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Boosting the Energy transition in Vietnam: AFD supports the extension of Ialy hydropower plant
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It’s an agreement that will enrich and expand Vietnam's energy source. Fabrice Richy, AFD Director in Vietnam, and Nguyen Xuan Nam, Vice President of Vietnam Electricity (EVN), signed a credit facility agreement for a €74.7 million non-sovereign concessional loan aiming at financing the extension of Ialy Hydropower plant, thus helping support the energy transition in the country.
The Vietnamese government expects electricity demand to increase by 6-7% 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 optimization of renewable energy projects.
Increase the capacity of the Ialy plant
AFD granted a €74.7 million non-sovereign concessional loan to Vietnam Electricity (EVN), aiming at extending the current Ialy hydropower plant capacity to 1 080MV, thanks to the installation of two additional turbines of 180 MW 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 the fossil production (estimated at 220GWh/year) and avoid 68 kt of greenhouse gases emission per year.
The benefits of Team Europe’s approach
In parallel, the European Union - another strong Team Europe partner of Vietnam in the energy sector - provides a grant-based technical assistance of €2 million to EVN in support of EVN’s system and practices in the fields of Health, Safety and Environment (HSE) and Operation & Maintenance (O&M). The management of this technical assistance is delegated to AFD, and benefits directly EVN and the Project as a pilot application.
A long-standing partnership between EVN and AFD
“The Ialy hydropower plant extension project and other hydropower extension projects are part of EVN’s strategy towards greener and sustainable energy development. This will not only increase 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,” said Nguyen Xuan Nam, EVN Vice President. “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”.
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.”