Fabrice Richy, director of the French Development Agency (AFD) in Vietnam and Nguyen Xuan Nam, vice chairman of Electricity of Vietnam (EVN) signed a credit facility agreement for a €74.7 million ($88.6 million) non-sovereign concessional loan aiming at financing the extension of Ialy Hydropower plant, supporting Vietnam's energy transition.
|Credit facility agreement signing ceremony between EVN and AFD was formed to support the Ialy project |
The Vietnamese government expects electricity demand to increase by 6-7 per cent per year over the 2020-2030 period. To meet this demand, the increase of the installed capacity is a priority for the Vietnamese government, along with the promotion, development and optimisation of renewable energy projects.
Hence, AFD granted a €74.7 million non-sovereign concessional loan to EVN, aiming at extending the current Ialy hydropower plant capacity to 1,080MW, thanks to the installation of two additional turbines of 180MW each. The rest of the project will be financed by EVN and other credit institutions.
With no added flooded area, the Ialy hydropower plant extension project aims to take advantage of water overflows to increase electricity production but more importantly to improve peak load supply and the electricity system stability, reinforcing its availability to integrate more renewable energy. It will also contribute to replacing fossil production (estimated at 220GWh per year) and avoid 68kt of greenhouse gas emissions per year.
In parallel, the EU provides grant-based technical assistance of €2 million ($2.37 million) to EVN in support of its system and practices in the fields of health, safety and environment (HSE) and operation and maintenance (O&M). The management of this technical assistance is delegated to AFD, and benefits directly EVN and the project as a pilot application.
Fabrice Richy, director of AFD Vietnam said, “AFD is proud of being a key and long-term partner to EVN. The Ialy hydropower plant extension project will contribute to the energy transition towards low carbon and sustainable energy in Vietnam, one of the pillars of AFD’s and Team Europe’s strategy in the country. This signing witnesses the ambition of EVN to promote renewable energy and to continue looking for international supports to finance its strategic projects. AFD is looking forward to other commitments to EVN and its subsidiaries, as well as to other state-owned enterprises in Vietnam, especially through non-sovereign financing.”
Nguyen Xuan Nam, vice chairman of EVN said, “The Ialy hydropower plant extension project and other hydropower extension projects are part of EVN’s strategy towards greener and sustainable energy development, not only increasing the hydropower capacity of EVN but also the resilience and the performance of the power system, in light of the development of renewable energy capacities in the central region of Vietnam. EVN highly appreciates AFD’s support over the last 20 years of close cooperation between the two corporations, especially by means of concessional non-sovereign loans and also many valuable technical assistances to EVN.”
AFD Group is a public entity which finances, supports and expedites transitions toward a more just and sustainable world. As a French overseas aid platform for sustainable development and investment, AFD and its partners create shared solutions, with and for the people of the global south.
Active in more than 4,000 projects in the French overseas departments and some 115 countries, its teams strive to promote health, education, and gender equality and are working to protect common resources – peace, education, health, biodiversity, and a stable climate.