EVN inks French loan worth 80 million EUR hinh anh 1The signing ceremony of the credit facility agreement (Photo: VietnamPlus)
Hanoi (VNA) – The Vietnam Electricity (EVN) and the French Development Agency (AFD) have signed an agreement on a non-sovereign loan worth 80 million EUR (87.8 million USD) to implement the southern Vietnam power distribution project invested by the former's subsidiary - Southern Power Corporation (EVNSPC).

Addressing the deal signing ceremony in Hanoi on March 28, Chairman of the EVN Members’ Council Duong Quang Thanh said to help realise Vietnam’s commitment of achieving net zero emissions by 2050, announced by Prime Minister Pham Minh Chinh at the 26th United Nations Climate Change Conference (COP26), the EVN is receiving strong cooperation and support from the AFD. It is also receiving support from other European partners to perform its leading role in the energy sector and contribute to the national energy transition.

The loan aims to help expand the southern power grid, boost the use of renewable energy sources that are developing strongly in the southern region, and help promote low-carbon development in Vietnam.

The EVN hopes for more assistance from the Government, ministries, and sectors for power generation and grid projects such as the Bac Ai hydropower plant project, the expansion of some hydropower plants, and other projects on electricity transmission and distribution, he noted.

Thanh also appreciated the AFD’s assistance for the last more than 20 years, especially its preferential non-sovereign loans and valuable technical support, pledging that his group will order the EVNSPC to properly carry out projects and use the loan effectively.

In his remarks, AFD Director in Vietnam Herve Conan said the deal will help the EVN and Vietnam as a whole in the transition to low-carbon emissions and sustainable development. It will also aid in the implementation of the Paris Agreement on climate change, and the commitment to net zero emissions by 2050 made at COP26 in Glasgow last year.

He highlighted the AFD pledges to help the EVN upgrade its hydropower, transmission and distribution infrastructure in a smarter, more flexible and modern fashion.

It will assist the EVN’s necessary transition by utilising not only French resources but also diverse experiences of other EU member countries, Conan emphasised.

The southern Vietnam power distribution project comprises 33 sub-projects, located in the provinces of Ben Tre, An Giang, Binh Thuan, Long An, Soc Trang, Tra Vinh, Ca Mau, Binh Phuoc, Dong Nai, Dong Thap, Bac Lieu, and Kien Giang, along with Can Tho city.

These sub-projects are included in the electricity development plans for 2016 - 2025 with a vision to 2035, approved by the Ministry of Industry and Trade.

With a combined investment of nearly 4.49 trillion VND (195.9 million USD), they are scheduled to be carried out from 2022 to 2024.

Once operational, they are set to help improve the power supply for the southern region, reduce power shortages and overloads in many areas, increase the transmission system’s quality and safety, and optimise local renewable energy sources.

Conan told the Vietnam News Agency that this project is special because it uses a non-sovereign loan with a five-year grace period and a reimbursement duration of 15 years.

He expressed his hope for a long-term partnership with the EVN in line with the group's transformation and energy transition orientations.

Since 2000, the EVN and the AFD have maintained cooperation through sovereign and non-sovereign loans for power projects. The latter has so far committed some 350 million EUR worth of non-sovereign loans for the Vietnamese side.

The French agency has enhanced cooperation with the Vietnamese Government in policy dialogues regarding climate change and clean energy to help the country shift towards green and low-carbon growth and respond to climate change.

AFD loans have played a part in the Vietnamese group’s investment, thus meeting electricity demand for socio-economic development./.