Vietnam Power Sector Reform DPO2

closed

The development objective of the Second Power Sector Reform Development Policy Operation Program for Vietnam is to support the Government of Vietnam (GoV) in the design and implementation of a competitive market for electricity generation, restructuring of the power sector and reform of electricity tariffs that will facilitate effective competition, transparency and predictability to encourage generation investment, and to implement programs and incentives for efficient use of electricity. The GoV is implementing an ambitious power sector reform program to meet demand in a sustainable manner, deliver reliable and good quality electricity supply to support economic growth, while ensuring reasonable and fair revenues to investors and efficient and transparent costs to consumers. The expected outcomes of the reform program are the strengthening of electricity supply security and moving to efficient and competitive electricity prices. These outcomes are to be achieved through attracting a broader range of participants to invest in and modernize the management and operation of the electricity industry; and through the transition to electricity tariffs that, on the supply side, enable the financial viability of efficiently managed and operated companies, and on the demand side, provide pricing signals for the efficient use of electricity. The operation is consistent with the objectives of the new Country Partnership Strategy (CPS) between GoV and the World Bank for the period FY12-FY16. Linked to the CPS competitiveness pillar, it will contribute to improving economic management and business environment in the power sector, and improving the efficiency and quality of electricity infrastructure and services. Linked to the CPS sustainability pillar, the operation will contribute to climate change mitigation through tariff reform introducing efficient pricing and demand side response programs. The next operation of the program will continue to strengthen the engagement and policy dialogue between the GoV and the Bank on the design and implementation of power sector reform as a tool for sustainable development and enhancing energy efficiency.