Vietnam's 156-Megawatt Song Bung Hydroelectric Project Obtains $267 Million Finance

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Researched by Industrial Info Resources (Sugar Land, Texas)--Asian Development Bank (ADB) (Manila, Philippines), the 67-member financial institution committed to eradicating poverty in the Asia-Pacific region, approved a $196 million loan for the Song Bung 4 hydroelectric power project in Vietnam early last year. The 156-megawatt (MW) project will be constructed on the Song Bung River in the Quang Nam province. In a recent development, Electricity of Vietnam (EVN) (Hanoi, Vietnam) and Vietnam Development Bank (VDB) (Hanoi) will finance the remaining $71 million required for the hydropower project. EVN, the state-owned electric utility company, will invest $49 million in the project, while VDB has agreed to lend $22.3 million.

As part of the project, a 35-kilometer, 220-kilovolt transmission line to Thanh My in the Nam Giang district will also be laid. A 110-meter-high RCC dam with a crest length of 367 meters will be built on the Song Bung River. The project will cost $267.3 million and is expected to be completed by 2013. The project was initially planned to be operational by 2011 according to the feasibility study conducted in 2005, but is now scheduled to be commissioned two years later. The hydropower plant will be run as a peak-load facility that will result in high fluctuations of the water level near the station.

Four villages consisting of 206 families will have to be relocated to nearby sites to make space for the project. The affected families, primarily from the impoverished Co Tu ethnic minority group, will be compensated with new homes and better living conditions. ADB, in collaboration with the Japan Fund for Poverty Reduction will fund an additional $2 million to provide good infrastructure for the relocated families that will include clean water, sanitation, a road network, better schools, a health care system, agro-forestry programs, and various training programs to sustain a good livelihood. This opportunity to improve the socio-economic conditions for the uprooted community makes this a strategic investment for ADB in Vietnam.

Vietnam has been reeling under a power crisis with demand for electricity slated to grow annually at a rate of 15% until 2015. Acute power shortage is posing a threat in sustaining the country's economic growth. The project is the first of its kind in Vietnam to receive funding from a global financial institution such as ADB. The Song Bung 2 and Song Bung 5 projects, proposed to be built on the same river, are awaiting financial closure.

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