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The World Bank (WB) on Thursday signed two agreements with the State Bank of Vietnam to provide US$300 million in concessional loans to increase rural access to electricity, and aid the second phase of a poverty reduction project.

The WB is lending US$100 million to Vietnam’s state budget in support of phase two of the Government’s Program 135 which provides support for over 2,000 poor communes in 47 provinces.

This funding will support the Government and community efforts to reduce poverty in ethnic minority and other remote communities by equalizing access to social infrastructure and services and production support through a participatory, community driven investment approach.

The WB said Program 135 Phase 2 has funded thousands of kilometers of improved roads, rural schools, potable water supplies, improved seed and livestock, and boarding support to encourage primary school attendance.

The WB will also supply US$200 million in additional financing for the ongoing Rural Energy II project to complete 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 two million people will benefit from the original project. The benefits of electrification are well-demonstrated, both in economic terms and as direct and indirect social benefits, the WB said in a statement.

Vietnam is considered as an example of successful electrification. From 1993 to end-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.

“The World Bank is actively supporting Vietnam’s rural electrification program through a series of projects, staring with the Rural Energy Project, which expanded access to electricity to about 555,327 households in 976 communes in 32 provinces across Vietnam,” said Victoria Kwakwa, country director for the WB in Vietnam.

Once completed in 2014, she said, about four million households will receive good quality and stable access to electricity.

Source: The Saigon Times Daily