Ep 16 Vietnam PDP8 at last with Giles Cooper

SEAP 16 Vietnam PDP8 with Giles

Intro

Yiou: Giles. Welcome to Sustainable Energy Asia podcast. you have an extensive experience in Vietnam. I think it's more than 20 years. Right. So, what brought you to the country and why you decided to settle in Vietnam?

Giles: Oh, thank you very much. It's a pleasure to join you here today. indeed, I have lived and worked in Vietnam for nearly 23 years. It's been a fascinating ride. I first came here pretty much by accident. In fact, I'm a New Zealand lawyer. I had a job lined up in London. And I stopped here on the way to visit a very dear old friend of mine who was working here. And before too long, I had a job offer because there was a need for people to get involved in a power project. In fact, Vietnam's first build, operate, transfer, thermal power project, the three project. So I was brought on at Baker Mackenzie. Back in 1999 to support on that project. and, things just, developed from there. I never took the flight to England and continued to work in Vietnam. And I've been at three firms in that time. I joined Alan's. two years ago, and I'm the managing partner of the Hanoi office of Allen's.

And we focus mainly infrastructure matters. This office.

Ben: We are really excited to be with you and to speak about, uh, Approval of the PDP eights. When I start working on Vietnam, everyone was already saying the PDP eight will be published in a couple of months.

And now the publication is something I think really exciting for a lot of people. Vietnam is a really interesting country in Southeast Asia. It has the highest growth expectation for the coming years above 6%, which mean that the power demand will actually also grow with this trend.

 It's a single buyer market with a local utility and unfortunately right now it's still a cold centric, grid that is in Vietnam. But Vietnam has really a compelling story because they have added, Between 2019 and 20 21, 23 gigawatt of renewables.

 A bit less than 20 gigawatt was solar. And that was really on the back of the feeding tariff, for solar and wind, which have ended in 2020 and 2021. So the PD DP really puts the development back on track because after the end of the feeding tariff for developer, it was really difficult to see what's coming next.

And we start to see a way to move forward with the publication and the approval of the PDP eight. But I think as a start, can you just introduce, what are the power development plan in Vietnam and why is there so much excitement about the publication of the PDP8 and the approval?

Giles: Yes, certainly. Power Development Masterplan is part of a system of, sectoral master plans that the government sets., there are master plans for all sorts of sectors, resources roads, airports, power Cetera, et cetera. And they're the, at once, both a kind of historical hangover from, communist party central planning, policies but also still a contemporary means of plannings as the development of sectors across the country.

Historically, national master plan were very rigid documents where it was set out exactly what would be produced, what would be built, in any given period. they typically are each 10 year master plans and they have a vision that looks ahead for another 15 or so years. So I say they're still contemporary because current law still mandates that developments whatever sort of projects they are. And in this case, the power sector. Cannot be developed, cannot happen unless they're consistent with the master plan. And historically, as I mentioned being consistent was very specific.

They had to be specific projects included in a master plan before they could be developed. It is now a little bit more. Flexible, as I, I'll get into in a minute. But fundamentally, without a power master plan, no power projects can proceed. On a sort of micro level re very necessary guiding policy document on a bigger level.

Of course, there's much more nuance to it because they set the direction for how the government is going to run the power sector, and in particularly, of course, how it is gonna decarbonize, the existing, coal centric system that you mentioned. So there's a lot of thought and a lot of discussion and argument. Goes into what is an appropriate mix, that's gonna be suitable for the country. It's gonna be financeable, it's gonna be able to be developed and built and meet the needs, of the country 10 years ahead. And as you mentioned, we have been waiting for quite a while for this particular master plan. PDP eight should have been issued, in a perfect world, in 2020 to cover the period. From 2021, it's really the end of 2030. And it was only finally approved at the end of May after approximately 12 drafts or so. that sort of, the delay on that reflects a couple of important points.

