Biomass Power Purchase Agreement

Under the current AAE and the design of the new AAE, Vietnam Electricity (EVN) is the buyer of all the electricity power of the corresponding biomass electricity project. In particular, the current AAEs and the new PPP project define the following scenarios in which EVN is not obliged to purchase electricity: businesses and municipalities often have too narrow a view of renewable energy options and focus solely on how to meet their immediate needs. The partnership with Ameresco, one of the largest independent energy efficiency companies and energy service providers, will enhance the full value of existing facilities, from the use of a contract to purchase solar electricity capable of transforming roofs into energy systems, to the development of landfill energy, gas to energy and biomass to produce electricity from waste disposal. We can design, build, operate and maintain these facilities so that our customers can benefit from stable and reduced additional costs and obtain a new source of revenue without increasing transportation costs. While this is a positive development for developers and lenders, this should remain a problem for some, if not most, developers and lenders reviewing Vietnam`s biomass electricity sector, given that the burden of proof to prove their losses falls on the seller and whether the damages recovered will be at least sufficient to cover the amount owed to its lenders. , its capital costs and expected returns. The previous AAE took a different approach and, for termination due to the EVN failure, the amount of compensation was limited to the value of the electrical power actually generated by the seller in the year prior to the termination. This was difficult for international lenders to accept, as there was a risk that the amount would not cover outstandings earned under the financing agreements with the seller. By entering into a long-term contract with an energy supplier, organizations can monetize landfills, waste treatment companies, remote land, roofs and car parks. An AEA provides a reliable source of revenue for the duration of the contract, and federal tax credits related to a solar power sales contract can make the resulting negative performance competitive on the open market at prices.

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