Viet Nam: Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (Formerly Renewable Energy for Remote Commune

Sovereign Project | 42182-013

Summary

The primary objective of the sector Project is to develop rural electrification and renewable energy in Viet Nam to benefit ethnic minority communities inhabiting remote and poorer parts of the country. The Project consists of two investment components: (i) development of mini-hydropower plants in mountain provinces, and (ii) network expansion and rehabilitation of distribution networks serving poor provinces.

Component 1 of the Project will develop about 5-10 grid-connected run-of-river mini-hydropower plants of 7.5 megawatts (MW) or less capacity, totaling 30 MW in several provinces in northern and central Viet Nam. Electricity connections will be provided to about 60-75 villages in poor, remote ethnic minority areas in northern Viet Nam, and minimum 100 gigawatt hours (GWh) of hydropower energy to the national grid.

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Project Name Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (Formerly Renewable Energy for Remote Commune
Project Number 42182-013
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Loan 2517-VIE: Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (Formerly Renewable Energy for Remote Communes Sector Project)
Asian Development Fund US$ 151.00 million
TA 7262-VIE: Capacity Building of Renewable Energy Development
Climate Change Fund US$ 1.60 million
Technical Assistance Special Fund US$ 900,000.00
Grant 0384-VIE: Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (Formerly Renewable Energy for Remote Commune
Clean Energy Fund - Multi-Donor US$ 3.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Electricity transmission and distribution - Renewable energy generation - small hydro
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The primary objective of the sector Project is to develop rural electrification and renewable energy in Viet Nam to benefit ethnic minority communities inhabiting remote and poorer parts of the country. The Project consists of two investment components: (i) development of mini-hydropower plants in mountain provinces, and (ii) network expansion and rehabilitation of distribution networks serving poor provinces.

Component 1 of the Project will develop about 5-10 grid-connected run-of-river mini-hydropower plants of 7.5 megawatts (MW) or less capacity, totaling 30 MW in several provinces in northern and central Viet Nam. Electricity connections will be provided to about 60-75 villages in poor, remote ethnic minority areas in northern Viet Nam, and minimum 100 gigawatt hours (GWh) of hydropower energy to the national grid.

Component 2 of the Project will support the Government's ongoing special program of supporting rural electrification of poor provinces inhabited by ethnic minorities. The Government requested assistance to extend this program to five provinces: Dien Bien and Lai Chau in Northern region; Tra Vinh and Soc Trang in Mekong Delta; and Quang Tri in central Viet Nam. Approximately 100,000 poor households in about 1,000 villages are expected to receive electricity under this component.

The Project will include an associated technical assistance (TA) grant for capacity building for renewable energy development.

Project Rationale and Linkage to Country/Regional Strategy

Access to electricity increased rapidly in Viet Nam from 51% of households in 1996 to more than 91% in 2008. In 2007, more than 97% of the country's communes were connected to the national grid. However, 278 communes are not yet connected. The Government's long-term development strategy for rural electrification envisages a combined effort, with EVN taking responsibility for extending the medium voltage network to rural areas, and the provincial and district authorities taking a lead role in investing and operating low voltage distribution systems in remote areas. However, recently the Government decided to transfer the development of low voltage networks to EVN to expedite the electrification of remote parts of the country populated by poor and vulnerable ethnic minorities.

Component 1 of the Project promotes the use of renewable and distributed energy sources to provide electricity to these remote communes. The development of mini-hydropower projects in remote parts of northern Viet Nam will reduce generation at polluting centralized thermal power plants, and reduce transmission and distribution losses. These mini-hydropower plants are expected to be connected to the national grid, thus providing (i) additional clean energy to the national grid, (ii) access to electricity to remote areas and (iii) a sustainable financing source for further rural electrification from revenues generated by selling electricity generated by minihydropower plants to the grid. The Project will contribute to the institutional development of renewable energy and rural electrification.

The rapid roll-out of Viet Nam's rural electrification during 1993-2005 was facilitated by (i) EVN taking responsibility for extending medium voltage lines to commune centers (i.e., a commune is an administrative entity in Viet Nam with 5-6 villages and about 1,000- 2,000 households), and (ii) local residents acting through village organizations (i.e., cooperatives) taking responsibility for the low voltage network. However, this approach has resulted in poorly constructed low voltage networks with poor service quality and high distribution losses. Many villages without electricity are officially classified as electrified when only the commune center is provided with electricity.

