Viet Nam: Low Carbon Agricultural Support Project

Sovereign Project | 45406-001

Summary

The Project will enhance climate smart agriculture development and practices focused on strengthening Low Carbong Agriculture (LCA) policies and institutions; establishing infrastructure support for agri-waste management; and, enhancing LCA technology and development transfer. These will be parts of climate change (CC) mitigation and adaptation measures to reduce green house gas (GHG) emission in 19 provinces of Viet Nam.

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Procurement Documents

Title Document Date
Low Carbon Agricultural Support Project Aug 2013

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Project Name Low Carbon Agricultural Support Project
Project Number 45406-001
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2968-VIE: Low Carbon Agricultural Support Project
Asian Development Fund US$ 74.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development
Energy - Renewable energy generation - biomass and waste
Finance - Infrastructure finance and investment funds
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Project will enhance climate smart agriculture development and practices focused on strengthening Low Carbong Agriculture (LCA) policies and institutions; establishing infrastructure support for agri-waste management; and, enhancing LCA technology and development transfer. These will be parts of climate change (CC) mitigation and adaptation measures to reduce green house gas (GHG) emission in 19 provinces of Viet Nam.
Project Rationale and Linkage to Country/Regional Strategy

The transformation of agriculture production into environment-friendly and sustainable system is fully aligned with the Government of Viet Nam (the Government) and the Asian Development Bank (ADB) strategic and operational priorities on CC mitigation and adaptation. The Government has been continuously seeking green growth strategies to reduce its CC vulnerability. In recent years, many policies and regulations have been enacted, creating a conducive policy and legal framework. Consistent with these strategic priorities, ADB's environment, natural resources and agriculture sector investments in Viet Nam focus on rural infrastructure and water resources management for enhancing environmental sustainability and climate resilience.

Climate change is a development issue, rather than a solely environmental one; and its interrelationship with food security, bioenergy and poverty is complex. Inflation in Viet Nam reached 18% in 2011, the highest in the region, led by big rises in the cost of food, causing financial hardship for many people. While agriculture's share (20%) of the gross domestic product is declining, its output, however, is expanding. The sector remains a key contributor to exports (25%) and employment (70% of rural households, HHs). Agriculture is the largest contributor (43%) of the national GHG emission. GHG emissions from the burning of biomass in open fields are also significant . Over 40% of arable land is degraded because of heavy use of inorganic fertilizers and other unsustainable agricultural practices. Deforestation has been continuously increasing since about 56% of Vietnamese HHs still rely on the unsustainable harvest of firewood for their energy needs. The use of firewood for cooking creates indoor pollution, causing serious respiratory diseases, especially among rural women and children.

The Government is promoting the use of abundant biomass sources, such as livestock manure and other agri-wastes, to produce biogas as a clean energy source for rural HHs. The reduce, reuse, and recycle of agricultural wastes will decrease GHG emission and the release of harmful wastes into the environment. The biogas plants (BPs) have the following benefits: (i) reduced: human and livestock disease outbreaks; methane emissions; fuel/fire wood consumption; water, air (in and out door) and land pollutants; and (ii) increased: savings in time and money, quantity of organic fertilizers; and potential access to carbon credit revenue (CR) schemes. From an ADB supported project , BPs have been found to have financial internal rates of return of 54% and economic rates of return of 55% with increases in HH incomes averaging 86%.

The Government has targeted the country to construct four million of small scale biogas plants (SBPs) by 2020 (from about 0.5 million in 2010 ) to cover the need of about 8.5 million small livestock farms. Significant acceleration is also required for medium and large scale biogas plants (MBPs and LBPs), since only less than 100 MBPs and LBPs were constructed (out of existing 21,000 medium and large livestock farms). Further improvement is required for biogas development, such as bio-slurry, livestock farm and other value chain management. Beyond the infrastructure support, additional investment on the regulatory, knowledge, technology development, diffusion and extension to continuously enhance climate smart agriculture practices and transfer, is also required.

Impact Less agriculture-related pollution
Project Outcome
Description of Outcome Greater uptake of Climate Smart Agricultural Waste Management Practices (CSAWMP)
Progress Toward Outcome

Past ADB missions have provided guidance to the CPMU for the preparation of the strategy. Despite past assurances to the contrary, the CPMU has now admitted that they do not have the technical capacity to prepare the strategy. Without a proper strategy the output cannot proceed. The CPMU agreed to recruit the international consultant who had already been shortlisted for the preparation of the strategy. In addition, the possibility of using consultant resources from RETA7833 to provide immediate support to prepare the strategy will be pursued by the CPMU.

The recruitment of the Loan Implementation Consultants (LIC) was last reviewed by ADB in January 2015. The shortlist of firms and the draft RFP were endorsed shortly thereafter. MARD's approval of the shortlist is still outstanding.

Implementation Progress
Description of Project Outputs

1. Expanded Use of Livestock Waste Management Infrastructure

2. Credit Lines for Biogas Value Chains

3. Enhanced Climate Smart Agriculture Waste Management Practices (CSAWMP) technology transfer

4. Effective project management

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

Per the Q4-2014 Progress Report of the Project, a total of 11,764 SBVCs have been constructed by livestock farming HH. 9,861 of these HHs have received the financial incentive from the project, after their SBVCs were certified by the PPMUs as meeting the criteria for technical construction and environmental improvements.

