Hydropower sector cautious as La Nina impact fades

After a booming 2025, the business outlook for hydropower companies in 2026 has been more subdued as the La Nina no longer maintains strong intensity.

To cope with hydrological risks, in addition to lowering profit expectations, many companies have suspended unfeasible projects and are concentrating on developing rooftop solar power and floating solar power systems on hydropower reservoirs.

Business plans for 2026 among leading hydropower companies are gradually being unveiled, with targets set defensively amid forecasts of less favourable hydrological conditions.

Many hydropower companies have suspended projects deemed unfeasible. Photo: baodauthau.vn

Vinh Son-Song Hinh Hydropower JSC estimates its total commercial power output in 2026 at around 1.92 billion kWh, down 19.2 per cent compared with 2025.

The company targets revenue of $75.48 million and after-tax profit of $23.36 million, representing declines of nearly 20 per cent and 32 per cent, respectively, compared with 2025 results.

According to Vinh Son-Song Hinh Hydropower source, hydrological conditions in 2026 are expected to be influenced by La Nina in the early months of the year before shifting towards a neutral phase, rather than sustaining the strong La Nina pattern seen in 2025.

In addition, total rainfall in the central region in 2026 is forecast to remain relatively stable.

Another hydropower firm, Hua Na Hydropower JSC, expects after-tax profit in 2026 to reach $8.23 million, significantly lower than the $19.03 million recorded in 2025, a decline of 56.7 per cent.

The company projects total power production revenue of $35.17 million, including $31.86 million from the Hua Na Hydropower Plant and $3.31 million from the Nam Non Hydropower Plant.

Regarding investment plans, Hua Na Hydropower intends to invest $23.66 million in 2026. Of this, a notable $20 million will be allocated to new projects, mainly concentrated in the third and fourth quarters of 2026. This figure will be finalised once approved by the relevant authorities.

According to documents prepared for their upcoming AGM, Thac Ba Hydropower JSC expects revenue in 2026 to reach $21.52 million, down 7 per cent from the 2025 result.

After-tax profit is projected at more than $8.84 million, a decrease of 13 per cent. Meanwhile, the target for commercial power output delivered to the grid has also been adjusted downward by 16 per cent to around 550 million kWh.

The Thac Ba Hydropower 2 venture, with a capacity of 18.9MW, has completed construction and has been in commercial operation since April 1, 2025.

The company has also completed the overhaul and upgrade of generating units H1, H2 and H3 ahead of schedule.

Although it has not yet announced its full-year business plan for 2026, Song Ba Ha Hydropower JSC has released projections for the first quarter, with revenue expected to reach $3.9 million (down 11.4 per cent on-year) and pre-tax profit projected to plunge 72 per cent to $0.7 million.

In the first quarter of 2026, Song Ba Ha Hydropower’s management outlined a key construction and investment roadmap focusing on the development of new power sources and the completion of infrastructure.

Specifically, in the renewable energy sector, the company is urgently finalising an investment proposal for a floating solar power plant on the Song Ba Ha Hydropower reservoir with a planned capacity of 220 Megawatt-peak.

At the same time, it will work closely with local authorities to accelerate legal procedures, aiming to commence construction of Song Ba Ha Hydropower Expansion Project (capacity of 30MW) in 2026 to ensure the targeted operation in 2031-2035.

According to KB Securities Vietnam, the increasing probability of the El Nino phenomenon suggests that rainfall in 2026 is likely to be lower than last year, pushing the hydropower sector into a less favourable cycle.

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