Number one, that there was a lot of hard work being done and some disagreement about what was the appropriate. Mix to put in P D P eight and for looking ahead to the future. And it also reflects the fact that there was such rapid growth in the renewable energy capacity here in Vietnam leading up to 2020. There was a lot more than was actually planned in the previous power development Master Plan seven. And that created a lot of headaches for the various authorities and agencies involved. Because it wasn't in accordance with the plan. So there were quite a few elements that went into the reason for the delay. But now that we have it, we have finally a guiding policy that will enable investors and developers to pursue specific projects. They have clarity on what the government's vision is in terms of things like how much LNG is gonna be in the mix, how much onshore wind, how much offshore wind. So it's a really fundamental guiding document and very good news that we have at last.

Ben: No, indeed, I think everyone was surprised actually by the signature I think we were expecting it by the end of the year, but Everyone is quite excited about this one. And on the PDP itself what are your main takeaways because there were a couple of draft that was published previously, what was a point you were expecting in this approved version and what was a point that was a bit surprising to you?

Giles: Yeah, good questions. I think there were 12 drafts that we saw at various points along the process. And so to be honest, having followed them, there weren't perhaps any dramatic. Prizes that came out in the final one. I think as you said, the fact that it came when it did was perhaps the biggest surprise. I think there were most people were anticipating, having waited so long, and the Jet P program in particular, having just been concluded in December, that it might take a bit more time. For the government to fully understand the implications of that, and given it had been so long already, maybe we'd wait till the end of the year to get that integrated fully.

So perhaps the biggest surprise is that it did come very suddenly in the end. Although having been in Vietnam for a long time, you learn that, that things can drag for a long time and then happen very, very suddenly. In terms of its actual content, I think perhaps one of the notable points, the language departs from prior power development master plans in. There will be, 6,000 and only 6,000 megawatts of offshore wind, for example, which would you would've seen in previous plans? In this plan it says there will be 6,000 megawatts of offshore wind by 2030. But if commercial conditions and technology allow, there can be more. And there are several places in the PDP eight that have this kind of, Flexible living, adaptable language. And it's a very significant point because the plan is such a fundamental guiding regulation on what can be done, the result is that if something is not on a plan, it can't be done.

And if something needs to be adapted, the plan needs to be changed. And that change process, that amendment process itself, is Very time consuming and cumbersome and uncertain. So the fact that this plan bakes in a certain degree of flexibility from the outset and anticipates the fact that it should be well known, that technology in these circumstances will of course change over the course of the remaining part of this decade. Then we don't necessarily need to go through a formal amendment process. Take advantage of those changes or to pivot, to adapt to circumstances on the ground. So that's a very significant point and I think something that came in quite late into the draft. The other slightly surprising, certainly welcome point that we see in there was the statement around the fact that there will be no limitation on the capacity for renewable energy, for self-consumption purposes. this is also and new thing for, to have no limitation. Rather than stating specific targets in the context of self-consumption for renewable energy, we know that the demand is growing very, very strongly. Not only amongst residential users, but also of course Users and manufacturers in particularly who need to meet commitments of their partners overseas.

So this, again it's part flexibility and part open-endedness. That's a novel and pleasantly surprising feature of this pdpa. And, finally, of course we expected a very solid commitment towards decarbonization in general. And we expected, to see coal continue to come down. It was pleasing to see specific statements. PDP8 about how and when coal plants will be, reviewed and reconsidered. And the statement was that in June, 2024, which is only a year away now, the X number of coal plants will be reexamined for their feasibility.

And if they're not making progress or if they're not feasible, they will be, removed. So that's a slightly surprising and I think a good development in this PDP eight.

Yiou: Yeah, that's interesting. So, continue with the PDP eight. Actually in your recent publication, you referred to the approval of the PDP eight as the end of the beginning. So can you share with us what you believe lies ahead for Vietnam Power Sector after this, publication of P D P A.

Giles: Certainly yes. Yeah, it was a little bit tongue in cheek, but having waited so long for issued whilst at the same time, dealing with so many clients who. Anxious to get into the next phase. We felt it was, an appropriate, statement. There is, as I said, the pdp8 is a guiding policy document, a very important fundamental guiding policy document, but still just a sort of a policy document or a plan. It doesn't implement legislation, it doesn't provide answers to lot of the questions that remain in the post feed and tariff, world that we live in here in Vietnam at present and in particular, it doesn't address the fundamental questions about how. These future projects are gonna be divided up amongst provinces, how those provinces will select investors to implement those projects and what ,the, developers or the project companies will be paid for their power.

