The World Bank and the State Bank of Vietnam signed Tuesday the financing agreement and related documents for US$330 million to support Trung Son, the first hydropower project the WB has financed in the country over the past decade.
Ms. Victoria Kwakwa, World Bank Country Director for Vietnam, and State Bank Governor Nguyen Van Giau did the signing in Hanoi.
Victoria Kwakwa (front, L), World Bank Country Director for Vietnam, shakes hands with State Bank Governor Nguyen Van Giau after signing the financing agreement in Hanoi June 28, 2011 (Photo: Hong Ngan)
The WB this April approved the 260-Megawatt project, located in the northern province of Thanh Hoa.
The mid-sized hydropower project is designed to help meet growing domestic demand for electricity and bring flood control and irrigation benefits to rural and poor communities in the province in Vietnam.
It also marks the WB’s return to funding energy generation in Vietnam, the international lender said in a statement Tuesday.
The WB added that through the project, it would also provide technical support to State utility Vietnam Electricity (EVN) in improving the performance of its hydropower projects in dam safety and operations, as well as in adopting international standards in social and environmental practices.
“Trung Son will help improve Vietnam’s energy mix and energy security as part of the least cost solution in meeting the country’s energy needs. Furthermore, it will also contribute to the climate change agenda by generating clean energy and avoiding an estimated one million tons of carbon dioxide emissions per year,” the WB’s Kwakwa said in the statement.
“Hydropower – when done well – offers a clean, affordable and reliable source of electricity to help drive growth, poverty reduction and sustainable development,” she said.
“Through this project, we are expected to help provide technical support in improving the performance of its hydropower projects in dam safety and operations as well as in adopting international standards in social and environmental practices.”
Trung Son Hydropower includes a robust development program to address the social impact from the dam’s construction and provide support to people living in the project area, according to the international lender.
The WB says it includes the construction of infrastructure: roads, power supply, and water service for households, health, irrigation, schools and housing in the resettlement areas. In addition, an environmental management plan has been put in place to address the preservation and mitigation measures of three natural reserves of high biodiversity surrounding the project site.