As of Q4/2014, the Project has organized: (i) 519 training courses on small biogas plant value chain (SBVC) operation for 15,338 farmer households; (ii) 10 study tours to study and exchange experience of biogas technology for 175 staff; (iii) 88 workshops on disseminating policies, institutions and standards of biogas technology and comprehensive livestock management for more than 3,283 HHs; and (iv) 10 training courses for 321 masons and 13 technical training course for 512 participants to construct SBVCs.

In close consultation with the ongoing National Biogas Program managed by the Netherlands Development Organization (SNV), the Project is developing a biogas database system that consolidates information from ongoing biogas-related programs being implemented in Viet Nam. Procurement of associated software and hardware is being carried out by the Project.

Advances cumulatively valued at US$3.4 million (i.e., US$1.7 million for each financial intermediary) have been disbursed in early February 2015. Initial efforts to make these financing instruments available to the intended beneficiaries have commenced.

CSAWMP packages will be developed and disseminated once the CSAWMP research and demonstration strategy has been formalized.

The CPMU is currently drafting a research strategy and detailed implementation plan for CSAWMP. The draft strategy will be reviewed by MARD and thereafter submitted to ADB by Q1 2015.

MARD appointed Mr. Nguyen The Hinh as the Project Director to lead project implementation and to supervise the Project's CPMU. He will be supported by two Project Deputy Directors, Hoang Thai Ninh and Vu Tien Dung; and approximately 25 staff in the CPMU office. Each PPMU is led by a full-time project manager. Key PPMU staff have been selected based on their qualifications and experience in the management of similar projects.

A consultancy package to gather baseline data is being recruited.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects

The safeguard categorization for environment is B. The extent and nature of environmental impacts are influenced by the fact that the biogas plant and other CSAP investments will be subject to a screening process that will exclude those that may carry significant negative impacts. As such, no biogas plant and other CSAP investments with expected significant environmental adverse impacts (category A according to ADB screening procedures) will be selected.

The potential environmental impacts will be addressed by the Project as follows: (i) careful design of CSAP investments to ensure that increased capacities are accommodated, (ii) development of management plans for the re-use and/or proper disposal of agri-waste, (iii) careful design for biogas plants and other CSAP assets, (iv) provision for collection and disposal of solid waste from rural areas, (v) studies appropriate mitigation measures for any perceived negative impact, (vi) inclusion of contract requirements for contractors to quality control for and carry out all practicable steps to mitigate construction impacts, (vii) increased attention to ensure adequate maintenance of biogas plants and other CSAP assets, and (viii) safety awareness programs are conducted in each of CSAP investment.

Management of the preparation and implementation of each BP and other CSAP investment will be the responsibility of each asset investor. Relevant agencies will be empowered from national to commune level. They will operate in close coordination with the PPMU. Technical support for all aspects of project management and implementation will be provided by the safeguard consultants hired by the CPMU.

An initial environmental examination (IEE) has been prepared for the project, which outlines the potential adverse environmental impacts and mitigation measures. An environmental management plan has been included in the IEE. During the project implementation, IEE will be prepared as necessary within a Category B classification in accordance with the approved environmental assessment and review framework (EARF) and the approved IEE prepared during the design phase.

The PPC, through the PPMU will have responsibility for ensuring that all mitigation measures are implemented. The IEE of the first proposed MBP and the IEE of the first proposed LBP will be submitted to ADB for review and approval prior to construction. If the quality is acceptable and consistent with ADB's Safeguard Policy Statement 2009 then the subsequent IEEs can be approved by the Project Director in the CPMU. In provinces where MBPs and LBPs will be installed, an environment specialist from the relevant Provincial Department of Natural Resources and Environment (DONRE) will be seconded to the PPMU for environmental management and monitoring tasks.

The approved IEE is adequate and there is no need for further detailed study or Environmental Impact Assessment (EIA). No additional study or follow-up EIA is needed under the ADB system, without prejudice to other requirements that the government may enforce under Viet Nam's policy, legal and administrative framework governing EIA.

Involuntary Resettlement The safeguard categorization is C for involuntary resettlement. No action is required since the project requires no land acquisition and has no involuntary resettlement impacts. Biogas value chain (BVC) management infrastructure will be constructed on land belonging to the BVC owners. The project selection criteria will exclude activities that entail land acquisition and/or involuntary resettlement. MARD and the implementing agencies will monitor and ensure that land to be used for the construction and operation of BVCs are within that owned by the BVC owners/beneficiaries.
Indigenous Peoples

The safeguard categorization is B for indigenous people therefore an Indigenous Peoples Plan (ethnic minority development plan, EMDP, in local term) was prepared. The IPP/EMDP objective is to design and implement the project in a way that fosters full respect for indigenous people/ethnic minority identity, dignity, human rights, livelihood system, and cultural uniqueness as defined by the indigenous people/ethnic minority themselves so that they: (i) receive culturally appropriate social and economic benefits, (ii) do not suffer adverse impacts as a result of the Project, and (iii) can participate actively in the various investments funded by the Project.

