World Bank approves $500 mln loan for Vietnam's electrical grid

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The loan aims to build more than 1,000 kilometers of transmission lines and implement smart technologies to improve the nation's electricity grid

Two workers work on power lines in Hanoi. Photo: Ngoc Thang
The World Bank has approved a loan of US$500 million to the Vietnamese government to improve the capacity and efficiency of electrical transmission to areas that are key to the country’s economic development.
Those areas include the expanded areas of Hanoi and Ho Chi Minh City, the Mekong Delta region, and the central region.
The project will finance transmission lines and substations with 220 and 500 kilovolt capacities to increase the transmission capacity and reliability of the grid, the World Bank said in a recent statement.
It will finance about 15 percent of Vietnam’s transmission network growth during the 2015-2020 period, targeting key investment needs in major economic development areas where transmission overloads are already present or are expected in the very short term.
In addition, the project will support Smart Grid technologies for monitoring, controlling, and protecting equipment to improve reliability and reduce electricity outages.
At the same time, the project will also help build the capacity of the National Power Transmission Company by supporting its operational and financial independence, in line with the power sector reforms program, which envisions a competitive pilot wholesale market by next year.
The total financing requirement of the project is estimated at $731.25 million, of which $500 million will be funded by the International Bank for Reconstruction and Development, the World Bank’s lending arm for middle-income countries. The remaining $231.25 million will be financed by Vietnam.

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