World Bank-supported Trung Son Project to generate 260 Megawatts of electricity and bring flood control, irrigation benefits to rural poor
WASHINGTON, DC April 26, 2011 – The World Bank Board of Executive Directors today approved a new loan of US$330 million for Vietnam to support the Trung Son Hydropower Project (TSHPP). The mid-sized multipurpose hydropower project will help meet growing domestic demand for electricity and bring flood control and irrigation benefits to rural and poor communities in Thanh Hoa province in Vietnam.
Electricity consumption in Vietnam has been growing at 15 percent annually for the past several years and Trung Son’s 260 Megawatts project will help meet the increased demand. Through the project, the World Bank will also provide technical support to 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 contribute to 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 avoiding an estimated 1 million tonnes of CO2 emissions per year,” said Victoria Kwakwa, World Bank Country Director for Vietnam.
“The World Bank’s engagement in hydropower is an integral part of its approach to development. With 1.4 billion people without access to electricity globally and the impact of climate change increasingly evident, hydropower –when done well—offers a clean, affordable and reliable source of electricity to help drive growth, poverty reduction and sustainable development,” Kwakwa said.
The TSHPP includes a robust development program to address the social impact from Trung Son’s construction and provide support to people living in the project area. This includes the construction of infrastructure: roads, power supply, water service for households, 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.
“Trung Son will be developed with the highest social and environmental standards to ensure the benefits flow to the people. Development of hydropower could have an important impact on Vietnam’s future emissions path, since the construction of Trung Son means it will avoid building new coal fired plants,” said Richard Spencer, Project Team Leader.
Hydropower is a vital source of renewable energy for many countries and Vietnam is no exception. TSHPP is the first hydropower project the World Bank has financed in the country. The financing is being provided through the IBRD* lending window—with 27 years maturity and 6 years of grace period for loan repayment.
*The World Bank’s IBRD (International Bank for Reconstruction and Development) lending window provides development financing for eligible middle-income countries.