Measures were taken in designing the Project to encourage participation and contribution of the indigenous people/ethnic minority based on the recognition of their unique social and cultural characteristics that may require customized approaches and interventions. This includes: (i) the screening of CSAWMP investments to include indigenous people/ethnic minority as the project beneficiaries; (ii) targeted 5% of SBP for indigenous people/ethnic minority focused in three sample provinces; (iii) Indigenous people/ethnic minority involvement in the construction, management, capacity development/skills training, as maintenance operators and masons of biogas and other CSAWMP investments; (iv) additional human resources support to ensure that indigenous people/ethnic minority received adequate technical support and advise when needed.

The relevant agencies will encourage indigenous people/ethnic minority participation as members for equal access and control in various aspects of biogas development. The IPP/EMDP was prepared to address the twin issues of risk mitigation and benefit enhancement. It is based on the findings of the social assessment and results of consultations with key stakeholders in three sample provinces of Bac Giang, Soc Trang, and Son La Province undertaken during the project's fact-finding mission. It is in line with Government strategies for indigenous people/ethnic minority as well as ADB SPS (2009) requirement 3. Adequate human and financial resources have been allocated to facilitate the implementation of IPP/EMDP.

Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

The Project has been designed to improve the well-being of poor people, especially the vulnerable and excluded groups, through a series of investments in biogas plants and other CSAWMP assets. During project implementation, the process of consultation will continue throughout the feasibility study and detailed design phase of each biogas plant and other CSAP investments to afford community groups the opportunity to voice their views on how the Project is to be implemented and operated to benefit them. This will be accomplished through a series of community consultation meetings at commune and district level. Community consultations with ethnic minority groups shall be tailored to the needs of ethnic minorities and conducted in a culturally- appropriate manner.

The community consultation meetings will be carried out by the PPMUs in collaboration with financial intermediaries, and the design and safeguard consultants. It will include the participation of representatives from the District People's Committee, the Commune People's Committee, and mass organizations such as the Women's Unions, the Farmers' Union and the Youth Union. The communities will be briefed on all aspects of the Project including the detailed investments and the safeguard issues of environment, social, management and financial aspects of the Project. Women will be particularly encouraged to actively participate in the consultation meetings and voice their opinions and views about the subproject design and implementation arrangements.

The community will also be informed of the O&M arrangements for the biogas plants and other CSAP value chain investment and their expected participation in kind or otherwise in this aspect of the work. They will be encouraged to provide ideas and feedback to the design team and raise their concerns regarding potential negative impacts of the biogas plants and other supporting value chain infrastructure on the environment and the welfare of the community. The feedback obtained from these community consultation meetings will be incorporated as necessary in the detailed design of biogas plants and the supporting investments. The process of consultation is expected to build ownership of the biogas plants and other investments by the owners as well as the community and hence foster better sustainability of the investment.

During planning process, it is anticipated that the community will be mobilized in a number of different ways during the design, implementation and operation of different CSAP investments. Since most of the CSAP assets involved biogas plant construction and other supporting value chain infrastructure, there is a scope for the community to participate in the selection of the site and alignment for instance. Most of the assets are privately owned by households or enterprises. The potential benefits of the investments to the overall communities will be assessed during consultation meetings.

During the construction phase of biogas plants and their value chain infrastructure, a significant opportunity for active participation, and for many poor households to benefit from the Project, is in providing wage labor. This will be encouraged through various training for technicians and the bidding documents which will request the contractors to investigate this option whenever possible, especially for MBPs and LBPs. It will also be possible for communities to participate effectively in the supervision of the construction works.

The community will also be required to participate in the operation and maintenance (O&M) of the completed biogas plants and other value chain infrastructure whenever possible, such as through promotion of the use of bioslurry for organic fertilizers; connection of gas and electricity produced by biogas plants to the neighborhood or public grids; provision of labor or in some cases cost and revenue sharing for common uses of the assets.

Responsible ADB Officer Charles David Salter
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Ministry of Agriculture and Rural DevelopmentLAMTV@APMB.GOV.VN7th Floor- Building 2 ? 16 Thuy Khue
Tay Ho- Hanoi
Timetable
Concept Clearance 07 May 2012
Fact Finding 15 May 2012 to 24 May 2012
MRM 14 Aug 2012
Approval 12 Dec 2012
Last Review Mission -
Last PDS Update 31 Mar 2015

Loan 2968-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2012 07 Mar 2013 05 Jun 2013 30 Jun 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 84.00 Cumulative Contract Awards
ADB 74.00 12 Dec 2012 2.98 0.00 4%
Counterpart 10.00 Cumulative Disbursements
Cofinancing 0.00 12 Dec 2012 9.88 0.00 15%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Low Carbon Agricultural Support Project: Ethnic Minority Development Plan Indigenous Peoples Plans/Indigenous Peoples Development Plans Jun 2012

Evaluation Documents

See also: Independent Evaluation

No documents found.


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