The World Bank and the State Bank of Vietnam signed in Hanoi Tuesday a credit worth US$150 million in support of the nation’s rural electricity network expansion.
“We feel proud to be associated with one of the most successful rural electrification programs in the world, with nearly 1,800 households connected to the grid every day over the last decade” said Mr. Martin Rama, acting country director for the World Bank Vietnam.
“Meeting the growing demand for electricity in an efficient way, through investments like this one and trough an adequate institutional organization of the sector, will be critical to ensuring continued economic growth in Vietnam,” he added.
The resources, which come from the International Development Association (IDA), the WB’s concessional lending arm for low income countries, will be used for the Rural Distribution Project, according to the WB.
The project aims to improve the level of medium voltage service to targeted retail electricity distribution systems. It will achieve this though rehabilitating and increasing the capacity of existing distribution lines and sub-stations and standardizing them to 22, 35 and 110kV.
The WB adds that the project will the electricity distribution systems them to meet the growing demand more efficiently, provide better quality and quantity of electric power for productive uses, and reduce power system losses. Technical assistance will complement the physical investment by supporting the development of the PCs into modern power distribution utilities.
The total cost for this project is US$206.28 million, in which IDA will contribute US$150.00 million and the Australian Agency for International Development will provide US$3 million.
The WB Board of Directors approved the project in May this year.