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The loan is the third tranche of the 10-year Power Transmission Investment Programme, which was approved by ADB in 2011.
The agreement was signed by the governor of the State Bank of Vietnam, Le Minh Hung and ADB Country Director for Vietnam, Eric Sidgwick on October 6 in Hanoi.
According to ADB Country Director for Vietnam, Eric Sidgwick, the inadequate supply of electricity is a key bottleneck inhibiting economic growth and adversely affecting all consumer groups, especially the poor households in rural and disadvantaged areas.
"ADB’s investment programme is supporting the government to address this bottleneck by expanding transmission system capacity in time to cope with the increasing power demand driven by strong economic growth,” he said.
Tranche 3 will add 60 km of 500 kV, 64 km of 220 kV, and 3700 MVA of transmission capacity in the south, complementing the additional transmission capacity provided in northern and central regions under tranches 1 and 2 respectively. The expanded capacity will enable electricity transmission from the power plant cluster of the country's southwest region to the national grid system, and improve the reliability and stability of power supply to major economic centres in the south.
The last tranche, tranche 4, which is being prepared and is expected to be approved in 2017, will focus on a 500 kV transmission line and substations, also in the south.
Including this investment programme, the ADB has assisted Vietnam to develop transmission systems throughout the country with a total of around 1,200 kilometres of 500 kV lines and 670 kilometres of 220 kV lines, and around 10,000 MVA of 220/500 kV substations. The bank has also provided project management related capacity building support to the National Power Transmission Corporation.
“This investment programme also brings the latest and advanced technologies to upgrade the transmission system to international standards, and reduces transmission losses contributing to climate change mitigation,” added Eric Sidgwick.
Upon completion in 2020, ADB’s Power Transmission Investment Programme is expected to help Vietnam remove major bottlenecks of transmission systems in the northern, central and southern regions, promote the efficient utilisation of existing and planned power plants, and increase power availability across the country to fuel the country's fast growing economy.
