HANOI - The World Bank has approved a US$500 million (S$623 million) loan to help Vietnam build and improve electricity transmission across the country, the bank said, as the Southeast Asian nation seeks faster economic growth by 2020.
The loan, funded by the International Bank for Reconstruction and Development, the World Bank's lending arm for middle-income countries, will boost transport capacity and cut power outages, the World Bank said in a statement issued in Washington on Thursday.
Areas surrounding Hanoi, Ho Chi Minh City, the Mekong Delta and the central region will benefit from the project and the funding will make up 15 per cent of Vietnam's transmission network growth in the 2015-2020 period, the Bank said.
The project requires an investment of $731.25 million, with the remaining funds coming from Vietnam, the Bank said, but did not specify the term or interest rate for the loan.
In May last year, 22 of Vietnam's southern provinces were left without power for nearly 10 hours after a tree-planting crane hit the national power grid in the region.
Vietnam, Southeast Asia's fourth-biggest electricity consumer, plans to boost economic growth to between 6.5 per cent and 7 per cent a year in the 2016-2020 period, up from expansion of 5.8 per cent projected this year, the government said.
Power demand has been rising fast, to fuel industrial growth and overall economic growth. Vietnam generated 79.3 billion kWh in the first seven months of 2014, up 11.9 per cent on an annual basis, based on government data.
Growth in the January-July period is slightly above the average rise of 10.6 per cent a year in the 2011-2013 period.