renewable Energy Policies

Malaysia ratified the UNFCCC in 1994 and the Kyoto Protocol Apart from feed-in tariff schemes, the Malaysian Government
in 2002. As a signatory to the UNFCCC and the Kyoto Protocol provides the following fiscal incentives to companies generating
(while not an Annex I country), Malaysia has voluntarily presented renewable energies:
its target to increase the use of renewable energy. (i) pioneer status with tax exemption on all statutory income for
10 years; OR
It has stated in its Tenth Malaysia Plan (2011-2015) that it will (ii) 100% investment tax allowance on qualifying capital
create stronger incentives for investments in renewable energy, expenditure incurred within 5 years; and
so that renewable energy will make up 5.5% of the total energy (iii) exemption from import duty and sales tax on equipment
generation mix in 2015 as compared to less than 1% in 2012. used purchased overseas and sales tax exemption on
equipment purchased locally.
The Malaysian Government stated its target to increase the
portion of renewable energy to 11% of the total electricity Further, the Malaysian Government has set up a Green
generated by 2030 in its National Renewable Energy Policy and Technology Fund to improve the supply and utilization of
Action Plan in 2009. green technologies. The Malaysian Government will bear 2% of
the interest/profit rate and provide a partial guarantee to the
The Malaysian Government has also announced the following financing of the projects.
renewable energy generation capacity targets to be achieved
by 2050: Key renewable energy legislation includes:
• Solar photovoltaic: 8,874 MW • National Renewable Energy Policy and Action Plan
• Small-scale hydropower: 490 MW • Renewable Energy Act 2011 (the “Renewable Energy Act”)
• Biogas: 1,340 MW • Renewable Energy (Feed-in Approval and Feed-in Tariff Rate)
• Biomass: 410 MW Rules 2011
• Solid waste: 430 MW • Sustainable Energy Development Authority Act 2011

Restrictions/Incentives on Foreign Investments

Foreign investment regulations in Malaysia have undergone a The National Renewable Energy Policy & Action Plan 2009 has
revamp, resulting in the removal of the Guidelines of the Foreign made clear that the feed-in tariff scheme is aimed at promoting
Investment Committee which originally governed all foreign local sustainable socioeconomic development. As such, certain
acquisitions in Malaysia. restrictions apply to foreign investments. While foreign person of
the age of 21 years or above can apply for an approval for feed-
in tariff for a solar technology renewable energy installation, the
installed capacity of the installation should be no more than 72
kW. Malaysian incorporated companies can apply for feed-in
tariff approvals provided that its portion of foreign ownership
is no more than 49% of the voting power or the issued share
capital of the company.

(Continued on the next page)

Feed-in Tariff Handbook 10

Malaysia (continued)

Feed-in Tariff (FIT)

The feed-in tariff scheme adopted in Malaysia since 1 December Not only is the country actively supporting the development of
2011 is governed by the Renewable Energy Law. The Sustainable large-scale renewable projects, it has been encouraging homes
Energy Development Authority (“SEDA”), under the Ministry to take part in the country’s clean energy initiative. SEDA has been
of Energy, Green Technology and Water is the statutory body cooperating with banks to provide financing options to homes. As
empowered under the Sustainable Energy Development Authority at the end of April 2013, which is about slightly after one year of
Act 2011 to oversee the operation of the feed-in tariff scheme. the implementation of the scheme, SEDA has issued 1,297 feed-in
tariff approvals to individuals, making up a total energy generation
The scheme obliges electricity distributors to purchase energy capacity of 14.63 MW.
generated from indigenous renewable sources from feed-in tariff
approved holders at the feed-in tariff rate for a specified period of
time. Currently renewable resources including solar photovoltaic,
small hydropower, biomass and biogas are eligible for feed-in tariff.
The renewable resources should be sourced within the country
and should not be imported.

FIT RATES*# Solar Wind Hydropower Biomass

MYR/kWh 0.54–1.13 N/A 0.24^ 0.27–0.31^

USD/kWh 0.16–0.34 N/A 0.07 0.08–0.09
*Calculations based on the exchange rate MYR1 = USD0.30263 (25 March 2014)
#
FIT schemes in Malaysia are subject to incentive bonuses. The FIT rates do not include any incentives. The above figures are rates applicable to non-individuals.
^The FIT is capped at a generation capacity of 30 MW.

