The Asian Development Bank (ADB) has approved a 28 million U.S. dollar first-stage loan for Vietnam 's Mong Duong thermal power project, said an ADB news release on Friday.
The plant will ultimately add 2,200 megawatts of generating capacity to Vietnam's electricity system.
Total ADB funding under the two-stage financing program will be 931 million dollars.
Vietnam's demand for electricity is growing at a rate of 16 percent each year. The country's continued economic development hinges on its ability to keep up with this growing demand, said the Manila-based bank.
"There is not a single example of a modern nation significantly reducing poverty without dramatically increasing its use of energy, " said the Director of ADB's Southeast Asia Department Infrastructure Division, John Cooney, adding that the only way to address the needs of the 8 million people in Vietnam is to put all of the indispensable building blocks of development in place.
Power shortages pose a serious and growing threat to Vietnam's sustained economic growth, impeding job creation, industrial activities, telecommunications and commerce, said ADB.
Power outages in Vietnam are becoming increasingly acute during the dry season due to low water levels in hydropower plants, which currently generate approximately 40 percent of Vietnam's electricity output.
"Vietnam needs to diversify its energy resources to ensure a reliable, long-term source of power to fuel the nation's development," added Cooney. "Given its availability, and the fact that it is the most affordable source of energy in northern Vietnam, where this project is located, coal is a necessary part of that mix."
A prerequisite of ADB support for the Mong Duong thermal power project was a detailed environmental impact study. In order to mitigate environmental impacts, the project will introduce circulatory fluidized bed boiler technology, which will significantly reduce emissions.
"While projects like Mong Duong are essential for Vietnam's continued growth, we recognize that greater use of clean energy, renewable energy, and increased energy efficiency are critical to Asia's longer-term development," said Cooney.
ADB is working with Vietnamese authorities to implement the country's National Program on Energy Efficiency and Conservation. Vietnam is one of six priority countries for clean energy investment assistance under ADB's one billion dollars a year energy efficiency initiative.
Source: Xinhua
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