Vietnam Development Bank, the state-owned lender that provides capital for public projects, on Thursday signed an agreement to lend VND5.3 trillion (US$280 million) to several major power projects.

The bank said the loan will help Electricity of Vietnam, also known as EVN, speed up its power projects, adding another 2,000 megawatts to the country’s total capacity, the Vietnam Economic Times reported.

EVN General Director Pham Le Thanh said the loan will be used mostly for site clearance and land compensation.

Parts of the funding will be earmarked for installing machinery at some power plant projects including Son La, Vietnam’s largest hydro power project to date.

The agreement takes VDB's total lending for power projects to $7.2 trillion.

Power supply has been 10-15 million kilowatt-hours short of daily demand this year and power cuts are prevalent nationwide.

EVN had said it would invest a record VND58.5 trillion ($3.16 billion) in power generation and transmission projects this year, when demand for electricity is forecast to grow 14 percent.