RELEVANT WEBSITES
Attorney General’s Chambers of Malaysia – http://www.agc.gov.my/
Bank Negara Malaysia (Central Bank of Malaysia) – www.bnm.gov.my
Companies Commission of Malaysia – http://www.ssm.com.my/
Malaysian Investment Development Authority – http://www.mida.gov.my
Ministry of Energy, Green Technology and Water – http://www.kettha.gov.my/en
Ministry of International Trade and Industry – http://www.miti.gov.my/
Securities Commission Malaysia – www.sc.com.my
Sustainable Energy Development Authority – http://seda.gov.my/

11 © 2014 Winston & Strawn

Mongolia
Summary of Renewable Energy Policies

As a signatory to the UNFCCC and a party which acceded to The Law of Mongolia on Renewable Energy (the “Renewable
the Kyoto Protocol (while not an Annex I country), Mongolia Energy Law”) regulates the generation and use of energy
voluntarily stated in its National Renewable Energy Programme in Mongolia with respect to, interalia, renewable energy and
for the period 2005–2020 that it aims to produce 20–25% of its provides for feed-in tariff rates and mechanism. The programme
energy from renewable sources by 2020. shall be funded by the Mongolian Government, international
funds, foreign and domestic investments, foreign and domestic
One of the main focus of the National Renewable Energy loans, donations and grants, and the reinjection of income
Programme for 2005–2020 is to facilitate the wider use generated from the programme.
of renewable energy in Mongolia through price and tariff
mechanisms to support the sale of electricity generated by Key renewable energy legislation includes:
renewable sources. • Law of Mongolia on Energy
• Law of Mongolia on Renewable Energy

Restrictions/Incentives on Foreign Investments

New Investment Law The New Investment Law (the “Investment The Mongolian Government offers both financial and non-
Law”) in Mongolia was implemented on 1 November 2013 with financial investments to promote investment in Mongolia.
an aim to attract foreign direct investments and boost domestic
investment. The Investment Law relaxed prior restrictions on Tax Incentives Tax incentives offered to investors include
foreign investments and streamlined the registration process. tax exemption, preferential tax treatment, accelerated rate of
depreciation and amortization, carrying forward of losses and
The Investment Law also provides that the Mongolian deduction of expenses for training of employees from taxable
government may enter into an investment agreement with income … etc. To ensure long term preferential tax treatment,
investors investing more than MNT500 billion (approximately investors may apply for a tax stabilization certificate from the
US$283 million) in Mongolia, undertaking to stabilize the Investment Agency where the investment meets the criteria for
environment of the business. issuance. In the alternative, they may enter into an investment
agreement with the government.
Foreign investors may now invest in any industry in Mongolia
without prior government approval. The exception is that prior Law on Concession A major factor curtailing investments
approval from the Invest Mongolia Agency (the “Investment in Mongolia is its lack of infrastructural support to business
Agency”) is required where foreign state-owned enterprises set up. The Law on Concession implemented in 2010 aims to
(entity of which 50% of its issued shares held directly or indirectly grant concessions to private investors to use infrastructural
by a foreign state) invest in over 33% of an entity in the minerals, facilities owned by the state and approve the construction of
media, communications and financial industry. infrastructural facilities under the concession model and provide
such services to the public.
Assurance The Investment Law assures investments in Mongolia
are protected from nationalization and the right to repatriate
profits and intellectual property rights are protected.

Feed-in Tariff (FIT)

The Renewable Energy Law adopted in 2007 sets forth the feed-in tariff framework and rates with relatively generous rates for solar
energy. A major achievement in Mongolia’s implementation of the feed-in tariff scheme is the execution of the first long term power
purchase agreement signed between the Central Regional Transmission Network, a state-owned company and Newcom Company
Limited, an investment holding conglomerate in Mongolia.

FIT RATES* Solar Wind Hydropower Biomass

MNT/kWh N/A N/A N/A N/A
USD/kWh 0.15–0.18 0.08–0.095 0.045–0.06 N/A
*Calculations based on the exchange rate MNT1 = USD0.00057 (25 March 2014)

RELEVANT WEBSITES
Ministry of Energy – http://www.energy.gov.mm/ National Renewable Energy Centre – http://www.nrec.mn/en/
Ministry of Economic Development – http://www.med.gov.mn/mn/# Invest Mongolia Agency – http://investmongolia.com/ Feed-in Tariff Handbook 12
Myanmar
Summary of Renewable Energy Policies

Myanmar is a signatory to the UNFCCC and a party which also started a community-based scheme supplying solar lamps
acceded to the Kyoto Protocol (while not an Annex I Country). to unelectrified rural areas.

