Media Center

News Release

ADB Helps Viet Nam Develop Renewable Energy and Rural Electrification

HA NOI, VIET NAM (17 September 2009) – The Asian Development Bank (ADB) and the Government of Viet Nam signed today a US$151 million loan to help the country expand and improve electricity services in poor and remote communities using renewable energy.

State Bank of Viet Nam’s Governor Nguyen Van Giau represented the Government, and ADB Country Director for Viet Nam Ayumi Konishi represented ADB at the signing ceremony. Senior officials of Electricity of Viet Nam (EVN) and other government agencies were present at the ceremony.

In 2008, the electrification rate reached 91% of households in 97% of the country's communes. The Project will help the Government meet its long-term development strategy for rural electrification by increasing the number of electrified villages.

"Access to reliable and affordable electricity supplies is critical to promote pro-poor and balanced economic development of remote mountainous and poor communes," says Mr. Konishi. "In remote mountain areas, availability of electricity will not only contribute to improve the commune’s economy for better incomes and living conditions of residents but also facilitate provision of social services, such as health and education, in a more efficient manner."

The Project consists of two components. The first component will develop about 5-10 grid-connected run-of-river mini-hydropower plants in Lai Chau, Dien Bien and several other provinces in northern and central Viet Nam. Electricity connections will be provided to 25-50 villages in remote poor, ethnic minority areas, and about 100 GWh of clean renewable energy to the national grid.

The second component of the Project will support the Government's ongoing special program of supporting rural electrification of poor provinces inhabited by ethnic minorities. About 100,000 poor households in more than 1,000 villages are expected to benefit from this component.

The loan, in the form of Special Drawing Rights from the concessional Asian Development Fund, covers 76% of the project cost of $197.6 million. Additional counterpart finance totaling $46.6 million will be provided by three subsidiary companies of state utility, EVN. These three power companies will be the executing agencies for the project, which is expected to be completed by 2015.

ADB is also providing a technical assistance (TA) grant of $2.5 million, financed from the ADB-administered Climate Change Fund and from the TA Special Fund to support development of a renewable energy law and for capacity building. In addition, the Government and executing agencies will make in-kind contributions totaling $400,000.

Contacts