Viet Nam | Climate change

Viet Nam's Communes Get on the Grid

Viet Nam is progressing toward achieving universal access to electricity by 2020 after an ADB project with cofinancing from the Clean Energy Fund under Clean Energy Financing Partnership Facility helped provide hundreds of thousands of households with electricity and opened economic opportunities to the men and women of these communes.

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Lighting Remote Communities. A low-voltage line runs through a commune road and has helped bring electricity into these poor communities where some of Viet Nam’s indigenous people live. Hundreds of thousands of households directly benefitted from the project.

Project

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

Project Cost

$201 million

  • ADB $158.5 million
  • Viet Nam $46.6 million
  • Financing Partner
    • Clean Energy Fund under the Clean Energy Financing Partnership Facility US$3 million

Approval Date

April 2014

Signing Date

30 November 2015

Completion

May 2018

Partnership Results

Access to electricity expanded in targeted 13 provinces
Increased percentage of household electrification from 83.5% at appraisal to 96.8% at completion
Developed five mini hydropower plants with total capacity of 32.5 megawatts make electricity for 8,767 households in 36 villages
Rehabilitated and repaired existing networks for 300,034 households in remote and mountainous provinces
Subsidized network connections to 142,572 poor households

Background

Electrification has been one of Viet Nam’s remarkable achievements in recent decades. Access to electricity increase rapidly from 2.5 % in 1975 to over 91 % in 2007. With this, more than 97% of the country’s communes are connected to the national grid. However, some 278 communes in the mountainous north, central, and south Viet Nam remained unconnected or if they do have connection, only in the commune center. These communes are home to some of Viet Nam’s poor indigenous communities. To address this remaining service gap, Viet Nam invested in expansion of distribution networks and rehabilitation of poorly constructed and unreliable low voltage electrical systems to attain universal access.

The project, Viet Nam’s Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project, received funding from ADB and the Clean Energy Fund under the Clean Energy Financing Partnership Facility. The result—99% of all Vietnamese families will have access to electricity by 2020.

The project is consistent with Viet Nam’s Socio-Economic Development Plans and ADB’s country strategy and program for Viet Nam, which promote pro-poor, balanced economic through the sustainable use of electricity and renewable energy in an affordable manner.

Interventions

The project sought to expand and rehabilitate electricity networks in combination with development of grid-connected mini hydropower plants (MHPs) in remote parts of Viet Nam. The MHPs also help reduce grid loss as they are located close to poor and remote parts of the country.

The MHPs provide electricity to local communes. Surplus renewable energy will be sold to the national grid. Revenues from electricity sales of these plants use for further expansion of the national grid to communities. The MHPs also help reduce grid loss as they are located close to poor and remote parts of the country.

In addition, the project had strong gender and ethnic minority components. These include increasing gender mainstreaming capacity of the power companies, expanding participation of women in campaigns on safe electricity use, ensuring free electricity connections for poor, women-headed households, and raising women’s representation in planning, implementing, and monitoring project activities.

Results

Household electrification in project targeted areas increased from 83.5% at appraisal to 96.8% at project completion. Because of electrification, economic activities increased among the households in the communes. Households consumed about 6 gigawatt-hour of electricity per year for income generating activities. This reduced the poverty rate in the project districts by 50% in 2017.

  • Mini-hydropower plants developed. The project successfully constructed five MHPs with total capacity of 32.5 megawatts (MW), which generate 124.4 gigawatt-hour (GWh) of renewable energy and abate 70.5 thousand tons of greenhouse gas emission per annum. From this, electricity was provided to 8,767 households in 36 villages, including to 827 households that gained access to electricity for the first time.

  • Expanded and rehabilitated of existing networks. The networks were rehabilitated and allowed more than 3,000 villages—or 300,000 households—to have reliable and affordable electricity.

  • New connections and subsidies for poor families. Not only did poor families finally have access to electricity, connection to the grid and in-house wiring also came for free. At completion, a total of 142,572 households received subsidized service connections, including wiring inside the house, and a power socket and bulb.

The cost of electricity was also affordable for commune households. An evaluation with independent verification found that electricity is affordable for households, as it costs an average of 6.54% share of their household monthly expenditures.

The project’s outcomes provided both strategic and practical benefits to poor people, particularly women and ethnic groups. Specifically, it improved new electricity connections to 300,034 households, including a free service connection to 12,672 female-led households. The project also facilitated access to microcredit for 6,128 women and 2,994 borrowed to invest in livelihood activities.