World Bank Approves Multi-Million Efficiency Fund in Vietnam
The World Bank has approved a US$449 million loan to Vietnam for a project aiming to streamline electricity distribution across the country and reduce greenhouse gas emissions.
The $800 million Distribution Efficiency Project is an effort to meet the objectives of Vietnam’s National Energy Development Strategy to 2020 by reducing investment needs in the power sector, strengthening energy security and responding to climate change.
The project covers the construction and reinforcement of electricity distribution networks, the introduction of smart grid technologies in distribution and a technical assistance and capacity building facility for the Electricity Regulatory Authority of Vietnam (ERAV) and five power companies to develop efficient electricity tariffs and design effective energy demand programs.
Along with the funding from WB, $30 million will come from the Clean Investment Fund (CTF) and $8 million will be contributed by the Australian Agency for International Development (AusAID). The remaining $313 million will come from the Vietnamese government.
According to the World Bank, the loan has an interest rate of 1.25 percent, a service charge of 0.75 percent and a 25-year repayment period with a five-year grace period.