France pledges $550 million to advance Vietnam’s energy transition

France will provide $550 million to help Vietnam expand clean energy and low-emission transport projects, reinforcing bilateral cooperation under the Just Energy Transition Partnership (JETP). 

The announcement was made by French Ambassador Olivier Brochet at an event in Hanoi on October 24, marking three decades of the French Development Agency (AFD) in Vietnam.

Ambassador Brochet said that more than half of the pledged amount has already been deployed through AFD-led JETP initiatives. He added that France and AFD will continue working with Vietnam to achieve its long-term climate goals, including net-zero emissions by 2050.

Since beginning operations in Vietnam, AFD has financed nearly 120 projects worth over $3.3 billion, supporting infrastructure upgrades, renewable energy, and climate resilience. Following the recent elevation of Vietnam–France relations to a comprehensive strategic partnership, AFD plans to strengthen its support for the country’s low-carbon growth and climate adaptation agenda. The agency’s long-term vision is to help Vietnam become a high-income, net-zero economy between 2045 and 2050.

AFD’s upcoming strategy will focus on three main areas: sustainable energy, low-emission transport, and climate adaptation. Brochet confirmed that all new projects will align with the Paris Agreement and the United Nations Sustainable Development Goals.

Julien Seillan, AFD’s country director in Vietnam, praised the nation’s transformation over the past three decades, calling it a remarkable achievement. He said AFD remains committed to supporting Vietnam’s sustainable and inclusive growth in the years ahead.

Vietnam’s renewable energy growth has been among the fastest in Southeast Asia. Between 2018 and 2023, solar and wind capacity rose from almost zero to more than 21,000 MW, driven by attractive feed-in tariffs (FiTs) that brought in billions in private investment. About 58% of this came from domestic investors, while 27% involved joint ventures between local and foreign firms.

Leading international participants in Vietnam’s solar market include B. Grimm Power (Thailand), Trina Solar (China), JA Solar (China), Sunseap International (Singapore), Tata Power (India), Gulf Energy Development (Thailand), and ACWA Power (Saudi Arabia). In wind power, major developers include GE Renewable Energy (USA), Mainstream Renewable Power (Ireland), Siemens Gamesa (Germany/Spain), and The Blue Circle (Singapore/France).

Despite strong growth, Vietnam’s clean energy sector faces several hurdles. The power grid has not kept pace with new capacity, leading to curtailment of renewable output. Policy delays and regulatory uncertainty, especially around tariff reforms and power purchase agreements, have slowed new investment. Financial pressure on the state utility, EVN, has also increased, as it pays high fixed tariffs for renewable power while facing limits on raising retail prices.