A direct power purchase agreement (DPPA) allows businesses to procure electricity directly from private firms producing renewable energy. Current law in Vietnam requires power producers to sell electricity to the state-owned utility, Electricity of Vietnam. However, a viable DPPA mechanism would have two private parties enter into a transaction, thus attracting significant new foreign investment to ramp up Vietnam’s renewable energy generation.

USAID’s Vietnam Low Emission Energy Program (V-LEEP) is working closely with Vietnam’s Ministry of Industry and Trade to pilot the DPPA mechanism in 2018. On March 20, USAID organized a workshop in Ho Chi Minh City to discuss pros and cons of how such an agreement might be structured.  It was attended by 19 established international investors from Vietnam and around the region. The experts identified potential challenges in introducing DPPAs in Vietnam’s energy market.

So What?  USAID is leading an influential coalition of public and private sector partners to transform the energy sector to increase use of renewable energy and help power Vietnam’s clean, smart, and secure economic growth.