The European Union (EU) has granted Vietnam two non-refundable aid packages worth €514 million (US$633 million) to strengthen its energy and health sectors and boost governance and its legal system, the EU said Thursday.

Official development assistance is one of Vietnam's major funding sources for infrastructure and socio-economic development. Disbursement of such funds in the first nine months of 2014 rose 10 percent from a year ago to $4.1 billion, according to Vietnamese government data.

The EU will grant €400 million to Vietnam to develop its sustainable energy sector and promote democracy while strengthening the country's legal and judicial systems up to 2020, it said in a statement.

The 28-member union will also support reform in Vietnam's health sector with three-year aid worth €114 million, starting next year, it said.

Vietnam expects to sign a free trade agreement with the EU in early 2015, Prime Minister Nguyen Tan Dung said Tuesday.

The EU is Vietnam's second-biggest trade partner. Their trade was worth €24.2 billion ($30.16 billion) last year.