49131-002: Rural Electrification Project | Asian Development Bank

Viet Nam: Rural Electrification Project

Sovereign (Public) Project | 49131-002 Status: Approved

The proposed Rural Electrification (RE) project will support the Socialist Republic of Viet Nam's rural electrification program for 2013-2020 (the government's RE program) and is aligned to the Seventh National Master Plan for Power Development for 2011-2020 (PDP7) which targets full electrification by 2020. The proposed project will (i) assist the government in achieving its target of 99.89% electrification by 2020; (ii) improve the reliability of power distribution networks in rural areas; and (iii) strengthen the institutional capacities of Ministry of Industry and Trade (MOIT), Provincial People's Committee(s) (PPC), Viet Nam Electricity (EVN), and Power Corporation(s) (PC) to undertake rural electrification projects.

Project Details

Project Officer
Jung, Choon Sik Southeast Asia Department Request for information
Country
  • Viet Nam
Modality
  • Loan
Sector
  • Energy
 
Project Name Rural Electrification Project
Project Number 49131-002
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Rural Electrification Project
Ordinary capital resources US$ 325.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The proposed Rural Electrification (RE) project will support the Socialist Republic of Viet Nam's rural electrification program for 2013-2020 (the government's RE program) and is aligned to the Seventh National Master Plan for Power Development for 2011-2020 (PDP7) which targets full electrification by 2020. The proposed project will (i) assist the government in achieving its target of 99.89% electrification by 2020; (ii) improve the reliability of power distribution networks in rural areas; and (iii) strengthen the institutional capacities of Ministry of Industry and Trade (MOIT), Provincial People's Committee(s) (PPC), Viet Nam Electricity (EVN), and Power Corporation(s) (PC) to undertake rural electrification projects.

The proposed project has two executing agencies (EAs) which are EVN and the Department of Power Grid and Rural Electrification of MOIT. There are a total of eight implementation agencies (IAs) which are three PCs under EVN and five PPCs under the Department of Power Grid and Rural Electrification. As ADB has experience with EVN/PCs in the power subsector, they will undertake project implementation activities on behalf of the five PPCs in order to improve project efficiency during implementation.

Project Rationale and Linkage to Country/Regional Strategy

According to the government's RE program, Viet Nam's electrification rate is expected to reach 98% by 2015. The program targets electrifying the remaining 2% by both on-grid and off-grid which corresponds to around 501,000 households and the rehabilitation of distribution networks benefiting around 642,000 households across 48 provinces by 2020. Moreover existing rural households which have access to electricity suffer from poor quality of electricity supply. A leading cause is the traditional electrification approach where EVN provides medium voltage networks to the center of the villages and the provincial governments and local communities are then responsible for the low voltage networks. Due to limited capacity and lack of adequate funds at the local level, the bulk of the low voltage networks in rural areas are poorly designed and not properly maintained. Therefore, planned rural electrification program will require rehabilitation of existing electricity networks as a precursor.

The government's RE program in 26 provinces will be undertaken by EVN and in the other 22 provinces will be undertaken by the respective PPCs. The specific RE program targets for 2016-2020 are: (i) on-grid electrification and service improvement for around 1.1 million households; (ii) off-grid electrification for 21,000 households; and (iii) supply of electricity for irrigation pumps benefiting 22,000 households in the Mekong Delta area. It is estimated that a total investment of VND33,013 billion ($1.5 billion) is needed to achieve these targets. Sufficient electricity supply for rural electrification is ensured. In 2014, total installed generation capacity of was more than above 34,000 MW and peak demand around 22,000 MW. The proposed project will finance a portion of the government's overall RE program.

As the proposed project is a high priority, the government has requested the Asian Development Bank (ADB) to provide a project loan to support rural electrification in Viet Nam. The remaining un-electrified villages are mainly in isolated mountainous areas posing significant access challenges. The consumption rate of electricity and the corresponding revenue from electricity sales in remote areas is low whereas the capital investment required is high. Therefore, ADB's support for the government's rural electrification program will help provide access to electricity and socioeconomic opportunities.

The proposed project is aligned with the Country Partnership Strategy for Viet Nam (2012 -2015) which supports inclusive and environmentally sustainable growth. By increasing reliable electricity supply to rural areas, the proposed project will contribute to inclusive and socioeconomic growth. The project is included in the Country Operations Business Plan (2015 -2017) and is also consistent with the draft Viet Nam Energy Sector Assessment, Strategy and Roadmap.

Impact Increased access to reliable electricity to achieve 99.89% of electrification in Viet Nam by 2020 (National Master Plan for Power Development Plan, 2011-2020)
Project Outcome
Description of Outcome Increased access to quality and affordable electricity supply in the targeted provinces
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Electrified rural households connected to the electricity networks

2. Rehabilitated distribution networks with improved quality of electricity supply

3. Institutional strengthening of MOIT, PPCs, EVN and PCs on rural electrification implementation

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project's environment categorization is classified as B. The initial environmental examination needs to be confirmed and verified during the PPTA implementation.
Involuntary Resettlement The project's involuntary resettlement categorization is classified as B. The proposed project does not foresee large scale involuntary resettlement or land acquisition because the upgrading of distribution lines are already owned and managed by power corporations and new extension of distribution lines will be installed normally along the roads. All affected persons will be consulted during the PPTA implementation.
Indigenous Peoples The project's indigenous peoples categorization is classified as C. The proposed project have no potential to directly or indirectly affect the dignity, human rights, livelihood systems, or culture of indigenous peoples. all negative affect will be examined during the PPTA implementation, if any.
Stakeholder Communication, Participation, and Consultation
During Project Design

The stakeholders will be consulted through meetings, interviews and surveys in order to increase awareness about the project and seek inputs to the project.

The MOIT and EVN have been consulted during the proposed project concept stage. Concerned government agencies such as MPI and MOF and development partners including World Bank and European Union have also been consulted.

Consultation with the poor, vulnerable and excluded groups will focus on issues associated with environment, involuntary resettlement, if any, and other social issues that may affect them.

During Project Implementation
Business Opportunities
Consulting Services Details of consulting services for the project will be decided during PPTA.
Procurement Details of procurement for the project will be decided during PPTA.
Responsible ADB Officer Jung, Choon Sik
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Ministry of Industry and Trade
54 Hai Ba Trung St.
Hanoi, Viet Nam
Viet Nam Electricity
69 Dinh Tien Hoang Street
Hanoi, Viet Nam
Timetable
Concept Clearance 14 Dec 2015
Fact Finding 04 Jun 2018 to 08 Jun 2018
MRM 23 Nov 2018
Approval 22 Mar 2019
Last Review Mission -
Last PDS Update 21 Sep 2017

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Rural Electrification: Project Preparatory Technical Assistance Report Project Preparatory Technical Assistance Reports Jan 2016
Rural Electrification: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Dec 2015

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.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.