On 26 December in Ha Noi, Vietnam Electricity (EVN) and the French Development Agency (AFD) signed a credit agreement for a EUR 76 million loan to implement the Bac Ai Pumped-Storage Hydropower Plant Project (in Khanh Hoa Province). This is also the first loan agreement signed among six loans (with a total value of nearly EUR 480 million) provided by a consortium of six lenders for this project.
Attending the signing ceremony, AFD was represented by Mr. Julien Seillan – Director of AFD in Viet Nam.
EVN was represented by Mr. Nguyen Xuan Nam – EVN Deputy General Director, EVN Chief Controller Ms. Do Thi Loat, leaders of EVN’s specialized departments, and representatives of Power Project Management Board No. 3 (EVNPMB3).
The Bac Ai pumped-storage hydropower project has an installed capacity of 1,200 MW (including four units, each with a capacity of 300 MW), with a total investment of VND 21,101 billion. The project is included in the list of power generation projects for which the Prime Minister has approved the investment policy. EVN has assigned EVNPMB3 to serve as the owner’s representative.
The project is of significant importance to the national power system, particularly as a growing number of renewable energy plants (solar and wind) are being commissioned and integrated into the grid. The project’s primary function is to supply peak-load electricity, helping reduce disparities (flatten the load curve) by operating in pumping mode during off-peak hours and generating electricity during peak demand periods.
AFD Director in Viet Nam Julien Seillan speaking
At the signing ceremony, Mr. Julien Seillan shared that the Bac Ai Pumped-Storage Hydropower Plant Project is one of the core energy projects supporting Viet Nam’s energy transition. Viet Nam is regarded as one of the most dynamic economies globally, which presents the major challenge of doubling electricity generation capacity by 2030 while also ensuring compliance with climate commitments—particularly the goal of achieving carbon neutrality by 2050.
Mr. Julien Seillan also highly appreciated Viet Nam’s achievements in deploying renewable energy projects, although these sources have the drawback of intermittency. Therefore, there is a need for a stable energy reserve that can store electricity. “The Bac Ai Pumped-Storage Hydropower Plant Project provides the answer to that question.”
“With a capacity of 1,200 MW, this plant will ensure that every kilowatt of green electricity produced is delivered precisely when demand reaches its peak,” the AFD Director in Viet Nam affirmed.
In addition, the AFD Director in Viet Nam emphasized that this project is also symbolic of the support provided to Viet Nam by international organizations, including the European Union (EU), AFD, KfW, EIB, JICA, CDP, and Proparco. It demonstrates how effective close cooperation can be as the foundation for implementing a major project of such large scale.
EVN Deputy General Director Nguyen Xuan Nam speaking
Speaking at the ceremony, EVN Deputy General Director Nguyen Xuan Nam stressed that EVN recognizes its role as a core enterprise in upgrading infrastructure, modernizing the power system, and promoting investment in clean technologies. He also affirmed that the EUR 76 million loan from AFD and the support of the European Union (EU) through the ETEF program (the Energy Transition Facility between a group of European donors and EVN) clearly reflects the spirit of the Just Energy Transition Partnership (JETP) that Viet Nam is implementing with the international community.
EVN leadership highly appreciated AFD’s partnership throughout the project’s preparation and implementation, including technical cooperation support and experience sharing in technical areas, safety, environmental and social safeguards, and legal matters. EVN expressed confidence that this signing will open a new phase of deeper cooperation between EVN and AFD—particularly as Viet Nam is stepping up its climate commitments and the need to improve power infrastructure continues to grow.
AFD and EVN representatives signing the agreement, witnessed by delegates
The Bac Ai pumped-storage hydropower plant is Viet Nam’s first pumped-storage hydropower project and plays a pivotal role in ensuring security of electricity supply, improving system flexibility, and enabling the integration of an increasing share of renewable energy sources under the revised Power Development Plan VIII. Once completed, the Bac Ai Pumped-Storage Hydropower Plant will be a strategic facility supporting dispatch operations, energy storage, and balancing of the national power system.
The project not only delivers technical value but also contributes directly to the power sector’s emissions reduction objectives, in line with the Government of Viet Nam’s commitment to achieving carbon neutrality by 2050.
Bac Ai Pumped-Storage Hydropower Plant Project
Project Owner: Vietnam Electricity (EVN)
Owner’s Representative for Project Management and Operation: Power Project Management Board No. 3 (EVNPMB3)
Project Location: Bac Ai District, Ninh Thuan Province (former administrative unit)
Total Investment: Over VND 21,101 billion
Construction Start: February 2025
Expected Commissioning Schedule: Unit 1 – December 2029; Unit 2 – April 2030; Unit 3 – August 2030; Unit 4 – December 2030
Source: EVN
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