Vietnam Electricity (EVN) has called on lenders to accelerate loan disbursements and conclude outstanding credit agreements for the Bac Ai pumped storage hydropower project in Vietnam’s Khanh Hoa province.
At a meeting in Hanoi on 10 November, EVN and financing institutions discussed financial, environmental and social requirements that must be met before the first loan disbursements. These included the project’s biodiversity action plan and environmental management and monitoring arrangements.
EVN deputy general director Nguyen Dinh Phuoc asked AFD, Proparco and CDP, which have already signed credit agreements with the utility, to consider allowing their loans to be disbursed independently. This would help reimburse expenditure EVN has financed from its own resources.
The meeting also involved representatives from KfW, the Japan International Cooperation Agency, the European Investment Bank and the European Union delegation.
Providing a construction update, EVN deputy general director Pham Hong Phuong said the main project components were generally progressing according to plan. However, complex geology at the VH3A tunnel had presented the largest construction challenge.
The contractor has completed excavation and reinforcement through a geological fault zone and is allocating resources to recover delays. Seven construction teams will work simultaneously during the remaining months of 2026, concentrating on tunnel excavation, powerhouse foundation excavation and completion of the VH1, VH2 and VH3A construction roads. These works are intended to provide access and establish the conditions needed to begin reservoir construction around February 2027.
EVN is also coordinating with Khanh Hoa’s provincial authorities on biodiversity compensation, reforestation, forest environmental service payments, compensation and resettlement support.
The utility signed an electromechanical equipment supply contract with a consortium of Voith Hydro Shanghai and PowerChina Zhongnan on 26 October. EVN identified this contract and the ongoing construction package as critical to the overall project schedule.
Phuong said timely financing disbursement would be essential to achieving the December 2029 target for the first generating unit.
The lenders’ programme, scheduled for 9–13 November, included a site inspection and meetings with provincial authorities. It covered progress monitoring, outstanding environmental and social appraisal work, technical, financial and legal assessments, and conditions for initial disbursements.
Bac Ai will comprise four 300MW units, with total investment of approximately VND21.1 trillion. Located in Bac Ai Tay commune, the project is included in Vietnam’s Power Development Plan VIII and will provide energy storage and peak generation to support the national grid.
The remaining three units are scheduled to enter operation in April, August and December 2030.
