An agreement to this effect was signed in Hanoi on October 6 by Governor of the State Bank of Vietnam (SBV), Nguyen Van Giau, and the ADB Country Director for Vietnam, Ayumi Konishi.

The project, which is located in one of the poorest and most remote parts of central Vietnam, has a total investment of US$265.9 million, including US$69.9 million sourced from the Electricity of Vietnam Group (EVN).

Construction of the 156 MW plant is scheduled to commence later this year and be completed by 2013.

Mr Giau said the project will not only generate a stable source of electricity, but will also set an example for environment-sustainable and socially inclusive hydropower development.

In addition to funding the plant’s construction, the project will help improve living conditions among local ethnic minorities by building settlement areas and upgrading health care, education and transport facilities in the region.

According to SBV leaders, the ADB is the first international financial institution to finance a hydroelectric project in Vietnam. Last year, the bank also provided US$931 million for the Mong Duong 1 thermoelectric project.