1

REGULATORY ISSUES AND POWER SECTOR RESTRUCTURING

1. EVN in brief2. Organizational structure3. Key performance indicators4. Regulatory body5. Restructuring power sector

2

EVN in brief Vietnam Electricity (EVN) is a state economic

group founded in 2006, engaged in generation, transmission and distribution of electricity in the whole Vietnamese territory.

EVN is responsible for electricity supply to meet the demand for development of economy and consumption needs of the people with the power tariffs approved by the Prime Minister.

EVN takes the responsibility for investment of power generation and network expansion to meet the power demand of the country

Current Organization Structure

EVN Headquarter

28 Power plants

National Dispatching

Center

11 DistributionCompanies

NationalPower

Transmission Co.4 PECCs

Institute of Energy

EVN Telecom

IT Center

Single Buyer Company

4 Thermal PMU

3 Hydro PMU

3 MechanicalCompaniesPMU of

Nuclear Power& Renewable Energy

InformationCenter

PMU ofCivil Construction

4 Schools

4

18 JSC in power

generation,

Banking, finance,

real estate,

Security and others

Vietnam Electricity

Institute ofEnergy

4 Schools

6 Powerplants

NLDC SB 4 Thermal

PMU 3 hydro

PMU

PMUNuclear &

Renewable En

PMUCivil

Construction

InformationCenter

IT Center

8 indepen-dent co.:1. PC1

2.PC2

3.PC3

4.PC HaNoi

5.PC Ho Chi Minh

6.TPP Uong Bi

7.HPP Đ-H-Đ

8.EVNTelecom

25 joint-stockcompanies:- 12 HPP JSC

- 5 TPP JSC

- 4 PECC JSC

- 3 EMC JSC

- PC JSC Khanh Hoa

9 one-member ltd.companies:1.NPT

2.PC Đong Nai

3.PC Hai Phong

4.PC Hai Duong

5.PC Ninh Binh

6.PC Đa Nang

7.TPP Can Tho

8.TPP Phu My

9.TPP Thu Đuc

5

Key peformance indicators 2008

1. Chartered capital: 3 UDS bils2. Total staff 2008: 85.000 (including joint-

stock companies) 3. Installed capacity: 10.128 MW (account

for 64,52% of total national capacity)4. Sales:65.93 billion kWh (sales growth

rate 12,8%/GDP 6,23%)5. Retail contracts:10.553.390 contracts to

end-users6. Average retail tariff: 5.12 cent/kWh7. Total asset 2008: 10 USD bils USD

