EVN and AFD signed a loan of 80 million euros for the Southern distribution grid project

Today, EVN and the French Development Agency (AFD) signed a credit agreement for AFD’s unsecured government loan for the Southern distribution grid project invested by EVNSPC.

At the signing ceremony, Mr. Herve Conan, Director of AFD in Vietnam said: “The project type will help EVN and Vietnam achieve their goals of low-carbon transition and sustainable development, as well as the implementation of the Paris Agreement on climate change and commitments to net zero carbon emissions by 2020. 2050 within the framework of the COP 26 Global Climate Conference in Glasgow.

The impacts in terms of reducing greenhouse gas emissions are enormous if we look at the ability of these new lines to release renewable capacity into the national grid. Today’s signing will also pave the way for future cooperation between AFD and EVN, not only by financial resources without government guarantee but also at the level of EVN’s member companies in transmission activities. electricity transmission and distribution. AFD is committed to supporting EVN in upgrading its power grid and infrastructure towards smarter, more flexible and modern“.

Mr. Duong Quang Thanh – Chairman of EVN’s Member Council said: “With the commitment of the Prime Minister of Vietnam at the COP26 Climate Change Conference on the goal that Vietnam achieves net zero carbon emissions by 2050, AFD and European partners are now actively cooperating and supporting supporting EVN to play a leading role in the energy industry, contributing to the national energy transition program in order to realize the aforesaid goal.

A loan of 80 million euros signed today between AFD and EVN aims to strengthen the Southern electricity grid system, freeing up the capacity of renewable energy sources that are growing very rapidly in the Southern provinces, contributing to the process of Energy transition and low carbon in Vietnam“.

From the early 2000s until now, EVN and AFD have cooperated through guaranteed and unsecured loans from the Government for power source and grid projects.

Electricity of Vietnam (EVN) and its member units are aggressively implementing construction investment activities to expand the electricity distribution network. Southern Electricity Corporation (EVNSPC) is investing in construction of power grid projects in the Southern region, in order to improve reliability, safety and quality of service provision.

Completing and putting into operation the component sub-projects of the projects to help improve the efficiency of electricity supply for the Southern region; reduce power shortages and overloads in many areas; improve quality, safety and reduce power loss on the transmission system, and at the same time release the capacity of some renewable energy sources in the region.

The project “Southern Distribution Network” with AFD loans includes 33 sub-projects, located in the provinces of Ben Tre, An Giang, Binh Thuan, Long An, Soc Trang, Tra Vinh, Ca Mau, Binh Phuoc, Dong Nai, French Dong Bac Lieu, Kien Giang and Can Tho city.

The subprojects are all included in the electricity development plans for the period 2016 – 2025 with a vision to 2035 approved by the Ministry of Industry and Trade. All 33 sub-projects are feasible in terms of economy and finance. Feasibility study reports of sub-projects approved by EVNSPC according to its authority. The total investment of the sub-projects is more than 4,487 billion VND. The implementation period of the sub-projects is from 2022 to 2024.

Previously, projects for the electricity distribution sector depended on the Government’s ODA/incentive loans. In recent years, the Government has advocated limiting loans through the Government to avoid increasing the burden on public debt.

In order to create favorable conditions for businesses to access loans without government guarantee, the Government issued Resolution No. 37/NQ-CP dated March 29, 2021 to remove legal obstacles related to the project. Accordingly, it is agreed that EVN will apply the on-lending mechanism of EVNSPC to EVN’s loan from AFD to invest in sub-projects under EVNSPC’s Southern distribution grid project.