The World Bank has approved a new loan of US$330 million for Vietnam to support a multipurpose hydropower project in the north-central province of Thanh Hoa.
The 260-megawatt Trung Son Hydropower Project will help meet growing local demand for power and bring flood control and irrigation benefits to rural and poor communities in Thanh Hoa, the bank said in a press release.
Through the project, the World Bank will also provide technical support to Electricity of Vietnam (EVN) in improving the performance of its hydropower projects in dam safety and operations as well as in adopting international standards in social and environmental practices, according to the release.
"Trung Son will contribute to Vietnam's energy mix and energy security as part of a low cost solution in meeting the country's energy needs. Furthermore, it will also contribute to the climate change agenda by avoiding an estimated 1 million tons of CO2 emissions per year," said Victoria Kwakwa, World Bank Country Director for Vietnam.
The Trung Son Hydropower Project includes a robust development program to address the social impact from Trung Son's construction and provide support to people living in the project area.
This includes the construction of infrastructure like roads, power stations, water plants for families, irrigation systems, schools and houses in the resettlement areas.
In addition, an environmental management plan has been put in place to address the preservation and mitigation measures of three natural reserves of high biodiversity surrounding the project site.
"Trung Son will be developed with the highest social and environmental standards to ensure the benefits flow to the people. Development of hydropower could have an important impact on Vietnam's future emissions path, since the construction of Trung Son means it will avoid building new coal fired plants," said Richard Spencer, Project Team Leader.
Work on Trung Son started in January this year. The project is slated to finish by May, 2017.
Trung Son is the first hydropower project the World Bank has financed in the country. The financing is being provided through the WB's International Bank for Reconstruction and Development lending window"”with 27 years maturity and 6 years of grace period for loan repayment.