As an ASEAN member country, Myanmar has committed that Myanmar’s current energy policy aims to:
at least 10% of its energy shall be produced from renewable • maintain independence in its energy supply;
sources by 2015. It targets to produce 15–20% of its energy by • increase the use of renewable energy sources;
renewable sources by 2020. • improve energy efficiency and conservation; and
• promote the use of alternative fuels in households.
Despite Myanmar’s abundant potential for renewable energy
development, vast areas of its territories remain to be electrified and With the establishment of a National Energy Management
only its hydropower capacities have been exploited commercially. Committee which aims to formulate the national energy policy
Other forms of renewable energy sources, such as solar, wind, including laying down long-term and short-term energy targets
biomass and geothermal energy are still at the development stage. and encouraging investments in energy development, Myanmar
is currently in the process of drafting a new national energy
While hydropower remains to dominate the portion of policy.
renewable energy sources, Myanmar has been entering
into plans in cooperation with neighboring Asian countries The Myanmar Government has indicated that it will further
to develop its solar potentials. The Ministry of Energy of the promote the use of renewable energy and further liberalize the
Myanmar Government has entered into a memorandum of energy market through the abolishment of the energy blanket
understanding with Green Earth Power Co., Ltd. from Thailand subsidy scheme and the adoption of appropriate taxes.
in relation to the construction of a 210 MW solar power plant.
Apart from large scale projects, the Myanmar Government has There are currently no renewable energy laws in Myanmar.

Restrictions/Incentives on Foreign Investments

Foreign investments in Myanmar has long been impeded as • tax relief on income tax;
a result of its isolation due to political reasons. The isolated • tax deductions for investments in research and development
economy has recently opened to the rest of the world, attracting • tax exemptions on profits from exports (up to 50%); and
investors from abroad. The power sector has since then been a • exemption from custom duties on capital assets and raw
major area of foreign investment in the country. materials.

Foreign Investment Law The Myanmar Foreign Investment Law Assurance The Foreign Investment Law reassures that foreign
was passed on 2 November 2012 and the Investment Rules investments will not be nationalized during the contract period
implemented on 31 January 2013 sets out the list of business nor terminated without adequate reasons. It also guarantees
activities which foreigners are allowed to engage in and the that remittance of profits from investments shall be made in the
regulations and restrictions to such investments. same foreign currency as it was invested.

Generally speaking, foreign investors are not allowed to engage Floatation of Currency With the Foreign Exchange Management
in activities against the interest of the country and activities Law enacted on 10 August 2012 abolishing the foreign exchange
explicitly restricted to Myanmar citizens. controls in place since 1947, the Myanmar Kyat was floated in
April 2012. Although the currency is still not convertible nor
Tax incentives granted to foreign investments include the negotiable outside of the country, its floatation facilitated the
following: repatriation of profits (subject to prior approval of the Myanmar
• tax holiday of 5 years; Investment Commission and its Foreign Exchange Regulations)
• tax exemption for profits re-invested within 1 year; and has been broadly favorable to foreign investments.

Feed-in Tariff

Despite its various efforts in promoting the use of renewable RELEVANT WEBSITES
energy and foreign investment, the Myanmar Government Ministry of Energy – http://www.energy.gov.mm/
Ministry of Electric Power – http://www.modins.net/myanmarinfo/
currently has no plans for a feed-in tariff scheme.
ministry/electric.htm

