US$200Mln Credit for Vietnam's Power Development Inked

 

SBV Governor said at the signing ceremony: “The demand for electricity in Vietnam has grown at an annual rate of 10-15 per cent per annum over the last several years and is expected to continue to increase in the years to come in order to ensure the expected economic growth rate of 7-8 per cent per annum. This project has significant importance for the implementation of the new Electricity Law in particular and to the achievements of the economic growth and poverty reduction objectives of Viet Nam.”

 

The Second Transmission and Distribution project will facilitate new generation capacity connected to 500kV transmission system links to eliminate power shortage, reduce number and duration of interruptions in the 500 and 200 kV transmission system and 110 kV distribution systems, and improve quality of supply by reducing voltage excursions in the transmission system.

 

“Economic growth in Vietnam, spurred by the reforms of the mid 1990s, has driven strong growth in electricity demand, with the system barely being able to keep pace,” said WB Vietnam Country Director Klaus Rohland. “Power demand growth has averaged 15 per cent over the period from 1995 to 2004, so in addition to adding new generation capacity, it is essential to facilitate evacuation of power from generation complexes, and improve the overall control and stability of local distribution systems.”

 

The Second Transmission and Distribution project will spend over 85 per cent of funds from the World Bank to expand and reinforce the existing transmission and distribution systems. The funds will be used to build new, or reinforce existing, 500, 220 and 110kV transmission and distribution lines and substations. The first phase of the project will support the construction of the 500/220 kV 0 Mon substation and the Cai Lay to Nha Be section of 500 kV 0 Mon - Nha Be transmission line, including extension of the Nha Be substation; and the 220/110/15 kV GIS substations at Binh Tan and at Hiep Binh Phuoc. Under Phase 2 further transmission and distribution works will be appraised as they become ready and implemented according to the priority agreed between EVN and the World Bank.

 

The project will reserve US$21.80 million of World Bank funds to support the modernization of electricity market and distribution system operations. This component consists of (i) the supply and installation of a supervisory control and data acquisition and energy management system (SCADA/EMS) for the national load dispatch center with integral market and meter management systems and the supply and installation of SCADA systems for each of the three regional load dispatch centers; (ii) replacement of the existing market system with a full-function market management system; and (iii) improving the telecommunications backbone to support the new systems.

 

The third component of the Project will provide technical assistance to support to EVN to develop its transmission business as a separate entity and establishment of an internal power market, with particular focus on: (i) enabling it to manage power market operations; (ii) reviewing future investments in transmission and regional interconnections; (iii) developing a generation expansion investment plan; (iv) preparing a business plan; and (v) providing training and support in development of a power market.