ADB Signs Framework Credit Deal for Vietnam's Big Power Project

The Asian Development Bank (ADB) and the central bank of Vietnam October 9 signed a framework credit agreement worth US$931 million for Mong Duong 1 thermal power project in northern Quang Ninh province, and the loan agreement for its first-stage disbursement of US$28 million, local media reported.

 

Signatories are Ayumi Konishi, ADB’s Country Director for Vietnam and Nguyen Van Giau, the Governor of the State Bank of Vietnam.

 

A prerequisite for ADB support to the project was a detailed environmental impact study. In order to mitigate environmental impacts, the project will introduce circulatory fluidized bed boiler technology, which will significantly reduce emissions.

 

The Mong Duong 1 thermal power plant has a designed capacity of 2,200 megawatts. It is due for operation in 2012, helping ease the country’s current adverse power thirst.

 

ADB will provide credit for the project into the two stages. The second loan agreement is scheduled to be signed in next two years.

 

ADB is also working closely with Vietnamese authorities to implement the country’s National Program on Energy Efficiency and Conservation. Vietnam is one of six priority countries for clean energy investment assistance under ADB’s US$1 billion a year energy efficiency initiative.

 

Vietnam’s demand for electricity is growing at a rate of 16 per cent each year. The country’s continued economic development hinges on its ability to keep up with this growing demand, Konishi said.

 

The country, with 40 per cent of electricity output being sourced from hydropower, is estimated to lack between 4.3 billion and 10.3 billion kWh of electricity from 2007 to 2009 due to increasing demand, according to a source from the Electricity of Vietnam Group (EVN). (ADB Press Release)