EU to invest $650mn in Vietnam for clean energy, sustainable transport projects

The announcement came during the EU-Vietnam Global Gateway Business and Investment Forum in Hanoi, where Síkela appeared alongside representatives from European companies and development banks.

Síkela said the planned investments are expected to create jobs, support green economic growth, and reduce pollution.

In the energy sector, the package will support Vietnam’s first pumped storage hydropower plant, Bac Ai, in Khanh Hoa Province.

The plant, with a capacity of 1,200 MW, is backed by nearly €230 million ($266.6 million) in loans under an agreement between state utility Vietnam Electricity, the French Development Agency, and Proparco, a development finance institution under the agency.

Bac Ai is designed to function as a large-scale energy storage system for the power grid, storing electricity when supply is abundant and releasing it during peak demand to improve the reliability of renewable energy.

The European Investment Bank has also announced a €200 million ($231.8 million) credit facility agreement with Vietnam Technological and Commercial Joint Stock Bank (Techcombank) to expand financing for private businesses, including small and medium enterprises, investing in renewable energy, energy efficiency, and electric mobility.

The funding is expected to deliver benefits such as cleaner air, lower energy costs, and job creation.

In transport, the EU plans to launch a €40-million ($46.3 million) Sustainable Transport Facility to support major public infrastructure projects across Vietnam, with a focus on railways such as the Hanoi-Ho Chi Minh City high speed rail line, inland waterways, and urban mobility.

EU cooperation in transport has already contributed to the extension of Hanoi’s metro line No. 3 and is expected to support the development of the Lien Chieu container port in Da Nang.

Additional programs include a €23-million ($26.6 million) expansion of the Energy Transition Facility, a €20-million ($23.2 million) sustainable forest management program, and a €50-million ($57.9 million) initiative with Germany and France to strengthen technical and vocational training in green and digital skills.

Síkela said the package demonstrates how the EU-Vietnam partnership can deliver tangible results, including jobs, stronger growth, a cleaner energy system, and improved transport connections.

Vietnam’s Deputy Prime Minister Ho Duc Phoc welcomed the initiatives, saying they align with the country’s sustainable development goals and its comprehensive strategic partnership with the EU.

He encouraged European businesses to invest in major projects, including international financial centers in Ho Chi Minh City and Da Nang, to support Vietnam’s green transition, digital development, and deeper integration into EU supply chains.

Síkela said Vietnam is one of the EU’s top partners in ASEAN, underlining the shared commitment to sustainable development and human-centered growth.

He added that the EU has removed 99 percent of tariffs to facilitate bilateral trade and is seeking to strengthen cooperation in investment, infrastructure, energy transition, and workforce development for a green, digital and circular economy.