The loan will be used will be used for migration, resettlement and the manufacture of hydraulic machines for the VND37tn ($1.77bn) hydropower plant, being developed by state owned electric utility Electricity of VietNam (EVN).

The project is also expected to secure funds from EVN, commercial banks and other related resources.

EVN’s general director Pham Le Thanh said the company will invest VND80 trillion in the construction of an efficient power grid to meet the nation’s electricity demand over the next five years.

The Lai Chau hydropower project needed investments of around VND37 trillion in order to supply 4.67 billion kWh of electricity to the national power grid annually in order to help maintain the country’s economic development, Thanh said.

Construction of hydropower project began in January this year, while its first turbine group is expected to be operational by 2016 and the entire project is scheduled to be complete by 2017, reports VNS.