And also what the contractual terms will be around the sale purchase of that power. So these are of course, Really nitty gritty points that are essential to any, decision to commence an investment, to purchase pipelines of assets or platforms or development assets. Without this information it's simply too difficult to assess value and to weigh up risk and value. And so nothing really can move forward. So we need all these implementing legislations to be issued. There is guidance and some clear statements from the government about what is the intention with respect. It's gonna be competitive procurement of investors.

There's gonna be auction based price discovery for renewable energy, but the details still haven't been finally issued. And, and the other notable thing worth mentioning is, the PDP does state that the electricity law itself needs to be amended or will be amended. To accommodate pdpa. And there may be various elements to that. It's not clear yet exactly what will be amended, maybe various elements. I expect to see, at least a couple of things. One will be around further around the transmission infrastructure, and perhaps private sector involvement.

Although it is already allowed in the electricity law, I think it needs to be expanded a little bit. And the other one is to enable and allow the. direct PPA program, the corporate, direct power procurement program to operate, and that's its own topic. But it seems that, the electricity law will need to be changed before that pilot program can be run. So we expect that to happen next year. And finally, the other major, flagged piece of legislation is a brand new, law on renewable energy that the government intends to issue. They've put a 20 target on that. We'll see how that goes. Again, we're not certain yet exactly what will go in that law, but I don't necessarily think it's fundamental or necessary to enable or, facilitate development of renewable energy, but I think it could be very valuable in that it might underpin certain targets and incentives applicable to renewable energy developers that will be in, at a law level. So I think that could be a very valuable thing.

Ben: That's definitely interesting. And I think everyone would be following, what would be done for the implementation after, PDP eight. I'd like to come back to solar and wind there were two round of feed-in-tariffs as I mentioned previously, and, which have now ended and, um, impressive, number of capacity being commissioned, from 2017.

 And can you tell us based on your experience, how you were associated with some of the project and what was, the key point you've glad you learned helping clients developing projects in Vietnam and also now that pdp8 has been, approved. What are you expecting, next for solar and offshore wind development in Vietnam?

Giles: Certainly. I've really, been here through the whole development phase of the renewable energy industry. I guess some of my earliest contacts when renewable energy here were way back. back in the, 2012, 2013. I remember speaking with EVN's renewable energy company who was contemplating, developing wind projects way before there was a feed and tariff. At that time, I was involved. Supporting the, GI Z on the, policy developments that were advocating for feed and tariff tariffs. And then of course, around 2016 or so, we did get the first, feed and tariff, particularly for the early ones for wind were not probably deemed sufficient enough to spur any specific development, but the first one for solar at 9.35 cents was very significant. So that really marked about 2016, the real of the development, and that's where interest really started to peak. Early interest, of course. And the early actions were taken by a lot of local developers who could see the opportunity and they had local relationships to get project approval.

So the first early wave of our involvement in broad terms was a lot of engagement between foreign investors and domestic investors who were looking to sell, projects. And there were. Probably too many, solar projects approved, initially. And these were sort of 50 megawatt projects that were approved at provincial level.

 There was a real frenzy at that time, of investors looking to buy. Certainly we were acting buy side typically, for those investors looking to buy projects from local developers. It was a bit like the real estate boom. I remember back in the early, two thousands here when, there were people buying contracts for, for apartments and selling them at the back of the line around the corner.

It was a little bit like, in the renewable energy space as well. People would demand money upfront to even have a discussion about buying and selling a project. There were different levels of experience and expertise amongst the sellers, of course. But suffice to say it was a very dynamic time. A lot of the international investors were getting to grips with the risk of Vietnam. And obviously there's a lot of talk about the viability of the PPA at the same time. So it was a very exciting dynamic time. But, it settled down of course. Things got developed. People started to understand and get comfortable, with the PPA and EVN and payment ability and these sorts of issues. And then we, a wave of. More sophisticated, both local developers and major international companies as well started, more and more to come and look at Vietnam.

