EU and France team up to modernise Vietnam's hydropower sector

This initiative both increases Vietnam's renewable energy capacity and aligns operational standards with global best practices and is supported by a $2.3 million grant from the EU alongside an $86 million subsidised loan from the French Development Agency (AFD). It represents the EU’s first technical assistance programme in Vietnam’s hydropower sector, marking a key milestone in Team Europe’s sustainable infrastructure cooperation strategy.

Launched in June 2021, the Ialy hydropower plant extension (HPPE) adds two 180 MW generating units, bringing its total installed capacity to 1,080 MW. This expansion is expected to reduce greenhouse gas emissions by 105,000 tonnes of CO₂ equivalent per year, contributing significantly to Vietnam’s clean energy ambition.

Ialy hydropower plant

Additionally, the technical assistance components were designed to support EVN in aligning its practices with international HSE and O&M standards. When applied at national scale, these new standards will help reduce accidents and pollution while increasing the efficiency of waste management and hydropower plant operation and maintenance. Moreover, they are prerequisites for EVN to attract further financial support from International Development Finance Institutions.

The HSE initiative has enabled EVN to significantly enhance its workplace safety culture and environmental safeguards.

During implementation, a joint French-Vietnamese expert panel conducted 11 monitoring missions to assess compliance with international HSE standards. Their real-time feedback and corrective recommendations enabled continuous improvement of EVN’s practices, ultimately establishing the Ialy HPPE as a model for HSE standards across EVN’s hydropower projects.

Based on that feedback, EVN has implemented a dedicated HSE action plan for the Ialy HPPE initiative, including improvements in hazardous material storage, introduction of emergency response protocols, and training in the proper use of personal protective equipment. Community engagement has also been enhanced through the creation of grievance mechanisms and awareness initiatives, strengthening local acceptance of the undertaking.

HSE Panel of Experts mission, together with EVN, EU and AFD at the Ialy HPPE

The second key support of the Technical Assistance project focusses on O&M processes, addressing the critical need for efficient and sustainable plant operation. This support involved detailed O&M audits at both the Ialy and Se San hydropower plants. These assessments identified strengths, weaknesses, and areas for improvement, leading to 10 specific recommendations aligned with international best practices.

The O&M component then focused on scaling up these processes at Ialy 2 Hydropower Plant and refining the tools through hands-on workshops and technical discussions. International experts worked closely with EVN engineers to ensure thorough understanding and adoption. As a result, there are stronger, more autonomous operational teams equipped with the tools and knowledge to maintain complex infrastructure to the highest standards.

During the implementation period, two study tours in France and Belgium were organised, providing EVN staff members with the opportunity to witness first-hand how European operators manage HSE risks, translating these observations into actionable lessons for Vietnam, as well as insights into the cutting-edge O&M processes.

The Ialy HPPE stands as a prime example of how international cooperation can deliver tangible, lasting improvements. The initiative has shown that targeted support, paired with strong local engagement, can drive meaningful change – not just in individual initiatives, but also in building lasting institutional capacity.

The EU and AFD have reaffirmed their commitment to supporting Vietnam’s energy transition. This initiative is only the beginning. Future ventures, such as the Bac Ai pumped storage hydropower scheme, underline the continuation of this partnership and Team Europe support for Vietnam’s energy transition under the Just Energy Transition Partnership.

As Vietnam pursues its ambitious climate goals, the EU and AFD remain strategic partners, providing technical know-how and financial resources to ensure that hydropower and other renewable sources are deployed responsibly, efficiently, and sustainably.

The success of the initiative is an illustration of what can be achieved when expertise, commitment, and vision come together. It reflects EVN’s determination to lead the way in safer renewable energy production, as well as the EU’s strategic intent to champion climate change mitigation efforts in Vietnam.

AFD and EVNNPT sign $75 million financing deal to enhance transmission grid The French Development Agency (AFD) signed a financing agreement worth €67 million ($75 million) with Vietnam National Power Transmission Corporation (EVNNPT) on May 26 to support the expansion and modernisation of power transmission grid in Vietnam.

Construction starts at Bac Ai pumped-storage hydropower plant Vietnam Electricity (EVN) held a ceremony on February 22 to kick off the construction of Phase 2 of the Bac Ai pumped-storage hydropower plant in Ninh Thuan province.

Team Europe approach can boost Vietnam’s progress Green and digital transitions offer numerous opportunities for European companies and investors. Myriam Ferran, deputy director-general for International Partnerships at the European Commission, spoke with VIR’s Thanh Van about the trend of European funding in Vietnam’s sustainable development.