Component 2 of the Project is to expand the rural distribution network to connect villages without electricity and to rehabilitate the existing poorly constructed low voltage networks serving poor communes. The use of Asian Development Fund funding and concessionary onlending terms and state budget transfers from the Ministry of Finance (MOF) to regional executing agencies is justified for the Project, based on the low per capita investment and low consumer density in rural areas that result in low financial returns to the utility.

Impact Promotion of pro-poor and balanced economic development of remote mountainous communes and poor communes through the sustainable use of electricity and renewable energy in an affordable manner
Project Outcome
Description of Outcome Provision of reliable and affordable supply of electricity to remote, mountainous, and poor communes.
Progress Toward Outcome

Component 1 Mini hydropower Project Development: As of March 2015, five (05) mini hydropower projects (MHPs) (2 from CPC and 3 from NPC) are either under construction or bidding stage. All five power plants are expected to commissioning from December 2015 to June 2016.

Component 2 - Grid Network Expansion and Rehabilitation: As of March 2015, 170,000 HHs have been electrified. Thirteen (13) subprojects have been completed or almost completed. Two subprojects are under bidding and eight (08) one are under preparation of feasibility study. The completion of this grid component is expected by Q4 2015. More than 250,000 households are expected to benefit directly from the project.

Loan will be extended by 18 months, i.e. the physical completion date will be extended from 31 December 2015 to 30 June 2017, and the loan closing date from 30 June 2016 to 31 December 2017.

Implementation Progress
Description of Project Outputs

1. Installation of 5 to 10 mini-hydropower plants to electrify mountainous communes.

2. Electrification of 1,000 villages through grid expansion.

Status of Implementation Progress (Outputs, Activities, and Issues)

As of March 2015, out of eight hydropower subprojects approved by ADB, six have been recommended to proceed with implementation and commence procurement activities ( CPC is in construction phase for A Roang subproject).

As of March 2015:

- NPC Phase 1 has installed 483 km of MV network, 437 km of LV network, and 8.8 MVA of transformer capacity to provide electricity to 14,924 households in 82 communes of Dien Bien and Lai Chau provinces.

- CPC Phase 1 expands and rehabilitates 285 km of MV network, 1,435 km of LV network, and 24.3 MVA of transformer capacity to benefit 116,929 households in 263 communes in five provinces namely Quang Nam, Quang Tri, Gia Lai, Quang Ngai, Thua Thien-Hue.

- SPC completed extension of 442 km of MV, 1372 km of LV networks, and 17.6 MVA of transformer capacity to electrified 38,661 households in 168 communes in Soc Trang and Tra Vinh provinces. By 2014, a total of 500 km of MV and 1,500 km of LV network has been expanded/ rehabilitated.

Geographical Location Lai Chau and Dien Bien, Quang Nam and Hue provinces, Tra Vinh and Soc Trang provinces, Quang Tri province
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples A
Summary of Environmental and Social Aspects
Environmental Aspects

The Project will reduce global greenhouse gas emissions due to replacement of expensive thermal power generation with a renewable and clean source of energy through run-of-river mini hydropower plants.

For the proposed mini-hydropower sybprojects, adverse environmental impacts are not expected to be significant and mitigation measures will be implemented to minimize negative impacts. Although construction of the minihydropower plants and grid extension will entail vegetation loss, adverse impacts on biodiversity aer expected to be minor since the area to be cleared for each subproject is relatively small. Further, the subprojects will not be located in ecologically protected areas. Other potential impacts associated with the construction of mini-hydropower plants incldue siltation due to surface run-off and erosion of exposed areas. Operation impacts may include changes in the stream hydrological regime that could influence the aquatic systems.

