August 7, 2014 – The World Bank’s Board of Executive Directors today approved a loan of US$500 million to the Government of Vietnam to improve the capacity, efficiency and reliability of electricity transmission in areas that are key to the country’s economic development, including the Greater Hanoi Area, the Greater Ho Chi Minh City Area, the Mekong Delta, and the Central Region.
The project will finance transmission lines and substations at voltage levels of 220 and 500 kilovolts to increase the transport capacity and reliability of the electric grid. It will finance about 15 percent of Vietnam’s transmission network growth from 2015 to 2020, targeting key investment needs in major economic development areas where transmission overloads are already present or will happen in the very short term.
In addition, the project will support Smart Grid technologies for monitoring, control, and protection 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 foresees a wholesale competitive market to be piloted by 2015.
The total financing requirement of the project is estimated at US$731.25 million, of which US$500 million will be funded by the International Bank for Reconstruction and Development, the World Bank Group’s lending arm for middle-income countries. The remaining US$231.25 million will be financed by the Socialist Republic of Vietnam.