Electric firms borrow $312 mln to reform sector

The Bank for Investment and Development of Vietnam will provide a US$312 million loan to the Vietnam Electricity Corporation and other state-owned power companies under an agreement signed Thursday in Hanoi with the Ministry of Finance.

The government has obtained the loan from the World Bank for use in the First Power Sector Reform Development Policy Operation Program.

The objective of the program is to support the implementation of a market for electricity generation, restructuring of the power sector and reform of tariffs that will facilitate effective competition, transparency and predictability, encourage timely generation investment, improve system operational reserve, and provide incentives for efficient use of electricity.

Vietnam is implementing an ambitious long term reform of its power sector, with the intention of discarding the model of a vertically-integrated utility owned by the state in favor of a competitive market.

The expected outcome is that the power sector will be better equipped to support economic growth and meet demand for power in terms of quantity and quality, while ensuring reasonable and fair costs to consumers, and efficiency.

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