Viet Nam’s gross domestic product (GDP) had grown at an average of 7.5% per annum over 1996–2006 and reached 8.2% in 2006. Building on this remarkable performance, the government was determined to maintain a high economic growth of 8.0%–8.5% in 2006–2010 to reduce poverty to 11%–15% by 2010.
Huge increases in electricity demand, averaging more than 13% annually in 2001-2008, had accompanied the rapid economic growth of the People’s Republic of China (PRC) in the years leading to the project appraisal in 2009. As supply could not keep pace with demand, power shortages became rampant in some areas.
Despite remarkable progress during the previous decade, only about a third of Bangladesh’s households had access to electricity in 2005. The country had been suffering from unreliable power supply because of insufficient generation capacity, an inadequate transmission grid, and unbalanced distribution facilities.