ADB to lend Vietnam $730m to upgrade electricity transmission system

News - Asian Development Bank (ADB) will lend Vietnam $730 million to upgrade the electricity transmission system in a bid to support the country’s economic growth.

ADB’s loan is estimated to be disbursed in four phases with the first loan worth $120.5 million from common capital sources for loan duration of 25 years. The program is expected to complete in June 2020.

The program will support construction of nearly 648 kilometres of 500 kV line and over 100 kilometres of 220 kV lines while upgrading related transformer stations. In addition, the loan will also be used to train and support Vietnam National Power Transmission Corp.

The program is expected to increase electricity consumption per capita from 985 kWh in 2010 to approximately 3,800 kWh in 2025.

According to ADB, with the double power consumption against economic growth annually since 2004 and the electricity demand expected to grow 14% per year in the next four years, ensuring the reliability in energy supply is a big challenge for Vietnam.

Since 2005, Vietnam has made efforts to increase power capacity to develop a competitive electricity market and expand ownership in the energy sector with factories gradually be transferred to independent power producers. From 2011 to 2020, about 46% of new power generation capacity will come from private and foreign organizations.