$1 Billion EVN Hydropower Project Gets €430 Million Boost from Europe

Officially announced at the Global Gateway Forum in Brussels, Belgium, this support package is the culmination of collaborative efforts by “Team Europe.” The initiative brings together the European Union (EU) and leading financial institutions such as the French Development Agency (AFD), the European Investment Bank (EIB), and the German Development Bank (KfW).

This move not only demonstrates strong support for Vietnam’s energy transition but also recognizes the immense potential of the Bac Ai project in ensuring sustainable energy security.

Operational model of pumped storage hydropower (Image: Internet)

As Vietnam’s first pumped storage hydropower project, Bac Ai operates like a giant water-based “battery.” The plant consists of two reservoirs at different elevations. During periods of surplus electricity, such as at night or midday when solar power peaks, the plant uses this excess energy to pump water from the lower reservoir to the upper one, storing energy as potential power.

Conversely, during peak demand, water is released through turbines to generate electricity, swiftly supplementing the grid. This model plays a critical role in load balancing and grid stabilization, especially as the share of renewable energy sources like wind and solar continues to grow.

Outlet structure of the Bac Ai pumped storage hydropower project

With a total investment of approximately VND 21,101 billion and a capacity of 1,200 MW, the project is led by Vietnam Electricity (EVN) and is located in Bac Ai Tay Commune, Khanh Hoa Province. As of early October 2025, significant progress has been made, including the completion of main access roads and excavation of foundation pits.

To date, the construction and ventilation tunnel has been excavated and reinforced, reaching 166.5/180 meters in length

However, the project faces significant delays in underground tunnel construction due to adverse weather conditions and complex geological factors. The VH3A operational tunnel, a critical component, has been particularly affected.

In response, the project owner and contractors are mobilizing resources and implementing round-the-clock shifts to address these challenges. The goal for the final quarter of 2025 is to complete auxiliary structures and the foundation layers of key operational routes.

With guidance from EVN and additional funding from Europe, the project is moving forward to overcome obstacles, aiming to achieve first power generation by December 2029 and full completion by May 2031.