The Asian Development Bank (ADB) will provide US$434.3 million in loan for Vietnam to fund electricity and irrigation development, the bank’s office in Manila, the Philippines announced on December 23.
Of the total capital, $360 million will help expand and upgrade 500 kilovolt (kV) and 220 kV transmission lines and associated substations in the northern part of the country, which aims to improve reliability, remove transmission bottlenecks, reduce transmission losses, and promote the efficient utilization of existing and planned power plants.
The move will enable power to be supplied to industrial zones in the region, boost job creation, improve people’s incomes, and create potentiality for power interconnection with China.
Meanwhile, the rest of US$74.3 million will be pumped into a project to improve irrigation infrastructure and management in the central region of Vietnam.
The project, which will be carried out in the regional provinces of Binh Dinh, Quang Binh, Quang Ngai, Quang Tri, Thanh Hoa, and Thua Thien Hue, will improve badly deteriorated and incomplete irrigation and drainage infrastructure, and reduce their vulnerability to natural disasters, benefiting more than 57,000 hectares of agricultural land.
It will also establish a service-oriented approach to irrigation management, enhancing the capability for irrigation service providers and setting up water user groups.
According to an initial calculation by EVN, Vietnam will need some US$1.65 billion to completely deal with power shortages in the country between 2006 and 2010. The shortages are forecast to be at least 586 million kWh next year and six billion kWh in 2010.
With the GDP growth estimated at 8 per cent in the coming years, the power industry must prepare for an increase of 16-17 per cent in demand for electricity by 2010 and the domestic power output must reach 113-119 billion kWh by the year.
Meanwhile, the Government expects to allocate a total VND18.84 billion (US$1.2 billion) sourced from bond sales in the 2003-2005 period for transport and irrigation projects.
ADB has already approved US$306.3 million in loans and US$9.78 million in technical assistance grants to Vietnam's power sector.
The bank also pledged to provide US$200 million in loans and aid packages annually for the country’s development in the 2006-08 period.
In 2006 alone, of the total US$3.748 billion in official development assistance (ODA) to Vietnam, the ABD pledged US$539 million.
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