And they would be interested in greenfield developments, and joint developments, joint greenfield developments with local investors. So the landscape changed a little bit for us helping, clients manage those greenfield type. Development or joint developments with local developers. And then, we saw a subsequent wave of, m&a into established operating projects, and particularly portfolios of projects. And this goes onto this day where, more or less, quite sophisticated domestic investors who have built up portfolios have been able to market them or stakes in them on competitive basis. we've been involved right through that and of course the financing of the project. So there's a lot that could be said about. Clearly projects needed to be financed for construction. There were a lot of refinancings that happened after construction phase and post operation. So we've been involved in helping both lenders and borrowers do those financing and refinancings as well. So really had the benefit of, and the pleasure to, to really see the full wheel turn on the feed and tariff side of things. And now, as you say, we're of course, post feed and tariff. There will be no more feed and tariffs here. The, the government is signaled very clearly that it will be auction, based price discovery. We don't know the details as I said, but, that's clear that will happen.

If we look at. PDP eight and what it says about solar and onshore wind in particular, we can, make some, draw some pretty clear conclusions.

Number one is that on onshore solar as grid connected, large scale solar is certainly not going to be prioritized in any way between now and 2030. partly due to the reasoning you mentioned earlier about the very significant number of solar that was already established, and connected under the feed and tariff regime and some of the issues that is caused with the grid. But there are other reasons as well to do with land use efficiency and things, that it's not gonna be a high priority between now and 2030. back to my point about the flexibility of p p A, it does say that, there will be room to add additional ground mounted solar if needed, before 2030. But, that remains, to be seen. On the other hand, onshore wind is very clearly going to be a very significant growth area between now and 2030. I think the number is that there should be an additional 17 odd gigawatts of onshore wind connected between now and 2030. There are about four and a half to five gigawatts, connected currently. So another four or five times. The current number, will be, developed and connected in the next seven and years. Significant, growth action. And as I've already said, we just need to wait. There are, there are plenty of interested parties, plenty of, well-resourced, very experienced, capable parties who are very keen to support Vietnam in that goal, to get that 17 and a half gig of new onshore when we just need to wait for those, implementing regulations to enable it.

Ben: And another point on solar and wind what's coming next after the feeding tariff was, the announcement of, transitional tariff in January of this year essentially there were really a rush from a lot of developers to develop project before reaching the deadline of the fi tariff.

And actually many project misses the deadline and they were set. In the limbo and didn't have any offtake this year. So, Vietnam has, announced a framework to set a transitional tariff for these projects that didn't meet the deadline which would set a cap and then the tariff will be negotiated with E V N.

 On the ground. Do you have more detail about, what are the implementation steps and whether there are project now with the transitional tariff, because I was reading recently that many project has started to accept the offtake, et cetera. So it would be interesting to get an update from what you've been hearing on the ground.

Giles: Certainly. You're absolutely right. The so-called transitional projects have been a bit of a bug bear over the last couple of years, and, a wide range of different kinds of projects. So it's very difficult to treat them all the same, although the regulations really have treated them all the same.

So I think in total there were about 90 odd projects that fell into this definition of transitional project. Those are projects that have signed PPAs. But didn't connect to the grid before the relevant feed and tariff deadline expired. And of those 90 projects that, qualify as transitional projects, there are some that have basically done no construction works at all. And there are some that have, 30 turbines in the air that are spinning around, going nowhere. So there's a very wide range and equally a wide range of circumstances of the various developers, but you can imagine that a large number of them are under, high, financial stress as a result of building these projects, but not, being able to commercialize them in any way.

So it's been very difficult topic for a lot of people. The government has. To its credit or otherwise held a firm line throughout the whole process that it will establish a tariff regime, a ceiling and a floor based on, the data provided by the projects around project costs, and it will establish a tariff range and then negotiate specific tariffs. With each of those transitional projects. A lot of the developers were very reluctant, to participate in this because the tariff range was considered very low. It's approximately 30 to 40% lower than the relevant feed and tariff, rate that applied. And it was only a Vietnam DONG number, no indexation to the dollar, which the feed Tarek was. So there was, wide scale, reluctance to have to participate in this regime. And a lot of those projects I think, felt that they would look for other sources to commercialize.

