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The Ministry of Industry and Trade's proposal to increase the rate of long-term minimum contract power output (Qc) from 65% to 75% and extend the application period from 10 years to 15 years is considered a breakthrough step, helping to remove financial bottlenecks for a series of LNG gas power projects in Vietnam.
This is not just a technical adjustment. This is a strong signal that Vietnam is ready to build a mechanism attractive enough to attract tens of billions of dollars of investment in strategic energy infrastructure.
⚡ What is Qc and why is it important?
Qc is the rate of electricity output committed to by the buyer in a long-term contract. The higher the Qc, the more stable the project's cash flow and the easier it is for banks to approve loans.
| Target | Current regulations | New Proposal |
|---|---:|---:|
| Minimum Qc ratio | 65% | 75% |
| Application period | 10 years | 15 years |
| Ability to arrange capital | Average | Noticeably higher |
| Investment attractiveness | Limitations | Strong increase |
Direct impact on LNG projects
LNG gas power projects often have a total investment of billions of dollars, using international loans with a repayment period of 12–15 years. When the electricity output is guaranteed at a higher level, the investor will easily achieve Financial Close and put the project into practical implementation.
Projects with major benefits include:
• Nhon Trach 3 and 4
• Quang Ninh LNG
• Hai Phong LNG
• LNG Quynh Lap
• O Mon I converted to LNG
Why do banks care about Qc?
International credit institutions not only look at technology, but most importantly the ability to create stable cash flow.
| Evaluation factors | Impact when Qc increases |
|---|---|
| Forecasted revenue | More stable |
| Ability to repay debt | Significant increase |
| Credit Rating | Improve |
| Ability to mobilize capital | More convenient |
The role of LNG in Power Planning VIII
LNG gas power is identified as a flexible base power source, helping to balance the system between wind and solar power
