Viet Nam: Distribution Grid Development Sector Project for Viet Nam Power Corporations

Sovereign (Public) Project | 49175-003 Status: Proposed

The proposed Distribution Grid Development Sector Project for Viet Nam Power Corporations will support the Socialist Republic of Viet Nam in the implementation of its seventh

Power Development Plan 2011 2020 (PDP VII) to provide adequate and reliable power supply to sustain economic growth, and expand employment and income-generating opportunities articulated in the socioeconomic development strategy of Viet Nam. The project will assist part of the government's investment program in strengthening the power distribution system, managed by the five distribution power corporations (PCs) of state-owned Vietnam Electricity (EVN). It will support: (i) upgrading and development of 220 kilovolt (kV), 110 kV, and medium voltage (6 kV to 35 kV) power networks including associated substations in the urban and industrial areas across the country; and (ii) capacity strengthening of the PCs.

Project Details

Project Officer
Wanniachchi Kankanamalage, Aruna K. Southeast Asia Department Request for information
Country
  • Viet Nam
Sector
  • Energy
 
Project Name Distribution Grid Development Sector Project for Viet Nam Power Corporations
Project Number 49175-003
Country Viet Nam
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Distribution Grid Development Sector Project for Viet Nam Power Corporations
Ordinary capital resources US$ 335.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming No gender elements
Description

The proposed Distribution Grid Development Sector Project for Viet Nam Power Corporations will support the Socialist Republic of Viet Nam in the implementation of its seventh

Power Development Plan 2011 2020 (PDP VII) to provide adequate and reliable power supply to sustain economic growth, and expand employment and income-generating opportunities articulated in the socioeconomic development strategy of Viet Nam. The project will assist part of the government's investment program in strengthening the power distribution system, managed by the five distribution power corporations (PCs) of state-owned Vietnam Electricity (EVN). It will support: (i) upgrading and development of 220 kilovolt (kV), 110 kV, and medium voltage (6 kV to 35 kV) power networks including associated substations in the urban and industrial areas across the country; and (ii) capacity strengthening of the PCs.

Project Rationale and Linkage to Country/Regional Strategy

Viet Nam's economy has grown steadily (gross domestic product [GDP] annual growth rate averaged 6.5% from 2005 to 2015) with a GDP of $191.5 billion in 2015. During 2005

2015, GDP per capita increased from $699 to $2,109. Population living below national poverty line was 13.5% in 2014. During 2005 2014 (i) national electricity consumption grew from 45.6 terawatt-hours (TWh) to 128.4 TWh (12.2% annual growth); (ii) per capita electricity consumption grew from 549 kilowatt-hours (kWh) to 1,415 kWh; (iii) peak demand grew from 9.5 gigawatts (GW) to 22.2 GW; and (iv) total installed generation capacity increased from 11.6 GW to 34.1 GW showing a 300% growth in power demand and generation capacity over the period.

The PDP VII indicates similar rate of growth in the demand in next 15 years and power consumption is projected to reach 500 TWh by 2030, and to meet the increasing demand,

installed generation capacity to be increased gradually to 130 GW by 2030 which is a fourfold increase from current level. The investments in the past focused more on generation and high voltage transmission network expansion, and distribution sector was relatively neglected. Therefore, to evacuate and distribute the sizeable new generation, continued investments in distribution sector are required. In addition, upgrading and rehabilitation of aging and overloaded distribution networks is also a priority. While technical and nontechnical losses of the power system are quite low (transmission losses 2.5% and distribution losses 6.1% in 2014), the reliability of supply is very poor in Viet Nam mainly due to weak distribution grid and consumers suffer from frequent outages. Capacity of the PCs is at a satisfactory level in project implementation, operation, and maintenance but there are institutional gaps in system planning and design, and advanced technologies. The PDP VII has identified $40 billion investments (generation $30 billion, and grid development $10 billion) for 2016 -2020 and $148 billion (generation $120 billion, and grid development $28 billion) for 2020 -2030. The government also has plans to establish fully competitive electricity wholesale market by 2021 and retail market by 2024.

Impact Increased economic activities, jobs, and income in Viet Nam from improved power supply by 2030 (National Power Development Plan 2011 2020 with Outlook to 2030)
Outcome Economic activities, jobs, and income increased (National Power Development Plan 2011 2020 with Outlook to 2030)
Outputs 220kV and 110 kV electricity networks upgraded and expanded using advanced technologies
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

International and national consultants will be engaged through a consulting firm following

the Guidelines on the Use of Consultants (2013, as amended from time to time).

Procurement

The project envisages turnkey contracts and all goods and works will be

procured in accordance with ADB's Procurement Guidelines (2015, as amended from time to

time). Advance contracting will be used to improve project readiness.

Responsible ADB Officer Wanniachchi Kankanamalage, Aruna K.
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Central Power Corporation (Power Company 3)
393 Trung Nu Vuong Street
Da Nang City, Viet Nam
Hanoi Power Corporation
69 Dinh Tien Hoang Street, Hoan Kiem District
Ha Noi, Viet Nam
Northern Power Corporation (Power Company 1)
20 Tran Nguyen Han,
Hanoi, Viet Nam
Southern Power Corporation (Power Company 2)
72 Hai Ba Trung
70100 Ho Chi Minh City
Viet Nam
Timetable
Concept Clearance 15 Jul 2016
Fact Finding 05 Jun 2017 to 15 Jun 2017
MRM 15 Sep 2017
Approval -
Last Review Mission -
Last PDS Update 27 Mar 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.

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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.

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.


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