Germany to loan $180m to fund rural electrification

Germany officially pledged itself on Monday to providing an ODA loan of 120 million euros (US$180 million) to Viet Nam for an energy efficiency project in rural areas.

This three-year project to upgrade the rural electricity grid will be funded through the German KfW Development Bank, with the Electricity of Viet Nam (EVN) group will carry out the project.

The project aims to improve and expand the rural electricity grid; reduce electricity transmission losses caused by the old grid; improve electricity provision and safety; and to ensure fair prices and good services for both rural and urban consumers.

This project will cover 2,000 communes, which are home to 2.9 million households using electricity in 45 provinces throughout the country.

With the new electricity infrastructure, electricity losses are expected to reduce from 30 to 15 per cent. This will save the country about 400 million kWh per year, around VND350-400 billion ($19-22 million) per year.

The contract is expected to be signed between the KfW and the Vietnamese Government in early 2010.

On the same day, the German-Vietnamese Development Co-operation launched a web site (www.gdc-vietnam.org) providing resources on co-operative projects and organisations of the two countries.

German Ambassador to Viet Nam Rolf Schulze said the projects were just two examples of the many way in which an open and clear bilateral relationship between Germany and Viet Nam, especially in development areas, was developing.

Tags: Vietnam electricity