During the second half of the 1990s energy demand grew 30 percent faster than GDP. Expansion of energy supply was critical for growth in agriculture and industry. Providing access to electricity to the rural poor improves health and education levels. And, providing an alternative to traditional energy sources reduces environmental degradation.
Rural Energy Project which would:
- Extend the electricity grid to 690 communes located in 32 provinces.
- Build government capacity to maintain a viable power sector in the long-term.
- Apply alternative energy sources in areas not reached by the national grid.
Around 2.7 million people in some of the poorest, rural areas of Vietnam now have a reliable electricity supply for the first time in their lives. They report higher incomes, improved health conditions, better quality of education, less time spent on housework and more business development opportunities.
Highlights:
- More than 30 percent of men and 29.8 percent of women in recently electrified rural households reporting higher incomes.
- A major increase in new small businesses and many new jobs created in newly electrified areas.
- Health clinics report better conditions for diagnosis and treatment and improved communication about community health care.
- Children studying more because of access to lighting at night.
- Government’s broader rural electrification program increased access from 50.7 percent of rural households in 1996 to 90.7 percent in 2005.
- Out of $216 million, IDA provided US$150 million in financing from 2000-2006.
- Long-term involvement in the sector and ongoing dialogue on needed reforms.
- Helped design a 10-year Master Plan for Rural Electrification that brings government, user and donor resources into one program.
- Improved management of that program.
- Assisted the government to set up technical standards for rural networks
IDA is financing the Second Rural Energy Project (US$220 million) to improve service standards and the institutional framework for delivering rural electricity. This will be followed by the planned Third Rural Energy Project (starting in 2010), to complete coverage to isolated or scattered households and communities in mountainous areas and on islands, and a Rural Distribution Project (proposed for 2008).
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