French loan to facilitate renewable energy-power grid integration

The loan agreement will fund a project that aims at strengthening the power grid in the south of Vietnam and the integration of newly installed renewable energy capacities. The non-sovereign loan was pledged by AFD in 2018 to the Southern Power Corporation (EVnExpress NewsPC), an EVN subsidiary, a French embassy press release Tuesday.

Work will be carried out on nearly 540 km of distribution lines and electrical substations with a capacity of approximately 900 MVA.

The project will contribute to the connection and transmission of electricity generated by renewable energy plants, thus relieving pressure on the existing grid. It will also improve the quality of electricity supply for end users and reduce technical losses.

Around 630 MW of renewable energy is expected to be connected to the distribution network, replacing part of fossil fuel generation and helping avoid emitting nearly 500,000 tons of CO2 equivalent per year. The estimated reduction in technical losses is 151 GWh per year.

Herve Conan, Director of AFD, said it wishes to support Vietnam implement the Paris Agreement as well as the Net Zero Emissions commitment by 2050 that Vietnam made at COP26.

The loan agreement will pave the way for future collaboration between AFD and EVN, not only through non-sovereign financing but also at the level of EVN’s subsidiaries engaged in power transmission and distribution.

Over the past three years, Vietnam has increased its renewable energy capacity by 20GW, totaling nearly 25 percent of its energy mix. Nevertheless, the country lacks the transmission infrastructure to integrate this renewable energy.