13 © 2014 Winston & Strawn

New Zealand
Summary of Renewable Energy Policies

Renewable energy plays a major part in New Zealand’s • Unconditional Target Reduction of greenhouse gas emission
electricity generation and the government continues its efforts by 5% below its 1990 emission levels by 2020;
in increasing its usage. New Zealand generated 37% of its • Conditional Target Reduction of greenhouse gas emission by
primary energy supply from renewable resources in 2012, 10–20% below its 1990 emission levels by 2020, conditional
ranking third among OECD countries. upon the execution of a comprehensive global agreement; and
• Long-term Target Reduction of greenhouse gas emission by
According to the New Zealand Energy Strategy 2011–2021 50% below its 1990 emission levels by 2050.
(the “Energy Strategy”), it aims to have 90% of its electricity
generated from renewable sources by 2025. The New Zealand In view of its obligations under the Kyoto Protocol and its
Energy Efficiency and Conservation Strategy 2011–2016, written other commitments, New Zealand has implemented the New
as a companion document to the Energy Strategy, sets out interim Zealand Emissions Trading Scheme since 2008 to incentivize
targets to give effect to the Energy Strategy. The need for new green technology and emission reduction. The carbon pricing
renewable energy generation is also recognized in the National mechanism enhances competitiveness of renewable energy as
Policy Statement for Renewable Electricity Generation 2011. compared to other energy sources.

New Zealand ratified the UNFCCC in 1993 and the Kyoto Protocol Key renewable energy legislation includes:
in 2002. While it has not signed up to the Doha Amendment • Energy Efficiency and Conservation Act 2000
to the Kyoto Protocol, it has announced that it will continue its • Climate Change Response Act 2002
climate change efforts through the UNFCCC and has presented
the following emission targets:

Restrictions/Incentives on Foreign Investments

Pursuant to the Overseas Investment Act 2005 (the “Act”), the The Act lists out the criteria for consent for overseas investments
Overseas Investment Office may need to review the following in sensitive land, including the financial commitment to the
types of foreign investment proposals in New Zealand: investment and the benefit that the investment will likely bring
• investment in sensitive land (including non-urban land to New Zealand. Where non-urban land exceeding 5 hectares
exceeding 5 hectares in area) is involved, the investment should produce substantial and
• investment in business assets of the value above NZ$100 identifiable benefit.
million (approximately US$85,432,000)

RELEVANT WEBSITES

Ministry for the Environment – http://www.mfe.govt.nz/index.html

Electricity Authority – http://www.ea.govt.nz/
New Zealand Energy Strategy 2011–2021 – http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-strategies/nz-energy-
strategy-lr.pdf
Energy Efficiency and Conservation Authority – http://www.eeca.govt.nz/
National Policy Statement for Renewable Electricity Generation 2011 – http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/
energy-strategies/nz-energy-strategy-lr.pdf
New Zealand’s emissions trading scheme – http://www.climatechange.govt.nz/
Energy in New Zealand 2013 – http://www.med.govt.nz/sectors-industries/energy/energy-modelling/publications/energy-in-new-zealand-2013/
Energy-in-New-Zealand-2013.pdf
New Zealand’s Foreign Investment Policy – http://www.linz.govt.nz/overseas-investment

Feed-in Tariff Handbook 14

Philippines
Summary of Renewable Energy Policies

As a signatory to the UNFCCC and the Kyoto Protocol (while not Holding the largest potential for wind energy among all
an Annex I Country), the Philippines announced its commitment to Southeast Asian countries, it aims to become the largest wind
the development and use of renewable energy resources in the energy producer in the area.
Renewable Energy Act of 2008 and sought to achieve its targets
by the National Renewable Energy Program (2011–2030) (“NREP”). The Renewable Energy Act of 2008 (the “Renewable Energy
Act”) provides for, interalia, the following renewable energy
The NREP targets to triple the country’s renewable energy incentives (subject to certification by the Department of Energy):
generation capacity to 15,304 MW by the 2030. • Income tax holiday of 7 years
• Corporate tax rate of 10% on its net taxable income after the
The Philippines has been developing and using hydropower income tax holiday
and geothermal power early in the 1950s. • Duty free importation machinery, equipment and materials in
• To date, hydropower is the main source of renewable relation to renewable energy
energy used in the country and the NREP intends to have its • 0% value-added tax rate on the sale of power generated
hydropower capacity increased by 160% by the year 2030. • Tax emption from carbon credits
• The Philippines is currently the world’s second-largest
geothermal energy producer and it is intended that its Key renewable energy legislation includes:
geothermal capacity will increase by 75% by 2030 under • Renewable Energy Act of 2008
the NREP. It aims to become the world’s largest geothermal • Climate Change Act
energy producer. • Biofuels Act

