Vietnam Electricity Group has signed a €76 million credit agreement with the French Development Agency to build the Bac Ai pumped-storage hydropower facility in Khanh Hoa province, a significant step towards increasing its energy storage capacity. The facility is the country’s first pumped-storage project and is intended to support a power system that is increasingly reliant on renewable energy.
The Bac Ai plant will have an installed capacity of 1,200 MW, generated through four 300 MW turbines, for a total investment of around VND 21.1 trillion. The Prime Minister has given in-principle approval to the project, which is being implemented by EVN through its Power Project Management Board No. 3.
The AFD loan is the first tranche of a larger financing package totalling about €480 million, secured by a consortium of six international lenders. These include European, Japanese, and multilateral development institutions that are assisting Vietnam’s energy transition.
By storing electricity during off-peak periods and releasing it during peak demand, the project will stabilise the grid and handle the variability of solar and wind power. AFD officials described Bac Ai as a critical cornerstone in ensuring reliable access to renewable electricity.
