The commitment reinforces European support for Vietnam’s just energy transition partnership, aimed at accelerating its move to net zero.
The European Commission has announced a €430m investment to advance the Bac Ai project, which is Vietnam’s first pumped storage hydropower plant. The deal was announced by EU commissioner Jozef Síkela and the deputy prime minister of Vietnam Bùi Thanh Sơn on the sidelines of a meeting of the EU-backed Global Gateway Forum, which aims to mobilise €300bn in investments in the digital, energy and transport sectors by 2027.
The €430m commitment was made under Vietnam’s just energy transition partnership. Co-led by the EU and the UK, this partnership focuses on accelerating the move towards a greener, more resilient energy future in Vietnam. Financial backing for the Bac Ai project from Team Europe included the European Union, the European Investment Bank and the development banks of France, Germany and Italy.
Commissioner Síkela called the Bac Ai project “a cornerstone” of Europe’s efforts to build a more reliable and greener energy system that supports both sustainable growth and attracts private investment.
“This shows Team Europe’s determination to deliver on Vietnam’s just energy transition partnership. Through Global Gateway, we are turning commitments into concrete results for people, the planet, and our shared prosperity,” Síkela said.
Vietnam, a producer of coal, natural gas and oil, relies on fossil fuels for around 80% of its primary energy mix, according to the Asia Natural Gas & Energy Association. Over the past decade, coal has become its main source of electricity generation, and now generates almost half of its power.
Once completed, the Bac Ai plant will help regulate capacity and stabilise the provision of power in the region. It will also facilitate the large-scale integration of renewable energy and contribute to the country’s decarbonisation goals.
