The Vietnam Electricity (EVN) Group has announced that it signed a credit agreement with the French Development Agency (AFD) for a loan worth EUR76 million (US$89.47 million) to implement the Bac Ai pumped-storage hydropower plant (Bac Ai project) in Khanh Hoa province.
This is the first of six loans, totaling nearly EUR480 million, provided by a consortium of six lenders for the project.
The Bac Ai hydropower project has a designed capacity of 1,200 MW, comprising four turbines of 300 MW each, with a total investment of VND21.1 trillion (US$802.5 million). It is included in the list of power projects approved in principle for investment by the Prime Minister. EVN has assigned the Power Project Management Board No. 3 (EVNPMB3) as the investor’s representative.
The project holds significant importance for the national power system, especially as many renewable energy plants, including solar and wind, are being integrated. Its main task is to provide peak-load electricity, helping to smooth load fluctuations by pumping during off-peak hours and generating power during peak hours.
According to Julien Seillan, AFD Country Director in Vietnam, the project is one of the key energy projects that plays a central role in Vietnam’s energy transition. He praised Vietnam’s achievements in implementing renewable energy projects, despite the intermittency of these sources, and highlighted the need for a stable and storable energy reserve.
He stated that the Bac Ai project offers the solution, with its 1,200 MW capacity ensuring that every kilowatt of green electricity is available exactly when demand is at its highest.
The project is symbolic of international support for Vietnam, involving the European Union (EU), AFD, Germany’s KfW Development Bank, the European Investment Bank (EIB), Japan’s International Cooperation Agency (JICA), Italy’s Cassa Depositi e Prestiti (CDP), and Proparco—a French development finance institution. It highlights the effectiveness of close cooperation, providing a strong foundation for implementing a large-scale and critical project.
EVN Deputy General Director Nguyen Xuan Nam emphasized that the group, as a key player in modernizing the power system and promoting clean technology, sees the US$76 million loan from AFD and EU support through the Energy Transition Programme between European donors and EVN (ETEF) as a clear reflection of Vietnam’s Just Energy Transition Partnership (JETP) with the international community.
Nam highly valued AFD’s support in technical, safety, environmental, social, and legal aspects during the deployment of the project and expressed his confidence that the signing marks a new phase of deeper cooperation between EVN and AFD amid Vietnam’s growing climate commitments and electricity infrastructure demand.
The Bac Ai project is Vietnam’s first pumped-storage plant and plays a key role in ensuring electricity security, enhancing system flexibility, and facilitating the integration of increasing renewable energy sources under the revised Power Development Plan VIII. Once completed, it will serve as a strategic facility for energy storage, grid balancing, and national power system management.
It not only delivers technical value but also directly contributes to emission reduction in the power sector, aligning with the Vietnamese Government’s commitment to achieve carbon neutrality by 2050.
