The O Mon IV plant will provide a more reliable supply of power to the Mekong Delta, support expanded industrial activity, spur new livelihood opportunities, and reduce dependence on hydroelectricity tapped from other regions. It is aligned with Vietnam’s power sector development plan, which aims to more than triple energy capacity from 18,500MW in 2010 to 60,000MW by 2020.

The new combined cycle gas turbine plant is one of four being developed at the O Mon thermal power complex in Can Tho city, about 250 kilometers south of Ho Chi Minh City.

The project will save approximately 600,000 tonnes of carbon dioxide emissions a year compared to coal-based alternatives, possibly qualifying the facility for carbon credits.

O Mon IV, which is due for completion by June 2016, is projected to cost $793.5 million. Germany’s KfW Bankengruppe will contribute $370 million, with state-owned Electricity of Vietnam (EVN) and the government of Vietnam together providing almost $113.6 million.

A second plant at the O Mon thermal power complex is to be bid out to private investors, while the government of Japan is funding two others in conjunction with EVN.

The complex, which will have 3,600MW of generating capacity when complete―will also support the development of Vietnam’s offshore natural gas reserves, with a consortium of foreign and local oil companies tapping one block in the Gulf of Thailand to supply the O Mon facility.

“Vietnam’s power consumption has been growing 15 per cent a year over the past decade, and will continue rising at a double-digit pace for the foreseeable future,” said Anthony Jude, director of ADB’s Energy Division for Southeast Asia. “Vietnam desperately needs more electricity, and the additional power supply will support economic and social development in the Mekong Delta.”

Electricity has fueled Vietnam’s dramatic economic expansion over the past decade, helping slash the number of people living in poverty from 58 per cent in 1993 to 13 per cent in 2009. The growing demand for power has put a strain on existing generating capacity, however, resulting in power shortages and unstable supply during the dry season.

ADB has played a leading role in developing Vietnam’s power infrastructure, with six sovereign loans totaling over $1.7 billion, two private sector loans worth $90 million, and associated guarantees of $60 million.