Notably the possibility of participating in the D P P A program that I mentioned, the corporate. Correct power procurement regime. As time and, circumstances went on, I think it's become clear that, the electricity law have to come first for that. So we're still at least probably a year away from having that regime.

 And as a consequence slowly but surely, these projects have had to engage with to discuss the tariff . Maybe 40 have commenced negotiations on a specific tariff. And I think three or four or five have confirmed a tariff somewhere in that range.

At the present time they have said that it is a temporary agreement on tariff. But of course it's a very uncertain, where it will go from here. So Not a great story. I feel very much for a lot of the wind developers who, struggled through covid, extraordinary stresses to get their plants, developed. And some just simply unable at the last minute, the huge rush at the last minute, at the end of October, 2021 to get connected and failed and then sat around for two years. dealing with debt and the operations, and the maintenance without any revenue at all. So, difficult period for sure.

Ben: Yeah, no definitely challenging for these developers and projects. And you mentioned about the D ppa, the direct PPA program, which was, one gigawatt program. Allow, corporate to offtake directly from projects and, with the signature of the cfd.

Could you describe the main feature of this program and whether you have. Hear of any recent development.

Giles: Yeah, certainly it's an indirect, synthetic, direct, PPA scheme, so, The regime is that the generator would sell into the wholesale market at effectively whatever the relevant, spot prices. The power relevant power consumer would still buy power from its regular retail provider at regular retail rates. But the consumer and the generator would enter into a C F D agreeing a strike price, and then obviously depending on where the retail prices, they will either pay the generator or vice versa. That there have been tweaks to that system over the years. It has been a program that has been under development for a number of years. For example, initially it was thought that the consumer would pay the wholesale price to the retailer rather than the regular retail price. And the balancing would happen above that, but it was concluded that was too difficult to put in place. And so the consumer will still pay the regular retail price for power. There are some tweaks to it, but, fundamentally there hasn't been any dramatic progress on it for a year or more. There have been various drafts, put out into the public, not very different from each other, apart from those twos I mentioned. But no one who has really taken responsibility and decided this needs to happen. It needs to happen now. So where we've ended up as a result is that the demand for this kind of, activity or this kind of program has ballooned dramatically from where it was when it was conceive, five or six years ago. And first under discussion. though there was plenty of demand for it. One of the questions is whether, the one gigawatt cap for the pilot is appropriate anymore or indeed whether even it's appropriate to have a pilot at all. And just jump into the implementation of it, those are questions that are still undetermined. And as I mentioned, the electricity law is gonna have to change to allow it. The primary reason for that change needing to be made is to allow or the parties involved to collect effectively. It's not a willing fee because they're not truly wheeling the electricity directly, but collect the fee for participating in the d ppa, regime.

And, it was felt that the law itself needed to change to allow that. So at the moment, my understanding is that is basically the last thing holding up the logistics or the fee, legal feasibility of the program. Then it just needs someone to really champion and sign off on it. I hope that will be at the prime ministerial level. I hope that will happen very soon after the electricity law. And my personal hope is that it not limited to one gigawatt initially. But that also remains to be seen.

Ben: Yeah. And hopefully we'll be, positively surprised like for the pdp8 and I will be approved, in the next month. So let's see. one point I want to come back on and you mentioned it, a couple of time From a bank accountability perspective, Vietnam is a really challenging country, because, essentially the.

PPA templates, has, many issues that does not really allow international project finance standard and, project finance for the project. There's issues of, what the treatment of containment, changing law, termination, political force measure, et cetera. Could you just describe, those.

Key bank issues, and for us just to understand what are the challenges that the banks are usually facing, to finance, renewable projects in Vietnam?

