ADB is supporting power transmission upgrades in Viet Nam to meet growing demand for electricity. The second tranche of the multitranche loan facility will finance the expansion of the transmission network, improve the operational effectiveness and efficiency of the National Power Transmission Corporation, and project implementation support.
|Project Name||Power Transmission Investment Program - Tranche 2|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Partnerships
|Sector / Subsector||
Energy / Electricity transmission and distribution - Energy sector development and institutional reform
|Gender Equity and Mainstreaming||No gender elements|
The investment program will contribute to meeting electricity demand growth of industrial, commercial, and residential consumers in an economically and environmentally sustainable manner. The outcome of the investment program is enhanced capacity of the transmission network to balance power load. The investment program also supports partial implementation of National Power Sector Development Master Plan VII (PDMP VII) to meet growing electricity demand of industrial, commercial and residential consumers throughout Viet Nam, and improve the operational effectiveness and efficiency of the National Power Transmission Corporation (NPT) the entity responsible for financing, managing, and operating the transmission network to ensure reliable electricity supply.
Tranche 2 will finance part of each of the three output components:
Component 1: Expanded Transmission Network (Physical investment)
Component 2: Improved Operational Effectiveness and Efficiency (Non-physical investment)
Component 3: Project Implementation Support (Non-physical investment)
|Project Rationale and Linkage to Country/Regional Strategy||
Recognizing the need to overcome current constraints in the power sector to ensure that rapidly growing electricity demand can be met in an economically and environmentally sustainable manner to sustain economic growth, the government of Viet Nam approved in 2011 the PDMP VII . With PDMP VII, the government approved multiple power generation and transmission projects to be implemented during 2011 -2020 and laid out a detailed road map and reform framework for (i) strengthening financial capacity, (ii) improving the operational performance of power sector entities, (iii) enhancing human resource capacity and development, (iv) improving the technological optimization and modernization of power sector infrastructure, and (v) enhancing energy efficiency in generation and consumption to sustainably develop and modernize Viet Nam's power sector.
To improve the financial sustainability of power sector entities, the Prime Minister approved in July 2012 EVN's 2011- 2015 Operation and Business Plan. The plan includes a provision for revaluation of NPT's assets of D15,000 billion to raise NPT's equity to D22,000 billion by the end of 2012. The asset revaluation will contribute to progressively improve NPT's financial performance in line with the objectives under the power transmission investment program of achieving a (i) debt-service coverage ratio of 1.5, (ii) self-financing ratio of 25%, and (iii) debt-to-equity ratio of 75:25 by 2015. Financial and implementation details of the asset revaluation are currently under approval by the Ministry of Finance. The asset revaluation is scheduled to take place end of 2012.
|Impact||Enhanced capacity to balance power load in southern Viet Nam|
|Description of Outcome||Strengthened financial and operational capacity of NPT|
|Progress Toward Outcome||500 kV transmission lines were expanded by 437 km (2010 baseline: 3,987 km) and 220 kV transmission lines by 28.2 km (2010 baseline: 10,820 km).|
|Description of Project Outputs||
Component 1: Expanded Transmission Network
Energized transmission lines
Improved Operational Effectiveness and Efficiency of NPT
Strengthened investment planning and management capacity of NPT
Project Implementation Support
Enhanced streamlined project implementation
Strengthened safeguard compliance management
Effective support in design and construction
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Under component 1, three subprojects were completed and operationalized as follows: (i) 500 kV Pleiku My Phuoc Cau Bong transmission line in May 2014, (ii) 220 kV Cau Bong Duc Hoa transmission line in Dec 2015, and (iii) 220 kV Cau Bong Hoc Mon Binh Tan transmission line in Sep 2016.
Component 2 is deferred to Tranche 4.
Under Component 3, environmental and resettlement consultants were provided to improve the capacity of NPT in meeting safeguard compliance.
Financial closure envisaged in October 2017.
|Geographical Location||Binh Tan, Cau Bong, Cu Chi, Dak Nong, Duc Hoa, Gia Lai, Hoc Mon, Huyen Binh Minh, Huyen Cu Chi, Huyen Duc Hoa, Huyen Hoc Mon, My Phuoc, Phuong Tan Chanh Hiep, Pleiku, Quan Muoi Hai, Song Cau, Tan Phu Trung, Thanh Pho Pleiku, Thi Xa Song Cau, Tinh Binh Duong, Tinh Binh Phuoc, Tinh Dak Lak|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||Subprojects of tranche 2 are category B under ADB's environment guidelines. No component of any of the three subprojects is located in an environmentally sensitive or protected area, and potential impacts during construction have been mitigated by using good international construction practices. The main identified impact was the clearing of 40 hectares of degraded forest within the right of way of the 500kV Pleiku-My Phuoc-Cau Bong transmission line. The impact are being offset through tree planting in equivalent areas. An initial environmental examination (IEE) report with an environmental management plan and implementation budget was prepared for each of the subprojects under tranche 2. The IEEs were disclosed on ADB's website in August 2012.Environmental units supported by individual national and international consultants have been formed within each PPMB to supervise implementation and assure occupational and community health and operation until operation of the transmission lines.|
|Involuntary Resettlement||Tranche 2 built 3 transmission lines that required land acquisition and 541 relocated households. A total of 6,555 affected household, 172 plantations owned by local communes were affected and 51 households were severely affected. 4 RPs and 4 REMDPs were prepared and implemented. Implementation have closely monitored.|
|Indigenous Peoples||A total of 1,039 ethnic minority households were affected. Where ethnic minorities were affected by the construction of the 500kV Pleiku-My Phuoc-Cau Bong transmission line, combined resettlement and ethnic minority development plans were prepared and implemented. Implementation have closely monitored.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||Consultations regarding land acquisition were undertaken with key government officials and the affected people for subprojects included in Tranche 2.|
|During Project Implementation|
|Consulting Services||The procurement plan has been uploaded on ADB's website.|
|Procurement||The procurement plan has been uploaded in ADB's website.|
|Responsible ADB Officer||Hyunjung Lee|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Viet Nam Resident Mission|
National Power Transmission Corporation
18 Tran Nguyen Han Street,
Hoan Kiem District, Hanoi-Vietnam
|MRM||24 Aug 2012|
|Approval||05 Dec 2012|
|Last Review Mission||-|
|Last PDS Update||28 Sep 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|05 Dec 2012||21 Dec 2012||31 May 2013||30 Nov 2016||-||29 Sep 2017|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||319.36||Cumulative Contract Awards|
|ADB||68.58||05 Dec 2012||61.19||0.00||97%|
|Cofinancing||0.00||05 Dec 2012||62.85||0.00||100%|
|Status of Covenants|
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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
None currently available.
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|Tender Title||Type||Status||Posting Date||Deadline|
|VIE: Power Transmission Investment Program, Tranche 2||Advance Notice||Archived||08 Oct 2012|
No contracts awarded for this project were found