**Table 6: Nationally-determined average retail tariff (ART) excluding value-added tax, 2005-2019**

|**Year**|**ART (VND/kWh),**<br>**nominal increase**|**Notes**|
|---|---|---|
|2004|Not available|Electricity Law passed: provides that ART should reflect costs of supply, while**PM retains**<br>**tariff-setting authority**.|
|2005|789|ART is 789 VND/kWh as of January. In July, the Electricity Law took effect. Electricity<br>Regulatory Authority of Vietnam established.|
|2006|795,↑0.8%|PM (Decision 26) issued roadmap to market-based, cost-reflective tariffs that would be<br>based on market price from 2010.|
|2007|842,↑5.9%||
|2008|890,↑5.7%|Despite ART increase, EVN incurred net loss of VND 7.3 trillion due mainly to global<br>financial crisis impact on EVN’s foreign currency debt exchange rate.|
|2009|949,↑6.6%|ART increase in March reflected reported supply costs for 2009.<sup>13</sup>PM (Decision 21)<br>required ART to be updated annually and transparently, and delegated MOIT to adjust<br>them by up to 5 percent per year above the last rate delegated to MOIT.|
|2010|1,058,↑11.5%|PM increased ART in March based on a forecast of costs in 2010. Costs proved higher<br>than expected due to drought-induced reliance on thermal generation, as well as high<br>inflation and currency depreciation. MOIT (Circular 13) set system market operator fees.|
|2011|1,242,↑17.4<br>1,304,↑5.0%<br>_Note: Cost recovery_<br>_would have seen a_<br>_rise to 1,584,_<br>↑_27.5 %_|<br>MOIT proposed increase to recover 2010 actual costs and 2011 forecast costs. Due to<br>concerns about inflation, the PM increased it in March to cover only expected costs for<br>2011, deferring recovery of 2010 costs and losses to future rates. In April, PM Decision<br>24 allows for adjustment once in three months to reflect generation cost changes, but<br>**adjustments shall be managed with a view to maintain macroeconomic stability and**<br>**contain inflation**. Master Plan approved by the Prime Minister in July states prices will<br>be increased gradually to cover long-term marginal cost by 2020. In December, a second<br>increase covered forecast costs for 2012, but not pending costs and exchange losses.|
|2012|1,369,↑5.0%;<br>1,437,↑5.0%|ART adjusted twice in 2012 (July and December).|
|2013|1,509,↑5.0%|Amended Electricity Law (effective July) emphasizes public transparency regarding<br>changes of component elements to retail price adjustments,**formalizes role of MOF in**<br>**several key aspects of the tariff framework**. PM Decision sets the bracket of 1,437-1,835<br>VND/kWh ART adjusted in August. PM Decision 69 (December) raised the maximum that<br>MOIT can increase tariffs to 10% but provides for ART**recalculation every 6 months**<br>**(instead of 3 months), with a mandatory 12-month delay for any increase over 7%**.|
|2014|No change|Circular further defines procedures for setting ART, and calculation of distribution costs.|
|2015|1,622,↑7.5%|The Prime Minister approved a bracket of 1,437-1,835 VND/kWh, equivalent to -5<br>percent to +22 percent from the previous average rate. ART adjusted in March 2015.|
|2016|No change||
|2017|1,720,↑6.0%|In June 2017, PM Decision 24 guarantees the transparency of tariff management<br>requirements according to market rules and allows EVN to increase ART by up to 5% each<br>6 months subject to macroeconomic conditions. The ART increase, in November, was<br>based on costs in 2016 and was made to avoid imbalance in EVN’s finances|
|2019|1,864,↑8.4%|Increase, in March, based on higher input prices from coal and gas and forex.|

Note: **Bold red text** indicates elements less aligned with a market approach to attract new investment. Source: Authors based on Hughes & Flochel 2016; Neefjes 2016; VNN 2017.

13 The 2009 tariff increase was a prior action for World Bank-supported Development Policy Operation.

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