WB aids Vietnam power sector reforms

Thien Thanh Sanitaryware joint company

WB aids Vietnam power sector reforms

HCMC - The World Bank (WB) has approved a US$200 million loan and a US$70 million credit for Vietnam to support power sector reforms, climate resilience, and lower carbon intensity development.

Victoria Kwakwa, World Bank Country Director for Vietnam, said in a statement that the new financial assistance would help Vietnam achieve environmentally sustainable growth in the future.

“These two operations will contribute to Vietnam’s efforts to move towards more environmentally sustainable growth as envisaged in the Socio-economic Development Plan for 2011-2015, by supporting the emergence of a more modern and efficient power market and helping Government put in place policies across several sectors to enhance the country’s climate resilience,” she said.

The US$200 million loan will be used to support the Third Power Sector Reform Development Policy Operation, which backs six policy areas including the full commercial operation of Vietnam’s competitive power generation market; the entry of new generation companies in the market; turning power generation companies into independent entities; and the implementation of regulations to move into a more transparent and predictable electricity tariff system.

This operation is the last in a series of three supporting the Government’s power sector reforms, centering on transparency and competition in the power market, and enhancing efficient use of electricity including through more market-based tariffs.

“With this operation the first phase of the reform program has been successfully completed,” says the statement.

The third Climate Change Development Policy Operation (US$70 million) will help the Government address climate change by adopting policies and strengthening institutional capacity to promote climate resilience and lower carbon intensity development.

It is the third of a series of three operations of US$70 million each, supporting three pillars, covering policies in better water management, energy efficiency, and policy and institutional development.

According to the national strategy on climate change issued by Prime Minister Nguyen Tan Dung in Decision 2139/QD-TTg on December 05, 2011, Vietnam is one of the countries most affected by climate change. The country’s Mekong Delta is one of the world’s three most vulnerable deltas to rising sea levels.

According to climate change scenarios, in the late 21st century, the nation’s yearly mean temperature would go up by 2-3 Celsius, yearly and seasonal rainfall would increase while dry season rainfall would decrease, and sea levels could rise by 75cm to 1m compared to the 1980-1999 period.

If sea levels rose by 1m, about 40% of the Mekong Delta, 11% of the Red River Delta and 3% of the country’s coastal provinces would be inundated, with over 20% of HCMC flooded; 10-12% of the population would be directly impacted and the country would lose around 10% of GDP.