Restrictions/Incentives on Foreign Investments

The Foreign Investment Act provides that the Philippines limited to 40%. This has been a major deterring factor to foreign
Government shall publish the Foreign Investment Negative List, investment in the Philippines.
which sets out industries in which foreign investments should
be restricted or limited. It should, however, be noted that it is provided in the Renewable
Energy Law that the renewable energy sector will continue to
Foreign investments in the (i) exploration, development and be listed as one of the priority areas of activities under the
utilization of natural resources, (ii) ownership of private lands Investment Priority Plan qualifying for investment incentives.
and the (iii) operation and management of public utilities are

Feed-In Tariff (FIT)

The Renewable Energy Act governs the feed-in tariff scheme in feed-in tariff rates were confirmed. The first solar power plant under
the Philippines. Section 7 of the act requires that a feed-in tariff the feed-in tariff scheme is expected to be completed in 2014.
scheme to be set up for wind, solar, ocean, hydropower and
biomass energy. The Philippines Government has issued the “Guidelines for the
Selection Process of Renewable Energy Projects under the Feed-in
Its implementation, however, has suffered significant delay due to Tariff System and the Award of Certificate for Feed-in Tariff Eligibility”
free market economist groups. It was not until July 2012 that the first laying down the selection basis for renewable energy projects.

FIT RATES* Solar Wind Hydropower Biomass

PHP/kWh 9.68 8.53 5.90 6.63

USD/kWh 0.22 0.19 0.13 0.15

*Calculations based on the exchange rate PHP1 = USD0.02213 (25 March 2014)

RELEVANT WEBSITES
Department of Energy – http://www.doe.gov.ph/
Energy Regulatory Commission – http://www.erc.gov.ph/
Climate Change Commission – http://climate.gov.ph/
Department of Trade & Industry Philippines – http://wp.investphilippines.org.uk/

15 © 2014 Winston & Strawn

Singapore
Summary of Renewable Energy Policies

Renewable energy currently accounts for less than 10% of The National Climate Change Strategy 2012 sets down
the electricity generated in Singapore. However, the country Singapore’s greenhouse gas emission reduction targets and
has promising future in developing solar energy due to its strategies. Singapore has committed to increase the energy
geographical location. As of 2011, there are a total of 120 efficiency by 20% by 2020 and 35% by 2030 as compared to
commercial solar photovoltaic installations connected to the its 2005 levels. It aims to achieve the targets by ensuring the
energy grid in Singapore, generating a total peak capacity of competitiveness of energy pricing, supporting green economy,
5.6 MW. Renewable energy has been identified as a key area of enhancing energy efficiency, improving infrastructure and
development and its government aims that the industry is able diversifying sources of energy generation.
to contribute S$3.4 billion to its GDP by the year 2015.
Although Singapore currently does not have a carbon pricing
The Sustainable Singapore Blueprint (the “Blueprint”) mechanism, Prime Minister Lee Hsien Loong has openly noted
developed by the Inter-Ministerial Committee on Sustainable the need for a market mechanism to accurately reflect the costs
Development sets forth Singapore’s renewable targets. It is of consumption decisions and thereby affecting consumer
stated in the Blue print that the Singaporean Government, in behaviour.
view of the envisaged future use of solar energy in a larger scale,
intends to further develop its solar energy capability through Key renewable energy legislation includes:
investments in related research and development initiatives. • Energy Conservation Act 2012

Singapore ratified the UNFCCC in 1997 and the Kyoto Protocol

in 2007. Not being an Annex I country, Singapore has no binding
emission targets. However, it announced its aim to reduce
greenhouse gas emission by 7–11% below business as usual
levels (“BAU Levels”) in 2020 as compared to levels in 2005.
Contingent upon the entering into of a legally binding emission
reduction agreement between all countries, it agreed to pledge
to achieve a 16% reduction below BAU Levels in 2020.

Restrictions/Incentives on Foreign Investments

Singapore is renowned for its aggressiveness in attracting foreign investments. There are few limitations to entering the Singaporean
market except for media, broadcasting, legal, financial services and property ownership.

