Manila  - The Asian Development Bank said Friday that it was extending a 151-million-dollar loan to help Vietnam expand and improve electricity services in poor and remote communities.

The Manila-based bank said the loan would fund a project to develop up to 10 mini-hydropower plants to serve communities in mountainous areas in north and central Vietnam.

It would also provide financial support to the government's ongoing rural electrification programme.

"Access to reliable and affordable electricity supplies will improve the quality of life and living conditions in the targeted communes and increase the time available for income generation and education," bank infrastructure specialist Edvard Baardsen said.

Vietnam's electricity coverage has surged from 51 per cent of households in 1996 to 91 per cent in 2008 as its economy boomed, the bank said. However, power investments of more than 3 billion dollars a year would still be needed over the next decade to fully electrify the country, it said.

"Funding power services in the remaining unelectrified remote areas is especially difficult because of the high cost and unattractive returns," the bank said.

The institution said its loan aims to address the financing constraint by sharing the cost of expanding the national grid with the planned mini-hydropower stations.

The loan covers 76 per cent of the projected cost of 197.6 million dollars. The balance of 46.6 million dollars is to be provided by three subsidiaries of state-owned Vietnam Electricity.

The bank said it would also provide a technical assistance grant worth 2.5 million dollars from its Climate Change Fund to support the development of a renewable energy law. (dpa)