Globlex Securities pointed out mounting investor unease regarding Vietnam’s renewable energy sector amid a sweeping shake-up of the country’s feed-in tariff (FiT) policy, which could sent adverse effects to B.Grimm Power Public Company Limited (SET: BGRIM)
Regulatory uncertainty spiked after the Government Inspectorate questioned the validity of Commissioning Acceptance Certificates (CCAs) granted by Vietnam’s Ministry of Industry and Trade (MOIT), declaring that only projects with a valid CCA are eligible for FiT.
Moreover, Vietnam Electricity (EVN) added to the turmoil by unilaterally imposing a temporary FiT rate on more than 170 wind and solar projects—without securing mutual agreement—prompting widespread backlash and fueling doubts over the credibility and stability of government policy.
These developments may raise default risk and erode the legal foundation for long-term power purchase agreements (PPAs).
The analyst noted that BGRIM provided an update on the situation during a recent conference call, confirming that two of its key solar assets—Phu Yen TTP (80% stake, 257MW) and Dau Tieng Tay Ninh Energy (DTE, 100% stake, 240MW)—achieved commercial operation in June 2019, but only received their CCAs from the MOIT the following year.
As a result, EVN recalculated tariff payments using the later CCA date, disbursing partial payments at a temporary rate of USD7.09 cents/kWh instead of the full FiT rate of USD9.35 cents/kWh. The two-cent shortfall, recognized as accounts receivable by BGRIM for the January–April 2025 period, amounts to approximately THB 180–200 million.
While BGRIM has fully complied with all existing regulations, the company anticipates a positive resolution, with active negotiations underway to restore recognized revenue. Management is also exploring potential contract extensions to preserve the original internal rate of return (IRR), and direct power sales via PPAs as alternatives to reliance on EVN.
However, in a worst-case scenario where the temporary FiT becomes permanent, BGRIM’s net profit could decline by THB 360–400 million annually, or roughly THB0.14–0.15 per share.
Despite these uncertainties, the outlook for BGRIM remains constructive heading into the second half of 2025. The company is expected to benefit from stable margins quarter-on-quarter, due to anticipated declines in gas pool prices that should help offset lower electricity tariffs.
Seasonal demand should support higher sales volumes, while new projects slated for 2025–26—such as the KOPOS wind project (10 MWe) in South Korea, IBS solar (19 MWe) in Thailand, ARECO1 solar (65 MW) in the Philippines, and the Nakwol1 wind farm (179 MWe) in South Korea—are set to strengthen earnings.
Globlex Securities reaffirms a ‘Buy’ rating on BGRIM with a target price set at THB 13.7 per share, based on a sum-of-the-parts (SoTP) valuation. The analyst believes concerns over Thailand’s tariff cap and the Vietnam FiT dispute are overstated, suggesting falling gas costs and regulatory compliance in Vietnam will help limit downside risks for the company.
