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The Vietnam Electricity Group (EVN) and the French Development Agency (AFD) on March 28 signed an agreement on a non-sovereign loan worth 80 million EUR (87.8 million USD) to implement the southern Vietnam power distribution project invested by EVN’s subsidiary – the Southern Power Corporation (EVN SPC).
At the signing ceremony of the credit facility agreement
The southern Vietnam power distribution project comprises 33 sub-projects, located in Ben Tre, An Giang, Binh Thuan, Long An, Soc Trang, Tra Vinh, Ca Mau, Binh Phuoc, Dong Nai, Dong Thap, Bac Lieu, Kien Giang provinces and Can Tho city. These sub-projects are included in the electricity planning scheme for 2016-2025 with a vision towards 2035, approved by the Ministry of Industry and Trade.
The EVN SPC has approved feasibility reports of all the sub-projects. With combined investment capital of over 4.48 trillion VND (195.9 million USD), the sub-projects are scheduled to be implemented from 2022 to 2024.
Duong Quang Thanh, Chairman of the EVN’s Member Board, said the 80 million EUR loan is expected to help expand the southern power grid and facilitate the use of renewable energy sources that are developing strongly in southern provinces. He highlighted the active cooperation and support of the AFD and European partners, which has helped the EVN fulfill its role as the driving force of the domestic energy sector, thus contributing to the national energy transition program.
In his remarks, Director of the AFD in Vietnam Herve Conan said the power transmission project will help the EVN and Vietnam achieve the target of low-carbon emissions and sustainable development, implement the Paris agreement on climate change and fulfill its commitment of net zero emissions by 2050 made at the 26th UN Conference of Parties (COP26) in Glasgow. The signing of the credit agreement will also pave the way for future cooperation between the EVN and the AFD, not only in the field of non-sovereign finance but also at the EVN’s member companies, in electricity transmission and distribution. The AFD is committed to helping the EVN upgrade its grid and infrastructure in a smarter, more flexible and modern fashion, he stressed.
The 80 million EUR loan is expected to help expand the southern power grid
He told the Vietnam News Agency (VNA) that this project is special because it uses the non–sovereign loan with a five-year grace period and the duration of reimbursement is 15 years. Conan expressed his hope for a long-term partnership with the EVN, in line with the group’s transformation and energy transition. Since 2000, the EVN and the AFD have maintained cooperation through sovereign and non-sovereign loans for electricity projects.
The AFD has paid due attention to enhancing cooperation with the Vietnamese Government in policy dialogues regarding climate change and clean energy to help Vietnam shift towards green, low carbon growth, and respond to climate change. The agency has so far committed some 350 million EUR worth of non-sovereign loans to the EVN.
Since 2017, AFD loans have played a part in the Vietnamese group’s investment, meeting requirements for electricity supply in socio-economic development. The AFD has led the way in providing direct loans for the EVN’s power projects without the government guarantee.
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