Three decades in Vietnam: AFD and Hanoi building a sustainable future

 

 

Over the past 31 years, AFD Vietnam has provided more than three billion euros ($3.5 billion) in financing to Vietnam’s public and private sectors. We have launched 120 development projects nationwide and benefited one in three Vietnamese.

This financing has delivered projects with direct impacts on local communities. AFD has supported rice, tea and coffee producers to raise output and income, helping many households move out of poverty.

In Hanoi, through public transport development, especially Metro Line No. 3 connecting Nhon to Hanoi Railway Station, AFD has improved affordable mobility for students and reduced air pollution.

We have also supported electricity generation and transmission to meet rising demand from industry and major cities. In the southernmost province of Ca Mau and the central city of Danang, the agency has backed projects that protect coastal communities by addressing climate change-driven erosion.

From the beginning, our actions have aligned closely with Vietnam’s major strategic priorities.

AFD first supported major agricultural transformations by working with the rice, coffee and tea sectors. Later, we accompanied industrial development and essential infrastructure, including irrigation, water management, industrial facilities and vocational training.

Since 2019, AFD has worked with local partners to implement a fully climate-friendly development agenda. This approach reflects commitments under the Paris Agreement and global goals on energy transition, economic de-carbonization and biodiversity protection.

In 2025, within the global strategic partnership between France and Vietnam, we repositioned our operations to support major connectivity projects as the country enters a “new era” of development.

AFD and Hanoi have built a close partnership for more than 20 years. During the October 2024 visit to France by Party General Secretary To Lam, AFD and the Hanoi People’s Committee renewed their memorandum of understanding.

The agreement places strong emphasis on urban mobility, air quality and urban development.

The Metro Line No. 3 project, as a flagship urban green transition project, has received AFD support since its early stages, alongside several European partners.

As a symbol of the sustainable future of the Franco-Vietnamese partnership, the line will reach full completion in 2028. It will provide Hanoi residents with safe, efficient, affordable and sustainable public transport while cutting pollution.

With funding from the European Union, AFD also assists Hanoi in preparing the extension of Metro Line No. 3 from Hanoi Railway Station to Hoang Mai Ward in the south. This 8.5-kilometer extension could receive co-financing from the Asian Development Bank, German financial institute KfW Group and AFD.

AFD is also studying a new urban initiative called “Hanoi Sustainable Mobility”. The project plans six intermodal exchange hubs along the Metro Line No. 3 to ease passenger transfers and improve connections among metro, buses, taxis and two-wheeled vehicles. The project could start as early as 2028 after preparatory studies conclude.

Finally, AFD supports the creation of an ASEAN air quality observatory led by the Research Institute for Development. Major Vietnamese cities, including Hanoi and Ho Chi Minh City, will receive new monitoring stations to identify the composition and sources of PM2.5 particles. This data will help Hanoi refine its air pollution control strategy.

Within the global strategic partnership, AFD will continue to support Vietnam’s resilient, low-carbon development toward high-income status by 2045. We will strengthen funding for energy, transport and climate adaptation at the provincial level.

In energy, Vietnam’s annual economic growth of 7%-8% will push electricity demand up by more than 12% each year. To meet this need, AFD implements France’s commitment under the Just Energy Transition Partnership (JETP), which includes 500 million euros ($585 million) for Vietnam’s energy transition. Since 2022, we have already financed half of this amount.

We aim to maintain this momentum through projects such as the Bac Ai Pumped-Storage Hydropower Plant. Under a Team Europe approach and with strong European Union support, the project should add 1,200 MW in the coming years. Other initiatives, especially in power transmission, may follow.

In transport, through the EU Transport Facility, AFD supports rail de-carbonization, inland waterways and urban mobility within the Team Europe framework.

In the rail sector, the agency has mobilized National Company of French Railways (SNCF) to support Vietnam’s capacity building for high-speed rail and line electrification. We may also support the rehabilitation of the Hanoi-Haiphong line, and of course, the extension of Hanoi’s Metro Line No. 3 as mentioned.

AFD will continue to help provinces adapt to climate change, with a focus on flooding, marine inundation and coastal erosion, in cooperation with the European Union and the Water and Natural Resources Management (WARM) Facility. New projects may emerge in provinces such as Vinh Long and Dien Bien.

Hanoi reflects the transformation of a thousand-year-old capital into a smart, creative and sustainable metropolis. The city has invested heavily in digital technologies to improve urban management, from transport to energy, while encouraging citizen participation through connected platforms.

Hanoi also prioritizes sustainability by expanding public transport, green spaces and climate solutions. The growing metro network, improved building energy efficiency and promotion of soft mobility show the city’s drive to balance modernization with environmental care.

International partnerships, including the one with AFD, strengthen these efforts and support innovation across the city. By combining tradition, innovation and responsibility, Hanoi sets an example for future cities.

As part of Hanoi’s socio-economic development strategy, AFD remains committed to supporting public transport and key development priorities. We have mobilized funding and technical assistance for Metro Line No. 3, its extension and air quality management.

At the same time, we hope to extend our support to Hanoi’s plans in electrifying buses, taxis and two-wheelers in the near term, with low-emission zones planned in inner areas.

Hanoi also shows strong cultural and artistic energy, driven largely by its young talent. On the cultural front, AFD contributes to the friendship between France and Vietnam in Hanoi.

In November 2024, the agency presented Hanoi with the artwork Metis, a sculpture symbolizing a melting tram titled “It is 5 o’clock, Hanoi wakes up”. The city has installed the work in the lobby of Cau Giay Station on Metro Line No. 3.

We have also supported Hanoi, together with the Ile-de-France Region, in creating a heritage tourism trail in Hoan Kiem Ward that highlights French architecture.

These efforts together help shape Hanoi into a smart, modern, creative and sustainable metropolis rooted in history and tradition.