The French development agency AFD has signed off on a EUR24.2 million (US$26.9 million) loan for a 49MW solar project in Gia Lai Province, Vietnam, with the country’s monopoly utility EVN.

The project will be built on land that is part of the Se San 4 Hydropower Plant. The government-guaranteed loan accounts for the entire EPC contract value of the PV project.

In addition to the Se San 4 Solar Power Project, AFD is also considering continuing funding for the 1,920MW Hoa Binh Hydropower Plant Expansion Project.

Nguyen Xuan Nam, deputy general director of EVN expressed appreciation for the power project loans, noting that the government is “tightening” and is moving to stop providing guarantees for EVN’s power projects. 

He added: “Currently, EVN is having to diversify financial mobilization channels to meet the huge investment needs in the coming years.”

Vietnam plans to reduce feed-in tariff (FiT) rates for ground-mount and floating PV after solar capacity deployment exceeded expectations under the original subsidy by a factor of five. This comes under the third set of draft plans proposed by the Ministry of Industry and Trade (MOIT) earlier this month.

The Southeast Asian nation’s largest floating PV plant also bagged funding from the Asian Development Bank this month.

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