Loans power up electricity

The agreement for concessional credits of $200 million to support the second power transmission and distribution project was just signed between the World Bank and the State Bank of Vietnam.
Central bank governor Le Duc Thuy said: “This project has significant importance for the implementation of the new Electricity Law and towards achieving the economic growth and poverty reduction objectives of Vietnam.”
Experts said that the demand for electricity in Vietnam has grown at an annual rate of 10-15 per cent per annum over the last several years and is expected to continue to increase in the years to come in order to ensure the expected economic growth rate of 7-8 per cent per annum.
The Second Transmission and Distribution project will facilitate new generation capacity connected to 500kV transmission system links to eliminate power shortage, reduce the number and duration of interruptions in the 500 and 200kV transmission system and 110kV distribution systems, and improve the quality of the supply by reducing voltage excursions in the transmission system.
“Economic growth in Vietnam, spurred by the reforms of the mid 1990s, has driven strong growth in electricity demand, with the system barely able to keep pace,” said World Bank country director Klaus Rohland.
“Power demand growth has averaged 15 per cent over the period from 1995 to 2004, so in addition to adding new generation capacity, it is essential to facilitate evacuation of power from generation complexes, and improve the overall control and stability of local distribution systems,” he said.
The Second Transmission and Distribution project will spend over 85 per cent of the funds from the World Bank to expand and reinforce the existing transmission and distribution systems.
The funds will be used to build new, or reinforce existing, 500, 220 and 110kV transmission and distribution lines and substations.
The first phase of the project will support the construction of the 500/220kV 0 Mon substation and the Cai Lay to Nha Be section of 500 kV O Mon-Nha Be transmission line, including the extension of the Nha Be substation; and the 220/110/15 kV GIS substations at Binh Tan and at Hiep Binh Phuoc. Under phase 2, further transmission and distribution works will be appraised as they become ready and implemented according to the priority agreed between EVN and the World Bank. The project will reserve $21.8m of World Bank funds to support the modernisation of the electricity market and distribution system operations.


No. 753/March 20-26, 2006