Involuntary Resettlement The resettlement impacts of hydropower plant subprojects are not expected to be significant since only subprojects with IR categorization B wil be included in the Project. A short resettlement plan will be prepared in accordance with the resettlement framework for these subprojects.
Indigenous Peoples

Ethnic minorities are the major beneficiaries in the northern mountain project provinces of Dien Bien and Lai Chau where mini-hydropower subprojects are likely to be located. Lai Chau province has 14 ethnic minority groups while Dien Bien province has five ethnical minority groups. The impacts on indigeneous people due to provision of electricity are not significant in the grid extension and rehabilitation component.

An ethnic minority development framework is prepared to ensure that culurally appropriate implementation of the Project and social and economic benefits of electrification accrue to ethnic minorities and potentially adverse impacts are avoided. The EMDF supports promoting productive use of electricity and will focus on providing poor households with extra support to improve the livelihoods through opportunities with electrification. An ethnic minority development plan (EMDP) will be prepared for each mini-hydropower plant subproject. For the grid extension component, an EMDP will be prepared for each province to ensure that project benefits accrue to the ethnic minorities.

Stakeholder Communication, Participation, and Consultation
During Project Design During project preparation, poverty and social analyses were completed for one of the subprojects were completed for one of the core minihydropower subprojects in Northern Viet Nam and for several communes included in the grid extension component. The findings were incorporated in the project design to ensure that the poor are capable of benefiting from electrification. A gender strategy , prepared for the overall Project, focused on activities to ensure women benefit from electrification and the prevention of harmful impacts during construction.
During Project Implementation

The Government will ensure that the resettlement plan and the IEE will be publicly disclosed in places accessible to all affected people prior to submission to ADB for its review and approval, all in accordance with ADB's Public Communication Policy.

The Government will ensure that the gender strategy provided in the EMDP and summary poverty reduction and social strategy to maximize project benefits to women is implemented. It will include the following specific actions: (i) hold separate meetings for planning productive use of electricity component; (ii) provide capacity building training to women on productive electricity use.

Business Opportunities
Consulting Services

The executing agencies will finance the engagement of consultants which will prepare feasibility studies, detailed design documents, and bidding documents; and supervise construction. These consultants will be recruited according to Vietnamese regulations and guidelines.

Consulting services required for technical and safeguard support for subproject preparation, and capacity building will be provided through the associated TA grant (7262-VIE), administered by ADB. These consulting services will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time).

Procurement All procurement to be financed under an ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). The procurement plans are disclosed in the ADB website and being updated on a yearly basis.
Responsible ADB Officer Au Minh Tuan
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Viet Nam Resident Mission
Executing Agencies
Southern Power Corporation (Power Company 2)DANG.NGUYENTHI@HCM.VNN.VN72 Hai Ba Trung
70100 Ho Chi Minh City
Northern Power Corporation (Power Company 1)20 Tran Nguyen Han, Hanoi, Vietnam
Central Power Corporation (Power Company 3)P7PC3@DNG.VNN.VN393 Trung Nu Vuong Street, Da Nang City,
Vietnam
Timetable
Concept Clearance 15 Jul 2008
Fact Finding 10 Nov 2008 to 18 Nov 2008
MRM 08 Dec 2008
Approval 30 Mar 2009
Last Review Mission -
PDS Creation Date 05 Aug 2008
Last PDS Update 31 Mar 2015

Grant 0384-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Apr 2014 - - 31 Dec 2016 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 3.00 Cumulative Contract Awards
ADB 0.00 09 Apr 2014 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 3.00 09 Apr 2014 0.00 0.00 0%

Loan 2517-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Mar 2009 17 Sep 2009 21 Dec 2009 30 Jun 2016 31 Dec 2017 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 197.63 Cumulative Contract Awards
ADB 151.00 30 Mar 2009 119.16 0.00 80%
Counterpart 46.63 Cumulative Disbursements
Cofinancing 0.00 30 Mar 2009 82.21 0.00 55%

TA 7262-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Mar 2009 16 Mar 2010 16 Mar 2010 31 Dec 2015 30 Jun 2017 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
2,500,000.00 0.00 0.00 0.00 0.00 0.00 2,500,000.00 30 Mar 2009 1,676,579.63

