EU supports Vietnam with 108 million Euros to provide electricity to rural areas

This is a technical support component for the implementation of the European Union (EU)'s 108 million Euro Energy Sector Policy Support Program.

The program aims to increase access to sustainable energy for rural areas in Vietnam and contribute to building a more sustainable energy sector by promoting energy efficiency, clean and renewable energy to the entire population.

This Technical Assistance component is co-financed by the European Union and the German Federal Ministry for Economic Cooperation and Development within the framework of the Renewable Energy and Energy Efficiency Project - Phase II, and will be implemented by the German Development Cooperation Agency (GIZ) in close coordination with the Ministry of Industry and Trade.

At the launch ceremony, Director General of the European Commission’s Directorate General for International Cooperation and Development Stefano Manservisi said that the 108 million Euro program will help the Vietnamese Government achieve the target set out in the Rural, Mountainous and Island Electricity Supply Program for the period 2013-2020, aiming to provide reliable and sustainable electricity to 1.2 million rural households. At the same time, it will help strengthen state management in the energy sector to facilitate the transition towards a more sustainable energy sector in Vietnam.

“The EU and other development partners can influence policies and solutions that contribute to a cleaner and more sustainable energy sector,” said Stefano Manservisi.

It is expected that by the end of the program, about 750 villages and hamlets will be provided with electricity, with about 60,000 households having electricity, providing electricity to 1 island district and 2 island communes.

According to Minister of Industry and Trade Tran Tuan Anh, in recent years, Vietnam's energy sector has developed very rapidly and sustainably, which is an important factor for Vietnam to maintain high socio-economic growth. In the coming time, to achieve a 1% GDP growth, the energy sector needs to achieve a growth rate of 1.7 - 2%/year. With such high energy demand, Vietnam needs to invest about 5 - 7 billion USD/year in the energy sector.

“The Vietnamese Government is committed to socio-economic development to ensure electricity supply for the whole country, including in remote areas, where 2% of rural households still do not have access to electricity. The target program on electricity supply for rural, mountainous and island areas in the period of 2016 - 2020 requires a large investment of about 1.2 billion Euros. Of which, most of the capital to implement the program is mobilized from ODA capital and foreign preferential loans,” Minister Tran Tuan Anh affirmed.

The Minister added that in this context, the Vietnamese Government welcomes the assistance of the European Union through the Multilateral Support Orientation Program for Vietnam for the period 2014 - 2020 on sustainable energy development, especially the Financial Agreement for the program to support energy development policies and enhance access to sustainable energy in rural areas signed on December 1, 2017.

It is expected that by the end of the program, about 750 villages and hamlets will be provided with electricity, with about 60,000 households having electricity, providing electricity to 1 island district and 2 island communes.

The EU’s planned grant of €346 million for Vietnam’s energy sector for the period 2014-2020 is the largest EU funding package to date for sustainable energy support in the world. This also affirms the EU’s pioneering role and commitment to further contribute to a sustainable energy sector in Vietnam, through the promotion of energy efficiency, clean energy and renewable energy.