Giles: certainly I think You've already touched on the main ones. We typically say, there are five or six main bankability issues with the previous feed and tariff, renewable energy ppa, the wind and solar ones. There are some slight variations, but fundamentally the same issues. And, you've hit on some of them. The main one, of course is the curtailment issue. there's no take or pay the curtailment. right of the buyer is very wide and practice, and there's no compensation for curtailment. And that has clearly been the largest and most significant commercial issue, that, many renewable energies projects have faced over the recent years. I Don't think there are any official statistics released to the public, but certainly anecdotally there, there have been times. When some of the solar plants have been curtailed up to 80% for, several months on end, or weeks on end at least.

the wind sector has faced less curtailment, but nevertheless, the point is that the ppa, allows curtailment based on effectively just a knee with no compensation. That's a major issue. the other major ones are the change in law that the PPA doesn't allow, any protection for change in law.

So if law has changed to change the tariff because the tariff for the feed and tariff established at a decree or decision level of the government, that can be changed and that there's no protection. Baked into the contractual agreement to protect the seller against that. So ostensibly, the feed and tariffs could be reduced at some time during the 20 year term of the PPA or other changes in law, for example, environmentally related, that could result in additional CapEx or whatever for the developers.

That's another key issue that highlighted is. Facilitative International Finance. One is the step writes. The PPA is completely silent on the ability, of the step into projects to rescue them if need be. In case of financial distress. And similarly there's the assignment of the PPA to lenders, question marks over whether Evia would consent to that, and the circumstances in which that could happen.

That that's another, key, bankability feature of the PPA termination payments, connected with other issues such as the political force that you mentioned. The PPA doesn't provide for, any Valuable termination payments in case of compensation. It does allow a general right at law to claim compensation for damage caused in certain circumstances, but whether that extends to force majeure is questionable, and in any case, the ability to really pursue that right, practically speaking is very limited.

That is seen as another major weakness. If the buyer simply breaches the agreement. The seller wants to terminate its rights are effectively quite limited. So that's a key issue. And finally, perhaps the dispute resolution issue, is pointed to as being very significant.

 In these PPAs, these commercial agreements, an option for parties to resort to. Independent, neutral, grounds for dispute resolution. I mean, classic example would of course be arbitration, whether abroad or even in Vietnam, would be, the preferred solution.

But these PPA templates have terms that require the parties to go through a statutory dispute resolution process that involves the regulator itself. There are question marks about the suitability of that from an independence and, impartiality kind of point of view.

So those are the main issues that are typically pointed to as being a bankability or certainly not up to international standard, and or at least will not facilitate or support project finance especially. Project finance, which is the target of course, and, the ideal, solution in terms of efficiency for capital, and the cost of the project.

Ben: Yeah, definitely the Ps always. Has been a key challenge to project finances projects. And one, thing I was hearing lately was that there were some discussion about a abandoning the U S D indexation in the next round of PPAs. I don't know if you've heard anything about that.

Giles: It's certainly been the preferred position of the government. Transitional tariff range that they issued as not have any US dollar indexation. we still await the final details on the subsequent regime, but it's certainly been that the government like. To, avoid having to do that for its own reasons. Clearly they will be receiving and have received the method that would be a very dangerous or dramatic step with respect to international financing that places a very significant risk on the borrower that needs to be and the lender that needs to be, addressed through some other means.

And this all goes to the ultimate cost of the projects and the cost of capital. And of course, it all ultimately falls to the bottom line on the cost of electricity as well. So we're in a very dynamic period right now where the government is wrestling with, its ideal scenario where it wouldn't have to index cost is cost to a US dollar, but a clear imperative and now a specific plan to develop certain, gigawatts of assets.

 Before a certain period of time the domestic capital market cannot afford to finance all of that capacity. There will have to be a substantial portion that comes from foreign sources in any way. It might be cheaper and more efficient to use those foreign sources, but of course, as all these issues allude to the environment has to be right and it has to be efficient to make it work.

So the answer to your question is, I don't know whether that is going to end up, I know that the government would like to adopt a position where there will be no indexation. Whether that is a functional reality, when push comes to shove, we will need to see, and it may be that there are certain large scale projects that are able to negotiate different terms and the smaller scale, projects will be forced to accept different terms.