6

Installed capacity 1996-2008

44614910 4910 5285

57266233

78718884

1001010626

1157612270

13512

15763

12636

11286

101879255

82837408

65525655

4893432938753595

31772796

0

2000

4000

6000

8000

10000

12000

14000

16000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

năm

MW

Pđặt Pkdụng Phụ TảiInstalled Capacity Capacity Consumption

7

Sub Total

10.128 5.569 3.078

Hydro 5.135 78 976

Technology EVN # EVN IPP/BOT

Coal 1.514 445

Oil + Gas 3.448 1.968 2.102

% 64,52 15.87 19,61

- C o a l1 3 %

- H y d r o 4 0 %

- O i l & G a s 4 7 %

TOTAL 18.775

8

HANOI

9.07%

PC1

22.19%

PC3

7.17%

HAIPHONG

3.49%

DONGNAI

7.33%

PCHCM

18.75%

PC2

25.75%

NINHBINH

1.02%

HAIDUONG

2.3%

DANANG

1.5%

KHANHHOA

1.3%

E le c t r ic i t y s a le s

25,8

50.8

30,2

34.8

34,9

06.7

39,6

96.5

44,9

21

51,3

68

58,4

38.1

7

65,9

26.0

1

22,4

03.6

1 4 . 11 5 . 3 9

1 6 . 9 6

1 5 . 4 5

1 3 . 7 2 1 3 . 1 61 4 . 3 5

1 3 . 7 61 2 . 8 1

-

1 0 , 0 0 0 . 0

2 0 , 0 0 0 . 0

3 0 , 0 0 0 . 0

4 0 , 0 0 0 . 0

5 0 , 0 0 0 . 0

6 0 , 0 0 0 . 0

7 0 , 0 0 0 . 0

2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

9

Consumption structure 2008

Các hoạt động khác

3.52%

Quản lý & Tiêu dùng dân cư

40.45%

Thương nghiệp & K.Sạn NH

4.92%

Công nghiệp & Xây dựng50.13%

Nông,lâm nghiệp & Thuỷ sản,

0.99%

ResidentialOthers

Agriculture, Forestry &

Fishery

Industry & Construction

Commercial & Hotel

10

6KV 10KV 15KV 22KV 35KV

ELECTRIFICATION

220V

U«ngBÝ

Ph í cLong

7,493 km7,622 MVA 50,564 km10,395 MVACity 100%

Province 100%

Commune 97,26%

Household94,03%

11

Power sector structure

PVN

TKV

IPPs #

BOTs

EVN

GENCOs

Power plant PMUs

National

Dispatching

Center

National

Transmission Cor.

DISTRIBUTION

(BULK & RETAIL)

SERVICEGENERATION

PCs

SB

Government

MOIT

ERAV

12

Electricity Regulatory Authority of Vietnam Main functions and responsibilities

To submit the national power master plan and the power sector reform program in line with the roadmap for establishment and development of the power market in Viet Nam for the Prime Minister's approval.

Review and monitor the power development plan at central city/province level;

To appraise new issuance, amendment, and withdrawal of electricity activity license granted to organizations and individuals participating in electricity activities;

To promulgate fees and surcharges related to the activity of the power market; fees for transmission and distribution; fees for participation and transactions in the power market; fees for regulation; surcharges for using ancillary services and other types of fees

To appraise tariffs framework for power generation, bulk power supply;

13

Electricity Regulatory Authority of Vietnam

Main functions and responsibilities (con.)

To approve bilateral Power Purchase Agreement (PPA); To monitor the power supply and power system operation to assure

suppy-demand balance To appraise financial assistance given to Demand - side management

(DSM) and Energy efficiency (EE) projects To regulate competitive activities amongst and between participants in

the power market in accordance with competition regulations; settle claims and disputes arisen from these activities in the market; put forward the authorized level options for merger or unbundling electricity entities in order to ensure the transparent competitive activities in the market.

To design a plan for construction and development of different phases for the power market; participate in development of the market and power trading with outsiders.

To superintend and inspect the implementation of Electricity law Others

14

1. Installed capacity of each GENCO will not exceed 25% total installed capacity of the whole system;

2. Financial viability for investment to new power plants;3. New GENCOs will have equivalent capacity;4. New GENCOs will have equivalent total asset;5. New GENCOs will have equivalent average costs per

kWh; 6. Mixed technologies (hydro and thermal power);7. Obtaining the economy of scale on one river run-off;8. Regardless the geographical difference;9. Including existing power plants and on-going

construction power plants.

GENCOs optionsGrouping principles

15

a) GENCO: a group of power plants under the form of parent - child company. Child companies will be: independent accounting companies, one-member ltd companies, joint-stock companies.

b) GENCO has consistent business strategy through out all its members basing on each independent member benefits. GENCO will offer one price for all electricity generated by its members to the generation competitive market; or parent company reviews and agrees with child companies the bid price prior to offering to the market.

c) GENCO uses its owned capital and mobilizes capital from other economic entities for new power plant projects.

GENCOs optionsOrganization and activities

16

a) Stage 1: Establish 100%-state-owned GENCOs for stable organization and operation in transition period; including one strategic GENCO (consists of large multi-purpose hydro power plants and strategic power plans) and 3 other GENCOs (by grouping the other existing plants and on-going construction plants)

b) Stage 2: Following their own strategy, GENCO will be equitized.

GENCOs optionsEstablishment process

17

Electrification

9 8 . 0 9 8 . 01 0 0 . 0 1 0 0 . 0

9 4 . 69 6 . 4 9 7 . 0 9 7 . 3

8 8 . 0

9 1 . 59 3 . 4 9 4 . 0

8 0 .0

8 4 .0

8 8 .0

9 2 .0

9 6 .0

1 0 0 .0

2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

%

D i s t r i c t C o m m u n e H o u s e h o l d

Investment (Billion USD)

  2008 2009 2010 2008-2015

REQUIRED CAPITAL 2.3 4.4 6.3 43.9

Generation 1.2 2.1 3.8 22.5

Transmission 0.3 1.0 1.1 7.7

Distribution 0.4 0.6 0.6 4.8

Debt clearance 0.4 0.6 0.8 9.0

19

THANK YOU FOR YOUR ATTENTION!