The World Bank approved earlier this week a new loan of US$330 million for Vietnam to support the mid-sized multipurpose Trung Son Hydropower Project (TSHPP) which will help meet growing domestic demand for electricity and bring flood control and irrigation benefits to rural and poor communities in Thanh Hoa Province.

The 260MW Trung Son hydropower project will help meet the increased demand for electricity consumption in Vietnam, which has been growing at 15 per cent annually for the past several years, according to a WB press release.

Through the project, the Bank will also provide technical support to the Electricity of Vietnam Corp (EVN) to improve 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, WB Country Director for Vietnam.

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 such as roads, power supply, water service for households, irrigation, schools and housing in the resettlement areas.

TSHPP is the first hydropower project WB has financed in the country.

The financing is being provided through the WB's International Bank for Reconstruction and Development lending window that provides development financing for eligible middle-income countries.

By Thuy Hang