Officials of former Ninh Thuan province (which is part of Khanh Hoa province now) inspect the progress of Bac Ai pumped-storage hydropower plant. (Photo: VNA)

The central province of Khanh Hoa and relevant agencies are working closely together to ensure the progress of Bac Ai pumped-storage hydropower plant, the largest of its kind in Vietnam and Southeast Asia.

The project, which is included in the approved National Power Development Plan for 2021–2030 with a vision towards 2050, is developed to strengthen national energy security, support a circular economy and contribute to Vietnam’s commitment to achieving net-zero emissions by 2050, as pledged at the COP26 climate conference.

Located in Bac Ai Tay commune, the project is invested by Vietnam Electricity (EVN) through loans and EVN’s allocated capital. EVN has assigned Power Project Management Board No.3 and a consortium of contractors to oversee implementation, ensuring compliance with quality, progress and environmental protection requirements.

According to Power Project Management Board No.3, the plant will have a total capacity of 1,200MW with four turbines and an estimated investment of about 21.1 trillion VND (over 800 million USD). Designed to absorb surplus electricity from renewable energy projects, the facility will generate peak-load power during periods of high demand.

The first tourbine is expected to be completed in December 2029, the fourth by December 2030, and the entire project by May 2031.

During off-peak hours, excess electricity will be used to pump water from the lower reservoir on the Cai River to an upper reservoir. When demand rises, water will be released to generate electricity rapidly, helping stabilise both regional and national power systems, particularly in emergency situations.

Project leaders said the investment is financed through loans from the French Development Agency (AFD). Implementation has affected 66 households, including 57 Raglai ethnic minority households with a total of 341 residents, while 48.33 hectares of land has been recovered for construction. Compensation and support payments for all affected households were completed by the end of August 2025.

However, Khanh Hoa authorities noted that although the project brings significant benefits, several issues remain during implementation, including those regarding land clearance, construction of resettlement areas, livelihood restoration for affected communities, and mechanisms to enhance stakeholder participation.

AFD has also proposed additional support measures for ethnic minority and vulnerable households through livelihood restoration programmes, the establishment of a grievance redress mechanism, and the development of compensation policy frameworks for the 500kV transmission line connected to the project. These measures must comply with both AFD standards and Vietnam’s current regulations.

Trinh Minh Hoang, Vice Chairman of the Khanh Hoa People’s Committee, said the lender’s requirements are practical and specific, adding that provincial authorities support the proposed principles and will instruct relevant agencies to provide feedback on implementation plans.

Regarding livelihood support schemes, he urged EVN to conduct thorough consultations with affected residents to ensure the balance between policies and community interests, while helping households transition production activities and stabilise livelihoods in resettlement areas.

Recently, within the framework of the EU–Vietnam Business and Investment Forum 2026, EVN and its French partners signed two loan agreements for the Bac Ai project, each worth 76 million EUR (87.69 million USD), providing additional momentum for construction./.

VNA