The French Development Agency (AFD) and the Vietnamese Ministry of Finance recently reached an agreement on a loan of EUR75 million for a project to build the Pleiku-Cau Bong transmission line.
The project is financed by the AFD and the Asian Development Bank (ADB).
In the morning of February 7th, 2013, Mrs Yamina Benguigui, Minister for Francophony of the Republic of France and Mr Truong Chi Trung, Vice Minister of Finances of the Socialist Republic of Vietnam signed the loan agreement in Hanoi in the presence of Mr Jean-Noël Poirier, Ambassador of France in Vietnam, and Mr Jean-Marc Gravelline, Director of the French Development Agency (AFD) in Vietnam. The loan signing was seen as an opening event to observe the Vietnam-France Cooperation Year.
The project to build the high-voltage (500kV) electric transmission line will help connect the Pleiku power network to the Cau Bong. The line is 437 km in length and passes five provinces.
According to experts, the power transmission line plays a strategic important role as it permits transmitting power from the Centre, a power generation hub, to the South, a power-consuming region with a large number of industrial zones and production facilities.
Experts said that the current power transmission network has transmission capacity of only 2,500 mW but when the project has finished, the capacity will reach 5,300 mW, and this will lower the production costs for southern producers on one hand and reduce the South’s current heavy dependence on imported coal and gas power generation.
EVN also said that the new power transmission line would considerably reduce technical losses of power during the transmission from the Centre to the South.
The project is expected to be wrapped up by 2015.
Since 2000, the AFD has committed EUR210 million to support production, transmission and supply of electricity in Vietnam through the financing of the hydropower plant of Huoi Quang, high-voltage lines in the North Vietnam as well as the rural electrification in the Mekong delta. Those projects allowed, among others, the construction of 675 km of transmission network, 6000 km of supply network and the connection of 110 000 new households. In its 2013-2015 strategy, the AFD confirmed its will to support the modernization of the electricity system in Vietnam.