World Bank to offer $500m for energy efficiency improvement in Vietnam

The World Bank will provide $500m in loan to improve energy efficiency in Vietnam.

The funding will be used in the construction of more than 1,000km of transmission lines and deploy smart grid technologies to enhance reliability and electricity supply quality.

It will also back a transmission efficiency project, which is expected to improve the capacity, efficiency and reliability of electricity transmission in the areas of Greater Hanoi, the Greater Ho Chi Minh City, the Mekong Delta, and the Central Region.

The new transmission lines and substations to be built as part of the project will constitute around 15% of the estimated requirement for transmission network expansion by 2020.

World Bank Vietnam country director Victoria Kwakwa said: "Improving energy efficiency is critical for Vietnam’s ability to meet energy demand to power growth and maintain improvements in welfare.

"Energy efficiency improvements are also important for reducing Vietnam’s rapidly growing greenhouse gas emissions and contributing to climate change mitigation."

The entire project is estimated to cost $731.25m, of which $500m will come from the International Bank for Reconstruction and Development, the World Bank Group’s lending arm for middle-income countries.

The remaining $231.25m will be financed by the National Power Transmission Company, Electricity of Vietnam.