ADB committed $730 mil to power transmission network


Feb 11, 2012

The Asian Development Bank (ADB) and the Government of Vietnam on February 10 signed the first tranche of a $730 million investment program to upgrade the country’s power transmission network.

The program will help improve delivery and meet growing demands from industry and households.

Signatories were State Bank of Vietnam Governor Nguyen Van Binh and ADB Vice-President Stephen P. Groff.

“To keep the economy powering forward, the country needs a stable, steady supply of electricity. Upgrades in power generation, transmission, and distribution capacity, as foreseen under the Investment Program, will remove bottlenecks, reduce transmission losses, and ensure the safety and quality of the electricity supply, allowing the lights to stay on and the economy to keep growing,” said ADB Vice-President Stephen P. Groff.

As Vietnam’s economy grows, so does demand for power. Demand is expected to continue its current growth to average 14 per cent per year from 2011-2015, and then 11 per cent per year until 2020.

Although Vietnam has made remarkable progress in expanding access to electricity, many communities – mainly in rural and mountainous areas – are not yet connected to the grid. Without additional network expansion, the share of urban and rural populations without electricity is expected to increase, particularly among populations with lower income.

The multi-tranche loan facility for the Power Transmission Investment Program begins with a first payment of $120.5 million. The program supports the construction of almost 648 kilometers of 500 kilovolt (kV) lines and more than 100 kilometers of 220 kV lines, plus upgrades to associated substations, and training and other support for the National Power Transmission Corporation.

Ensuring that the industrial sector – which consumes more than half of the country’s electrical supply – has a reliable source of power is paramount to maintaining the economic growth momentum needed for further poverty reduction.

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 scheduled for completion in 2020.



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