EU to invest €560 million in Viet Nam with new focus on modern transport

European Commissioner for International Partnerships Jozef Síkela announced the package at the EU-Viet Nam Global Gateway Business and Investment Forum which took place in Ha Noi on March 24.

Global Gateway is the EU's positive offer to reduce the worldwide investment disparity and boost smart, clean and secure connections in digital, energy and transport sectors, and to strengthen health, education and research systems.

The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions. This approach aims to mobilize up to €400 billion in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap

Síkela said, the €560 million investment package shows how the partnership between the EU and Viet Nam delivers on what matters most: boosting economic growth while reducing pollution.

"We invest together with Vietnamese companies in sustainable, modern transport and clean energy. This is how Global Gateway turns partnership into practical results: jobs, stronger growth, a cleaner energy system and easier transport connections for the future", he shared.

The Commissioner's visit to Viet Nam comes at an important moment, following the recent upgrade of EU–Viet Nam relations to a Comprehensive Strategic Partnership. The focus now is to turn this into concrete projects and business opportunities.

Sustainable transport

The €40 million Sustainable Transport Facility launched by the EU will support Viet Nam in advancing massive public transport investment plans for the next years. It will provide European expertise, technology and know-how.

The aim is to develop at least 4 large-scale public infrastructure projects nationally or in major cities, primarily dedicated to railways, such as the Ha Noi–Ho Chi Minh City high-speed rail project, but also on inland waterways and urban mobility.

The initiative is expected to leverage more than €1 billion of concessional loans from European development banks and involve European private sector.

The EU has already collaborated with Viet Nam on modern transport, building the extension of Ha Noi's Metro Line 3, to help reduce congestion and improve mobility for citizens. Also, European companies will support the upcoming development of the Lien Chieu container port in Da Nang.

Clean energy

As a leading member of the Just Energy Transition Partnership, the EU supports Viet Nam's robust low-carbon economic growth.

European development banks signed loan agreements totaling €230 million to support Viet Nam Electricity for the Bac Ai project, Viet Nam's first pumped storage hydropower plant. The plant will act like a giant battery for the power grid, storing energy when it's abundant and releasing it when it's needed most, delivering clean, reliable electricity to communities.

The signed investment is part of a comprehensive package close to €400 million delivered in a Team Europe approach, bringing together the European Commission, AFD (Agence Française de Développement), PROPARCO, Cassa Depositi e Prestiti (Italy's national promotional institution), the European Investment Bank, and KfW (the German development bank).

The EU is also working with Viet Nam under regional cooperation initiatives such as ASEAN Power Grid to promote energy resilience across Southeast Asia.

Further announcements include:

(i) a €23 million top-up of the Energy Transition Facility to boost investments in clean energy, sharing European expertise, technology and know-how;

(ii) a €20 million sustainable forest management program;

(iii) a €50 million program with Germany and France to develop Technical and Vocational Education and Training centers of excellence and enhance green and digital skills for Vietnamese people to succeed in today's jobs.

Business and investment deals

The forum saw a number of deals between European and Vietnamese businesses announced, with total investments in the areas of transport and connectivity, logistics, digital health and industrial development.

In addition, the European Investment Bank (EIB) Global and Viet Nam's leading private bank Techcombank announced a €200 million financing agreement to support the Vietnamese private sector's projects, particularly on solar and wind power, energy efficiency improvements and electric mobility./.