Key Milestone in Vietnam’s Energy Transition

H.E. Julien Guerrier, Ambassador of the European Union to Vietnam and H.E Olivier Brochet, Ambassador of France, visited the site of the Ialy hydroelectric power plant, a flagship project of Vietnam's energy transition, whose expansion was financed through a Team Europe approach.

Ialy hydropower plant

Implemented between 2021 and 2024 by Electricy of Vietnam (EVN), the project aimed to expand the Ialy hydropower plant adding two 180 MW turbines, for an additional installed capacity of 360 MW. Commissioned in December 2024, these two turbines now bring the dam's total capacity to 1,080 MW.

Funded by a €74,7 million AFD loan allocated to equipment, and a €2 million European Union grant, the project is expected to be closed in 2025. The EU grant provided EVN with technical assistance to acquire international best practices in Health, Safety, and Environment (HSE) risk management, while optimizing infrastructure operation and maintenance practices, which is a prerequisite for EVN to attract international investments..

This project is a major contribution to Vietnam's energy transition. With economic growth of around 7-8% per year, the national electricity demand is expected to increase by 12-14% per year. The new Energy Development Plan (PDP8) adopted in 2025 aims to increase the current installed capacity to 236 GW by 2030. To achieve Net Zero Emissions, Vietnam plans to produce 67% of its electricity from renewable energy, including hydroelectric power, while gradually phasing out coal by 2050.

On the project site, H.E. Julien Guerrier, Ambassador of the EU, emphasized the impact of the Ialy project on the Vietnam’s energy transition: "This project will reduce CO₂ by 68,000 tons per year, while adding 360 MW of generation to the electricity grid. The European Union will continue to support the energy transition with its Member States as part of the Global Gateway strategy, and as a co-lead of the International Partner’s Group to the Just Energy Transition Partnership."

On his side, H.E Olivier Brochet, Ambassador of France, reaffirmed France's support to the “Just Energy Transition Partnership” (JETP): "With a targeted investment of €500 million to support the energy transition between 2023 and 2027, France, through the AFD, is supporting the Bac Aï project through a Team Europe approach, another flagship project expected to start this year. It will be Vietnam's first pumped-storage hydroelectric power plant project, adding 1,200 MW of electricity generation to the grid. A true accelerator of the energy transition".

This joint site visit illustrates the strength of the partnership between Team Europe and Vietnam, a partnership marked by sustainable, concrete, and useful projects for the Vietnamese.