The World Bank’s (WB) additional credits will finance infrastructure construction and the provision of essential services, including electric power with an acceptable price, to rural residents.
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The signing ceremony of credit agreements finding Program 135 and rural electrification
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Governor Nguyen Van Giau of the State Bank of Vietnam (SBV) and the WB’s Country Director Victoria Kwakwa on Thursday signed two concessional credit agreements, under which the World Bank will provide a total of US $300 million to increase rural access to electricity, and to aid in the implementation of the 2nd phase of Program 135.
As part of this package, the World Bank is providing US$ 100 million to the State budget in support of over 2,000 poor communes in 47 of 63 provinces throughout Vietnam by equalizing access to social infrastructure and services.
The World Bank is also providing US $200 million in additional financing for the ongoing Rural Energy II project.The financing would allow the completion of the original project objective and scale up what has been shown to be a viable model for rural electrification. An estimated 550,000 additional households will benefit from good quality, affordable electricity thanks to this additional financing. Besides, about 2 million people will benefit from the original project.
“Both operations reaffirm the World Bank’s strong commitment to Vietnam’s growth and poverty reduction efforts at a time when the country is confronted with adverse effects from the global economic slowdown,” said Victoria Kwakwa, Country Director for the World Bank in Vietnam.
Vietnam is considered as an example of successful electrification program. During the last 15 years, from 1993 to the end of 2008, the access rate of rural households has been steadily increased from about 14% to about 94%. On average, every day about 1,900 households have been connected to the national power grid during this period./.