ADB agrees $196 mln loan for Viet Nam power project

The Asian Development Bank (ADB) said Thursday it would provide Viet Nam with a $196 million loan to construct a hydroelectric facility that will help ease growing power shortages in the nation.

The 156-megawatt Song Bung 4 hydropower project will be built on the Song Bung River in the central province of Quang Nam, and construction is set for completion in 2013.

Song Bung 4 is the first hydroelectric project in Viet Nam to receive funding from a multilateral financing institution, the ADB said.

“Affordable and reliable electricity is essential to Viet Nam’s continued economic growth and poverty reduction efforts,” ADB energy specialist Pradeep Perera said in an announcement. “This project will improve the stability and reliability of the country’s power network, and will further reduce its dependency on fossil fuels.”

Four villages with 206 households will need to be relocated to nearby sites due to the project. The project will provide affected families with new homes equipped with clean water and sanitation fixtures, and enhanced livelihood opportunities. The relocated communities will have better schools and health services, as well as improved road access.

“We have held extensive consultations with these families, and we will ensure their livelihoods are improved and their cultural practices are respected,” Mr. Perera said in the announcement.

“The ADB, through the Japan Fund for Poverty Reduction, will also provide a $2 million grant to finance enhanced livelihood improvements for the 206 families that go beyond current Government practices,” he added.

Extensive efforts have also been taken to minimize the environmental impact of the project.

The project also includes a 35-kilometer, 220-kV transmission line to Nam Giang District. The total cost of the dam is $267.3 million. The balance of the funding will be provided by the Viet Nam Development Bank and Viet Nam Electricity Group.

Viet Nam has an acute need for more power generation. Electricity demand has grown at an average rate of 15% per annum and it is expected to maintain a high growth rate until 2015.

By Khanh Van

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