A dam spillway is under construction in Gia Lai Province. The World Bank and the State Bank of Viet Nam have signed a $202 million deal to reduce Viet Nam’s reliance on hydropower and non-renewables in generating electricity. — VNA/VNS Photo Sy Huynh

HCM CITY — The State Bank of Viet Nam and the World Bank yesterday signed a concessional-credit agreement for US$202 million to increase the supply of electricity to the national grid from renewable energy sources, the latter said in a press release.

The credit, to come from the World Bank’s International Development Association, will contribute to the total investment of $ 315.77 million for the Renewable Energy Development Project. The remaining money will come from the Government, local banks, and private investors.

At the signing ceremony, the Bank’s country director in Viet Nam, Victoria Kwakwa, said: "The aim of the project is to increase the supply of electricity to the national grid from renewable energy which is important to help Viet Nam expand and diversify its sources of electricity generation and to help in Viet Nam’s efforts to reduce climate change. We will work hard with the Government, local banks and, most of all, private investors in their efforts to make this project a success."

The Renewable Energy Development Project has three components. The first is investment in renewable energy through participating commercial banks who will provide loans to eligible renewables-based projects not exceeding 30MW developed by private sponsors.

The lenders involved are Bank for Investment and Development of Viet Nam, Sai Gon Thuong Tin Joint Stock Commercial Bank, and Joint Stock Commercial Bank for Foreign Trade of Viet Nam

The second and third components will help develop the regulatory framework and capacity of Ministry of Industry and Trade and other agencies, and help develop other renewable energy projects in the future.

The Government has said the World Bank will provide the first instalment of US$20 million for the third Rural Finance Project (3rd RFP) this month.

In a report on its website, it said the money would be channelled through the Bank for Investment and Development of Viet Nam (BIDV), the project manager.

BIDV will in turn provide $12 million to eight financial institutions for lending to households and private businesses in rural areas to boost agricultural and rural development. — VNS