EU provides €430 million package to help Viet Nam advance Bac Ai pumped hydro storage project

The announcement ceremony took place on the margin of the 2nd Global Gateway Forum in Brussels, Belgium on October 9 

The Just Energy Transition Partnership, co-led by the EU and the United Kingdom, aims to accelerate the shift towards a greener, more resilient energy future in Viet Nam. The Bac Ai Pumped Hydro Storage Project will provide essential flexibility and stability to Viet Nam's power system, facilitating the large-scale integration of renewable energy and contributing to the country’s decarbonisation goals.

Commissioner Jozef Síkela said: “The Bac Ai project is a cornerstone of our joint efforts to build a cleaner, more reliable energy system that supports sustainable growth and attracts private investment. This shows Team Europe’s determination to deliver on Viet Nam's Just Energy Transition Partnership. Through Global Gateway, we are turning commitments into concrete results for people, the planet, and our shared prosperity.”

The Bac Ai Pumped Hydro Storage Project is one of the largest energy transition investments under Viet Nam’s JETP, designed to enhance grid stability and enable higher shares of renewable generation. The project exemplifies the Global Gateway approach, mobilising public and private finance, applying high standards, and building long-term partnerships to drive sustainable infrastructure investment.

The Bac Ai pumped storage hydropower plant project was listed in the National Power Development Plan for the period 2021 - 2030, with a vision to 2050 (Power Plan 8), approved by the Prime Minister.

The project has a capacity of 1,200 MW, consisting of four turbine/pump – generator/motor units, each with a capacity of 300MW.

The total investment of the Bac Ai pumped-storage hydropower plant project is approximately VND21.1 trillion (nearly $828 million), with funding arranged from loans and capital allocated by EVN.

Unit 1 is expected to be completed in December 2029, Unit 4 in December 2030, and the entire project is scheduled for completion in May 2031.

Upon completion, the project is expected to make a significant contribution to ensuring national energy security and promoting the transition to a green, sustainable economy.

Team Europe brings together the European Union, its Member States, and their development finance institutions to deliver impactful, coordinated investments under the Global Gateway strategy. For this project, Team Europe includes the European Union, AFD (Agence Française de Développement), EIB (European Investment Bank), KfW (the German development bank), CDP (Cassa Depositi e Prestiti, Italy’s national promotional institution), and PROPARCO, the private sector arm of AFD that focuses on financing sustainable private investment in developing and emerging markets.

Through Global Gateway, the European Union and Viet Nam are working together to boost sustainable, green infrastructure, and accelerate the green transition, in particular with the Just Energy Transition Partnership (JETP). Both sides are building skills and fostering growth, while safeguarding the environment. The EU’s financial commitment for 2021-2027 is at least €293 million and the EU, EIB, and the Member States, contribute over €2.8 billion to the JETP. Additional support at regional level, focuses on the green transition and sustainable connectivity, in particular support to electricity connectivity with the ASEAN Power Grid./.