AFD to continue supporting Vietnam's energy sector

This visit was part of the preparations for the Summit on the New Global Financial Deal announced by French President Emmanuel Macron at the last G20 Summit in Indonesia, which will be held in June 2023 in Paris.

On February 17, Rioux met with Duong Quang Thanh, chairman of the Council of Members of Electricity of Vietnam (EVN), for an exchange on the issue of the Just Energy Transition Partnership (JETP). On February 18, Rioux visited the construction site of the Hoa Binh hydropower plant extension project, an emblematic projects financed by AFD in favour of the energy transition.

At COP26 in Glasgow, Vietnam committed to achieving carbon neutrality by 2050 and phasing out coal by 2040. In line with this international commitment, the country formalised the JETP in December 2022 with a group of international partners, including France.

This partnership will mobilise $15.5 billion in public and private funding over the next three to five years. Public financial contributions, including those of AFD, made available to the group of international partners are in the order of $7.75 billion.

In return, Vietnam has committed to reducing annual emissions from the electricity sector by 30 per cent and to limiting the use of fossil fuels as much as possible by promoting the development of renewable energies with quantifiable objectives.

EVN is playing a central role in Vietnam’s energy transition. In response to the country’s commitments, the group is building its energy transition roadmap, adapting its development strategy and investing in clean energy. AFD, as a trusted and long-term partner, is supporting EVN in this transformation.

Within the framework of this JETP, the AFD is leading a consortium of European donors in Europe (EIB, KfW), together with Japanese partners (Japan International Cooperation Agency), to appraise the 1200MW Bac Ai pumped storage hydroelectric power plant project.

At the meeting with AFD, Thanh told Rioux about the strategic direction of EVN, and the challenges and experiences of the group in the process of energy transition. EVN’s exchanges and sharing of experience highlighted potential areas of collaboration with AFD to meet the challenges of energy transition.

In addition to existing and future concessional financing for EVN’s projects, AFD is available to share its expertise. During Rioux’s visit, the two groups’ directors officially launched a technical cooperation programme between EVN and EDF with financial support from AFD of around €1 million ($1.06 million). This will help EVN to develop its energy transition roadmap and support innovation projects.

The two leaders then jointly visited the Hoa Binh hydropower plant expansion project (480MW), which showed EVN’s achievements in developing its largest generation assets. In addition to the additional renewable generation capacity, the project will greatly contribute to improving the functioning of the Vietnamese power system in the context of the increasing integration of renewable energy.

Rioux said, “Vietnam has a strong ambition in terms of energy and low-carbon transition, and I am honoured and proud of the partnership we have built in this field with EVN for over 20 years. In discussions with Thanh and during our visit to the Hoa Binh hydropower plant, I confirmed our commitment to provide the expertise and financing that Vietnam needs under the Just Energy Transition Partnership.”

Thanh said, “I deeply thank Rioux and the French delegation, for his visit and his special attention to the partnership relationship. On our side, we are committed to the energy transition process to meet the government’s net-zero commitments, therefore JETP has become an important strategic focus of the group."

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.

A concessional loan worth 70 million EUR (81 million USD) without government guarantee for the expanded Hoa Binh Hydropower Plant Project was inked on November 10 between the Vietnam Electricity (EVN) group and the French Development Agency (AFD).