Viet Nam has converted a large area of natural forest to the development of hydropower and promoted the forest replantation programme to compensate the loss of natural forest. However, by 2013, only 3,7% of the converted forest areas had been subject to replantation. Therefore, the research aims to review the hydropower development and forest recompensing policy, and give recommendations to improve policies. Research results in the central and central-highland provinces show that the local authorities have succeeded in collecting money from hydropower companies to allocate budget to the protection forest management boards to replant new forests on their land. But this study shows that the results achieved in forest areas, forest quality, effectiveness of forest replantation and benefits of reforestation, are modest compared with expectations. One of the most important reasons affecting the results of implementation is that the policy is not yet complete. Policy is formed mainly top-down, from central government agencies to local level.