World bank funds its first Vietnam hydro project

The World Bank will lend energy-hungry Vietnam $330 million to build a hydroelectric plant, the bank said Tuesday after a signing ceremony marking its first foray into hydro power for the country.

The Washington-based lender clinched a deal with the State Bank of Vietnam for the Trung Son development in northern Thanh Hoa province.

“It is the Bank’s first hydropower project in Vietnam,” the World Bank said on its website.

“The Trung Son Hydropower Project will help Vietnam meet growing demand from households and industry for electricity,” the Bank said, citing energy consumption growth of 15 percent annually.

The mid-sized plant will have a capacity of 260 Megawatts, and is intended to be fully operational by May 2017.

Construction of new power plants has not kept pace with demand, leading to worsening blackouts, the European Chamber of Commerce in Vietnam (Eurocham) told a forum backed by the World Bank last month.

Eurocham says the price that monopoly distributor Electricity of Vietnam (EVN) pays to producers is still far below neighbouring countries, giving foreign investors no incentive to enter the sector.

The country draws more than one-third of its electricity from hydropower but is trying to diversify its energy supply through coal-fired plants and other sources, including planned nuclear stations.

Vietnam plans to put 38 power plants into operation by 2015, the EVN’s head of planning, Trinh Ngoc Khanh, was quoted as saying last week in the official Vietnam News. – AFP

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