RELEVANT WEBSITES
National Climate Change Secretariat – http://app.nccs.gov.sg
Energy Efficient Programme Office – http://app.e2singapore.gov.sg/
Energy Market Authority – http://www.ema.gov.sg
National Environment Agency – www.nea.gov.sg
Sustainable Singapore – http://app.mewr.gov.sg
Ministry of Trade and Industry–http://www.mti.gov.sg
Singapore Economic Development Board – http://www.edb.gov.sg/content/edb/en/why-singapore/ready-to-invest/incentives-for-businesses.html

Feed-in Tariff Handbook 16

Thailand
Summary of Renewable Energy Policies

As a signatory to the UNFCCC and the Kyoto Protocol (while One of the major area of development in renewable energy is
not an Annex I Country), Thailand has voluntarily presented its solar energy, which is expected to triple by 2022, making up
target to increase the use of renewable energy. a quarter of the country’s energy mix. In view of its targeted
increase in solar power capacity, the Thai Government
According to the Renewable and Alternative Energy Development commenced a programme in September 2013 purchasing
Plan (2012–2021) (“AEDP”), the Thai Government targets to solar power from households and factories which installed
increase renewable energy consumption by 25% by the end solar photovoltaic panels for a price of nearly seven baht
of 2021. This figure represents an upward adjustment from the (approximately US$0.22 per kWh), which is significantly higher
targeted 20.3% renewable energy consumption increase by the than the price for traditional energy sources of four baht
end of 2021 as set out in the Renewable Energy Development Plan (approximately US$0.12 per kWh).
(2008–2022) (“REDP”), which was subsequently superseded by
the AEDP target. The Thailand Board of Investment (the “Board of Investment”)
provides a special tax incentive, including exemption or
To achieve the country’s target to increase the use of renewable reduction of corporate income tax and import duties on
energy to 25% of its total energy production in 10 years, the machinery and raw materials, under the Investment Policy for
11th National and Social Development Plan places significant Sustainable Development Campaign for Renewable Energy
emphasis on green growth. Projects.

The target will be achieved with an increased use of renewable Key renewable energy legislation includes:
energy, with the predicted output of biomass energy being • Environmental Fiscal Act
4,800 MW, biogas energy being 3,600 MW, solar energy being • Energy Conservation Promotion Act
3,000 MW, wind energy being 1,800 MW while the remaining • Energy Development and Promotion Act
increase being achieved by hydropower and waste. • National Energy Policy Act

Restrictions/Incentives on Foreign Investments

Foreign investments in Thailand are regulated by the Foreign In reviewing the applications for Foreign Business Licences, the
Business Act of 1999, which categorizes activities into 3 lists. Ministry of Commerce of Thailand makes their decision in view of
• List 1–Foreign investment prohibited the impact of the foreign investment on the following areas:
• List 2–Prior Cabinet approval required • national safety and security;
• List 3–Foreign Business Licence required • economic and social development;
• public order, good morals, art, culture and traditions;
• natural resources, conservation, energy and environment,
consumer protection, size of the enterprises, employment; and
• technology transfer and research and development.

Feed-In Tariff (FIT)

Thailand introduced the feed-in tariff scheme in 2007. It is also called the adder scheme since the tariff is added to the base electricity
price, totaling the market price of the power generated and sold to the grid.

FIT RATES* Solar Wind Hydropower Biomass

THB/kWh 6.5 3.5–4.5 0.8–1.5 0.3–0.5

USD/kWh 0.20 0.11–1.14 0.02–0.05 0.01–0.02

*Calculations based on the exchange rate THB1 = USD0.03077 (25 March 2014)

RELEVANT WEBSITES
Electricity Generating Authority of Thailand – http://www.egat.co.th/en/ Department of Alternative Energy Development and Efficiency –
Metropolitan Electricity Authority – http://www.mea.or.th/ http://www.dede.go.th/dede/
Provincial Electricity Authority – https://www.pea.co.th/EN/ Thailand Board of Investment – http://www.boi.go.th/index.
SitePages/home.aspx php?page=intro&language=en

17 © 2014 Winston & Strawn

Vietnam
Summary of Renewable Energy Policies

Vietnam ratified the UNFCCC in 1994 and the Kyoto Protocol in While there are no formal renewable energy acts or regulations,
2002. Not being an Annex I country, Vietnam has no binding the following decrees/decisions provide guidance on the
emission target. However, the government targets to cut its development of renewable energy:
greenhouse gas emission per unit of GDP by 8–10% below 2010 • Circular 32/2012/TT-BTC
levels by 2020. Vietnam has approved its carbon trading plans • Decision 37/2011/QD-TTg
and carbon trading is expected to commence in 2020. • Decision 1208/2011/QD-TTg
• Decree 04/2009/ND-CP
The Vietnamese Government is keen to develop renewable • Joint circular 58/2008/TTLT-BTC-BTN&MT
energy. Through their National Power Development Plan for the • Decision 1855/2007/QD-TTg
Period 2011–2020, the Vietnamese Government announced its • Electricity Law 28/2004/QG11
plans to increase the installed capacity of wind and biomass
energy to 1,000 MW and 500 MW respectively by 2020. The
World Bank initiated a credit line of US$249 million for the
development of renewable energy sources in Vietnam in
December 2013.

Restrictions/Incentives on Foreign Investments

Main forms of foreign direct investment under the Investment Foreign investors must submit their investment projects to the
Law of 2005 (the “Investment Law”) are as follows: local authorities with the proposed expenditure of medium and
• wholly owned companies; long term capital in order to carry out an investment activity in a
• joint venture between domestic and foreign investors; specific region for a specific duration for their approval.
• business cooperation contracts;
• capital contribution for management of a company; and The renewable energy industry is one of the inventive
• mergers and acquisitions. investment sectors under the Investment Law and enjoys the
following benefits:
Foreign investors may also, under certain restrictions, indirectly • tax incentives;
invest by buying securities or investing through financial • land use incentives;
intermediaries. • accelerated depreciation on fixed assets; and
• carry forward of tax losses for 5 years.

Feed-In Tariff (FIT)

The feed-in tariff scheme in Vietnam was introduced in June 2011, stating the price payable by the state power company, Vietnam
Electricity, for wind energy purchases. There are no feed-in tariffs for other renewable energy sources.

FIT RATES* Solar Wind Hydropower Biomass

VND/kWh N/A 1,614 N/A N/A

USD/kWh N/A 0.08 N/A N/A

*Calculations based on the exchange rate VND1 = USD 0.00005 (25 March 2014)

RELEVANT WEBSITES
Vietnam Electricity – http://www.evn.com.vn/Home/tabid/41/language/vi-VN/Default.aspx
Ministry of Industry and Trade – http://www.moit.gov.vn/web/guest/home
Vietnam’s Investment Policy – http://www.vietnamlaws.com/freelaws/Lw59na29Nov05CIL%5B10Apr06%5D.pdf

Feed-in Tariff Handbook 18

Contact
RANKINGS &
RECOGNITION
Chambers USA 2013
Award for Excellence for Client
Marco Pocci Service: Energy Projects – Power
Partner, Hong Kong Including Renewables
+852-2292 2151
mpocci@winston.com U.S. World & News Report’s “Best Law Firms” 2014
• Ranked as National Tier 1 for Energy Law
Marco Pocci is a partner in Winston & Strawn’s Energy Group.
He is a Registered Foreign Lawyer in the Hong Kong office. Chambers USA 2013
Mr. Pocci is a dual UK/Italian qualified lawyer. • Projects: Renewables and Alternative Energy — National
• Energy: Electricity, Regulatory and Litigation — National
Mr. Pocci specializes in representing energy and
• Energy: Nuclear, Regulatory and Litigation — National
infrastructure clients all over Asia and the rest of the world
in a wide range of issues, including regulatory and general • Energy: State Regulatory and Litigation — California
counseling; the negotiation of contracts and agreements
Legal 500 U.S. 2013
related to project development, financing and construction,
• Energy — Litigation
among others.
• Energy — Regulatory
Mr. Pocci has represented a wide diversity of players in • Energy — Renewable/Alternative
the energy industry ranging from utilities, independent
Legal 500 EMEA Edition 2013
power producers, energy cooperatives, project developers,
financiers, and power purchasers, to manufacturers, oil and • Project Finance and Energy — Energy (Paris)

gas companies, retailers, contractors, lenders, borrowers,

Legal 500 (UK) 2013
investors, traders, and governments, among others.
• Projects, Energy, and Natural Resources —
Oil and Gas (London)
Mr. Pocci’s energy experience extends to virtually all types
of energy projects, including conventional fossil-fueled, Financial Times U.S. Innovative Lawyers 2012
gas- and coal-fired, combined-heat-and-power, renewable • Received a highly recommended ranking and was
and alternative energy (especially wind, solar, biomass and lauded for devising a legal structure that helps create
geothermal). a new approach to the development and operation of
combined-heat-and-power facilities in California

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