ADB, KfW loan Vietnam $304.5 million to improve power transmission

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The agreement is expected to be signed in November, enabling NPT to deploy the project in 2016.

Part of the power transmission investment programme for the 2011-2020 period, the project with the total investment capital of $478.5 million, including an ODA loan of $304.5 million and reciprocal capital of $174 million, aims to upgrade the national power transmission network, reduce the overload of the national power grid, meet the growing electricity demand of domestic industries as well as households and expand the transmission system to mountainous regions.

The project includes 15 small projects to construct, expand and upgrade 500 kilovolt (kV) and 220 kV transmission lines connecting provinces such as Lang Son, Bac Ninh and Ha Nam in the north, Ninh Thuan and Khanh Hoa in the centre and Ho Chi Minh city, Binh Phuoc, Binh Duong, Ba Ria-Vung Tau and Tay Ninh in the south.

Of the $304.5 million loan provided in the form of ODA, the ADB provided $222.4 million as the third instalment of its power transmission investment project for the 2011-2020 period. Within the framework of the project, the ADB committed to provide Vietnam a total of $370 million in four instalments. The first loan agreement for $120.5 million was signed on February 10, 2012 and the second disbursement of $110.19 million was on December 21, 2012.

Besides, in 2006, the ADB granted the Vietnamese government $360 million for a northern power transmission expansion project aiming to upgrade the high voltage transmission network in the north and to ensure stable and effective electricity supply for local consumers.

NPT, the main investor of the power transmission investment programmes, also calls for foreign banks and international financial organisations to back other national power projects.

Notably, the World Bank (WB) has funded six power transmission projects with the total capital of $1.1 billion. In November 2014, The WB lent $500 million to the State Bank of Vietnam to fund the construction of 1,000 kilometres of power lines and apply energy-efficient technologies to the Vietnamese grid.

The French Development Agency, the Japan International Corporation Agency and the KfW have also provided significant aid to Vietnam to help the country expand and upgrade its national power grid.