ADB lends Vietnam US$730 million to upgrade power grid
The Asian Development Bank (ADB) on Friday (02/10/2012) signed the first tranche of a US$730 million program to upgrade Vietnam’s power transmission network to meet growing demands from industry and households.
The loan facility for the
Power Transmission Investment Program begins with the first provision of
US$120.5 million, which will be used for the construction of 648km of 500
kilovolts (kV) lines and more than 100km of 220 kV lines. It will also support
upgrades of substations and training to the National Power Transmission
Corporation. “To keep the economy
powering forward, the country needs a stable, steady supply of electricity.
Upgrades in power generation, transmission, and distribution capacity… will
remove bottlenecks and reduce transmission losses, ensure safety and quality of
electricity supply,” said ADB Vice-President Stephen P. Groff at the signing
ceremony. As Vietnam’s economy grows,
so does demand for power, surging by 14% annually. Demand is expected to
continue to grow by an average of 14% per year from 2011-2015 and then by 11%
per year until 2020. Although Vietnam has made
remarkable progress in expanding access to electricity, many communities –
mainly in the rural and mountainous areas – are not yet connected to the grid. Ensuring the industrial sector – which consumes
more than half of the country’s electrical supply – has a reliable source of
power is paramount to maintain the growth momentum of the country’s economy
needed for further poverty reduction, the regional lender said. ADB funds are
expected to be released in four tranches, with the first loan from ordinary
capital resources having a 25-year term. The program is due for completion in
2020.