 We'll have to see.

Ben: And one sector where, I think we'll probably need a lot of international finances, offshore wind so in the P D P, there's six gigawatt offshore wind capacity targets by 2030. in Vietnam right now, The tariff and the allocation mechanism and the permitting process have still yet to be clarified.

 What is your view on this offshore wind goal, and what do you think should be the step to be taken, for Vietnam to achieve this, six gigawatt goal?

Giles: I am very excited about this goal. We have a lot of, great. Offshore wind clients and there's so much interest in the sector. We love the complexity of the projects. I think they're fascinating. I really believe in the future of the offshore wind market for Vietnam. But clearly there are very significant challenges, especially in this decade to get these projects up and running. As you alluded, they have novel projects to Vietnam. They're extremely capital intensive, they're very complicated engineering tasks. And all of these factors, make it a very challenging environment, particularly, when you add layer on the top, the need for a substantial amount of private finance to come in from overseas. So what I think Vietnam is clear on what it needs to do from a regulatory perspective. It needs to establish clarity around the site survey rules and the completion of a marine spatial plan for the country. So it can finally decide exactly where these offshore wind projects are gonna go, how they're gonna be connected, all these sorts of things, and allow the investors to survey.

Spend the money upfront to do the surveys necessary with confidence, that there's a pathway for them to be selected to do the project later on. These are all sort of regulatory steps that are fundamental in the very near future. But there's so much more complexity to it around, the supply chain for the industry, the onshore infrastructure needed to facilitate the ships and the engineering of the whole thing. The mere availability of the turbines globally is an issue that needs to be considered, and that's before you get to any of the commercial and contractual terms and the payment terms for how these things are gonna work. Vietnam has a track record of project finance internationally, project finance, thermal power plants. There are a number of great examples, mainly b o T projects. I think Vietnam really needs to look at those projects and really treat these offshore wind projects in their own bucket, very specialized bucket. And give them some of the frameworks that the previous thermal plants have done. The government has signaled that is not the intention, that the intention is that these be done as i p p projects outside of b o t frameworks or similar and without government guarantees and things of this nature. But I really don't think that is a reality. Especially given the huge sums of capital and the complexity for these things.

 These investors won't be able to commit necessary to make that 2030 target a reality. If they don't get, clear answers on specific topics, a sap, and I hope that will happen. I really do. But I think that 6,000 megawatt target by 2030 will be a challenge. Thereafter. I'm very, very confident that the market and the operating environment will, continue to develop pace. And I'm sure we'll see rapid growth. It's just really what's gonna happen in the next, seven and a half years that is, a little bit, uncertain for me.

Yiou: To wrap up, how do you see the power market development in Vietnam over the next five years? And what do you think are the most promising opportunities in Vietnam for the developers?

Giles: Based on the demand growth, right? So, the demand projections for power growth in the generation, Vietnam basically needs to double its existing capacity between now and 2030. I spent 20 odd years, at least to build up the current 79 gigawatts power. It has to double that in the next seven and a half years. And that's to keep up with demand and to keep up with the growth projections of the country, which I think are sound in and of themselves. So, I think it's all predicated on that macro picture, you know. We Need these new assets. The country needs them, the investors need them, and there is plenty of willing participants and sponsors and investors and financiers as well. We just need to work through, the terms, or develop the foundation for that to happen. First of all, what I see in the next five years is huge growth and generation capacity. So there's a lot of development, a lot of financing that needs to be done. Looking at where it's gonna come from, offshore wind in the next few years is gonna be a very, hot, active sector as is the C&I self-consumption rooftop type stuff, and there are question marks around whether that will be allowed to not necessarily just be on rooftop, can be off rooftop, larger than one megawatt capacity, which is the current limit. That will be a very exciting, area to watch. And related to that is the DPPA program. There are a number of very significant power users here that have made commitments. Their supply chains have commitments that they need to meet. And they'll be pushing very, very hard to develop that and then move very aggressively to implement it.

So that's a very exciting area to watch as well for me.

Yiou: Thank you.

Giles: It's my pleasure.