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Semi-Annual Environmental Monitoring Report (January-June 2015) Environmental Monitoring Reports Jun 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Lao Cai Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Yen Bai Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Lang Son Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Dien Bien Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Ha Giang Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Lai Chau Province Combined Resettlement Plan and Indigenous Peoples Plans Apr 2015
REDNER RCSP - Supply Electricity for Unelectrified Khmer Households in Tra Vinh Province Phase 3 Using Surplus Fund Subproject: Resettlement and Ethnic Minorities Development Plan Combined Resettlement Plan and Indigenous Peoples Plans Dec 2014
REDNER RCSP - Supply Electricity for Unelectrified Khmer Households in Soc Trang Province Phase 3 Using Surplus Fund Subproject: Resettlement and Ethnic Minorities Development Plan Combined Resettlement Plan and Indigenous Peoples Plans Dec 2014
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project – Nam Nge Hydropower Plant Subproject: Resettlement Plan Resettlement Plans Nov 2014
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project – So Vin Hydropower Plant Subproject: Resettlement Plan Resettlement Plans Nov 2014
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project - A Roang Hydropower Project: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Nov 2014
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project - A Roang Hydropower Project: Environmental Monitoring Report (July-December 2013) Environmental Monitoring Reports Dec 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Tri Province Subproject - Additional Fund Resettlement Plans Dec 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Tri Province Subproject - Additional Fund Indigenous Peoples Plans/Indigenous Peoples Development Plans Dec 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Nam Cha 3 Hydropower Project Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Nam Nghe Hydropower Project Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Nam Pay Hydropower Project Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: So Vin Hydropower Project Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Chieng Pan Hydropower Project Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Nam Sai Hydropower Initial Environmental Examination Initial Environmental Examination Nov 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Dak Pring Hydropower Project Initial Environmental Examination Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Ngai Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Resettlement Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Nam Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Dien Bien Province Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Gia Lai Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Resettlement Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Ngai Province Rural Distribution Power Network Rehabilitation and Extension Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Tri Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Resettlement Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Gia Lai Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Thua Thien Hue Province Rural Distribution Power Network Rehabilition and Expansion Subproject Resettlement Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Tri Province Rural Distribution Power Network Rehabilitation and Expansion Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Nam Province Rural Distribution Power Network Rehabilition and Expansion Subproject Resettlement Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Thua Thien Hue Province Rural Distribution Power Network Rehabilition and Expansion Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Aug 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Nam Province Subproject - Additional Fund Resettlement Plans Jun 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Quang Nam Province Subproject - Additional Fund Indigenous Peoples Plans/Indigenous Peoples Development Plans Jun 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (A Roang Hydropower Project): Environmental Monitoring Report (January-June 2013) Environmental Monitoring Reports Jun 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Supply Electricity for Unelectrified Khmer Households in Tra Vinh Province - Phase 2 Subproject Resettlement Plans May 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Supply Electricity for Unelectrified Khmer Households in SocTrang Province - Phase 2 Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans May 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Supply Electricity for Unelectrified Khmer Households in Tra Vinh Province - Phase 2 Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans May 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Dak Pring Hydropower Subproject Indigenous Peoples Plans/Indigenous Peoples Development Plans Apr 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Dak Pring Hydropower Subproject Resettlement Plan Resettlement Plans Apr 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (A Roang Hydropower Project): Environmental Monitoring Report (July-December 2012) Environmental Monitoring Reports Feb 2013
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Lai Chau Subproject (Phase 2) Resettlement Plan Resettlement Plans Dec 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Dien Bien Subproject (Phase 2) Indigenous Peoples Plans/Indigenous Peoples Development Plans Dec 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Lai Chau Subproject (Phase 2) Indigenous Peoples Plans/Indigenous Peoples Development Plans Dec 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Extension and Rehabilitation of Medium and Low Voltage Network for Poor and Remote Communes in Lai Chau Province Subproject Resettlement Plans Sep 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: Dien Bien Subproject (Phase 2) Resettlement Plan Resettlement Plans Sep 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project: A Roang Hydropower Project Initial Environmental Examination Apr 2012
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communities Sector Project: Electricity Supply Project for Household With No Power Connection in Tra Vinh Province Indigenous Peoples Plans/Indigenous Peoples Development Plans Dec 2011
Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project Environmental Assessment and Review Framework Mar 2009

Evaluation Documents

See also: Independent Evaluation

No documents found.


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