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

The project includes two turbines with a combined capacity of 480MW and has a total investment of VND9.22 trillion ($406.7 million), 70 per cent of which is commercial loans, including the 70 million euro loan from the AFD and the rest from domestic commercial banks.

Once completed, the expanded plant, located in the northern province of Hoa Binh, will help increase power generation for the northern region and reduce production costs. By optimising water flows, the annual electricity output will be raised by about 495 million kWh, thus helping replace fossil fuel in power generation and cut down greenhouse gas emissions.

The new turbines will also help ease the burden on existing ones, helping increase the lifespan of the equipment and save maintenance expenses.

The project started in January this year. Its first turbine is scheduled to become operational in the second quarter of 2024 and the second turbine in the fourth quarter of the same year.

Speaking at the signing ceremony in Ha Noi, AFD Director in Vietnam Herve Conan said following the success of bilateral cooperation in renewable energy in recent years, the AFD and EVN decided to expand their partnership to the key project in energy transition in the country.

He added the loan signing matches the Vietnamese Prime Minister’s strong statements made at the 26th UN Climate Change Conference of the Parties (COP26), demonstrates the EVN’s trust in the AFD, and marks the group’s ambition to sustainably develop energy, which also suits the AFD’s strategy that all of its projects be 100 per cent compatible with the Paris Agreement. — VNS