German bank makes loans for rural power

Electricity of Viet Nam (EVN) and Germany’s Reconstruction Credit Institute (KfW) initiated a 162 million euro (US$207 million) project to increase energy effectiveness in rural areas.

EVN’s General Director Pham Le Thanh described the event as a turning point in Vietnamese and German relations, specifically regarding the electricity sector. “With the country’s strong economic growth rate, electricity demand has annually increased from 13 to 15 per cent over the past years. Consequently, EVN mobilised $4-5 billion annually to invest in power projects,” he said.

In an effort to improve low- and medium-pressure electricity grids, the project will target 26 provinces across Viet Nam until 2013. The project intends to minimise electricity losses, improve electricity supply quality and ensure power grid safety in rural areas.

EVN initially invested 120 million euros ($153 million) of preferential loans from the German Government and then invested an additional 42 million euros ($53 million). Prime Minister Nguyen Tan Dung approved the use of the development loans, marking the first time EVN borrowed money directly from KfW.The loan has a 4-year-term that will end in June 2014 and the debt is to be settled within nine years. – VNS

Tags: Electricity of Viet Nam, Germany's Reconstruction Credit Institute

Posted by VBN on Sep 9 2010. Filed under Banking-Finance, Energy. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry