Viet Nam: O Mon IV Combined Cycle Power Plant Project

Sovereign Project | 43400-013

Summary

The project will construct a 750-megawatt (MW) combined cycle gas turbine (CCGT) power plant at the O Mon thermal power complex. The project is in O Mon district in the city of Can Tho, about 250 kilometers south of Ho Chi Minh City. The project will help Viet Nam meet the fast-growing demand for electricity to foster socioeconomic development and industrialization in the south, particularly in the Mekong Delta. The project is part of the least-cost Seventh Master Power Development Plan approved by the Government of Viet Nam in 2011.

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Project Name O Mon IV Combined Cycle Power Plant Project
Project Number 43400-013
Country Viet Nam
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2814-VIE: O Mon 4 Combined Cycle Power Plant Project
Ordinary capital resources US$ 309.89 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector Energy - Conventional energy generation
Gender Equity and Mainstreaming Some gender elements
Description The project will construct a 750-megawatt (MW) combined cycle gas turbine (CCGT) power plant at the O Mon thermal power complex. The project is in O Mon district in the city of Can Tho, about 250 kilometers south of Ho Chi Minh City. The project will help Viet Nam meet the fast-growing demand for electricity to foster socioeconomic development and industrialization in the south, particularly in the Mekong Delta. The project is part of the least-cost Seventh Master Power Development Plan approved by the Government of Viet Nam in 2011.
Project Rationale and Linkage to Country/Regional Strategy

Strong economic growth (about 8% a year during the past decade), rapid industrialization, an expansion of business and services, and rising household consumption have driven the swift growth of electricity demand. Electricity consumption grew at an annual average of 15% per year in 2000-2009 and accelerated to 18% in 2010. Electricity demand is projected to continue to grow rapidly: 13% per year in 2011 2015, 11% per year in 2015-2020, and 9% per year in 2020-2025 according to the Seventh Master Power Development Plan. From 1995 to 2009, household access to the grid increased from 50% to more than 94%, and per capita consumption rose during the same period from 156 kilowatt-hours (kWh) to about 900 kWh. Rapid economic growth has helped Viet Nam reduce the share of the population below the poverty line from 58% in 1993 to 13% in 2009.

To meet this rapidly growing demand for electricity, the government plans to increase generating capacity and utilize the country's energy resources, such as hydropower throughout the country, coal in the north, and natural gas in the south. Despite construction of new generating capacity, power shortage still occurs in the country as demand still outstrips supply. To address this deficit and improve the quality and reliability of the electricity supply to consumers, the government plans to increase generating capacity from 18,481 MW in 2010 to 35,000 MW in 2015 and 60,000 MW in 2020.

In the south, where natural gas is available, several gas-based power complexes have been built, including Phu My (4,000 MW), Nhon Trach (1,500 MW), and Ca Mau (1,500 MW). A consortium comprising Chevron and the Petrovietnam Oil and Gas Group (PVN) is developing Block B/52 in the Gulf of Thailand and transporting the natural gas to the O Mon power complex for electricity generation. O Mon IV is one of the four power plants to be developed at the complex to meet the growing demand for electricity in southern Viet Nam.

Impact Reliable supply of electricity to the industrial, commercial, and residential consumers, particularly in southern Viet Nam
Project Outcome
Description of Outcome Adequate generating capacity of the Viet Nam power system
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

CCGT O Mon IV power plant operational

Common facilities for O Mon IV and O Mon III operational

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment A
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The project is Category A. A full Environmental Impact Assessment (EIA) was prepared and disclosed publicly on the ADB website (see Linked Document 5 EIA).

A comprehensive EMP has been developed which includes: (i) construction and operation phase mitigation measures, (ii) a rigorous environmental monitoring and reporting plan, (iii) independent verification of the monitoring results, and (iv) environment, health and safety (EHS) experts of the EPC contractor who will oversee mitigation implementation and monitoring and reporting during the construction stage, and EHS experts from CTTP's Environment Management Division (EMD) who will assume this responsibility during the operation phase. With a 15% contingency the total EMP budget close to $700,000. It should be noted that cost for many of the EMP mitigation measures, such as the use of low NO2 burner and the treatment.

Involuntary Resettlement As land acquisition already completed in 2006, well before the project processing started, ADB project team has undertook due diligence of the resettlement process done by EVN and local authorities (in 2006) as the basis for the project appraisal. The due diligence was conducted from March 2010 to September 2010, which covered: (i) review of all project files related to affected property and compensation payments provided by the EVN and (ii) interview with key informants (village chiefs, O Mon resettlement committee members, CTTP personnel responsible for land acquisition) and household surveys. The due diligence found that the resettlement carried out by the EA in 2006 had been completed in a manner which is compliant with ADB's Safeguard Policy Statement 2009, particularly with respect to: eligibility and entitlement and compensation for productive and residential lands and residential structures; resettlement assistances; and assistances for vulnerable households. However, the due diligence has identified some minor additional works necessary to ensure full compliance with ADB SPS 2009. These additional required tasks have been included in a Corrective Action Plan agreed by ADB and CTTP Following due diligence process, a CAP was prepared and agreed between ADB and EVN and CTTP. This CAP focuses on the following: (i) confirming that no outstanding grievances, (ii) improved assistance to vulnerable households, and (iii) provision of employment opportunities to project affected people. In addition, actions have also been agreed to comply with social protection requirements.
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The project is part of the Master Power Development Plan VII. It was included in the Country Partnership and Strategy for development in 2008. Due to prolonged negotiations on the gas pricing and volume, EVN requested ADB to postpone processing this project. ADB played a key role in facilitating the discussions that resulted in the Heads of Agreement being signed in July 2009 and the successful conclusion of the Business Coordination Contract (BCC) in January 2010. With the recent agreement the project is ready for processing in 2010 with construction commencing in 2011. The project is in the lending pipeline, and all government agencies have been consulted, including the Ministry of Planning and Investment, MOIT, State Bank of Viet Nam and Ministry of Finance. The project team will constantly consult with the Government during the processing of the project to ensure close cooperation and coordination.
During Project Implementation Extensive public consultation was undertaken intermittently from 2000 to 2007. A Project grievance redress mechanism (GRM) has been developed that will provide a systematic, transparent and timely process for receiving, evaluating and addressing affected peoples (APs) project-related complaints and grievances. When construction starts, a sign will be erected at the site providing the public with updated Project information and summarizing the GRM process. In addition, the draft EIA report has been uploaded to the ADB website for public disclosure.
Business Opportunities
Consulting Services International consulting services for project implementation supervision. ICB; FTP
Procurement

1. Plant-Design, Supply and Installation, EPC contract; ICB; 1 stage, 2-envelope

2. Fuel oil and gas for testing and commissioning of plant

Responsible ADB Officer Takafumi Kadono
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Viet Nam Electricity69 Dinh Tien Hoang Street
Ha Noi, Viet Nam
Timetable
Concept Clearance 30 Apr 2010
Fact Finding 14 May 2010 to 14 May 2010
MRM 25 Aug 2011
Approval 24 Nov 2011
Last Review Mission -
Last PDS Update 12 Sep 2013

Loan

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 113.56 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 113.56 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Loan 2814-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Nov 2011 - - 31 Dec 2016 - 23 Nov 2013
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 423.45 Cumulative Contract Awards
ADB 309.89 24 Nov 2011 0.00 0.00 0%
Counterpart 113.56 Cumulative Disbursements
Cofinancing 0.00 24 Nov 2011 0.00 0.00 0%

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
O Mon Thermal Power Plant Project: Resettlement Due Diligence Report (as of Board approval) Resettlement Planning Documents Feb 2011
O Mon IV Combined Cycle Power Plant Resettlement Plans Feb 2011
O Mon IV Thermal Power Project Environmental Impact Assessments Jan 2011
O Mon IV Thermal Power Project: Environmental Impact Assessment (Draft) Environmental Impact Assessments Sep 2010

Evaluation Documents

See also: Independent Evaluation

No documents found.


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