49196-003: Power Sector Reform Program | Asian Development Bank

Viet Nam: Power Sector Reform Program

Sovereign (Public) Project | 49196-003 Status: Active

The TA will assist the Ministry of Industry and Trade (MOIT) in preparing relevant guidelines, roadmaps, and regulations for (i) a competitive market operation related to contract arrangement and prudential requirements under the Vietnam wholesale electricity market (VWEM) and (ii ) a mechanism ensuring long-term adequate supply, which can replace, improve, or complement the current mechanism through power development planning (PDP) and build-operate-transfer (BOT)

Project Details

Project Officer
Lee, Hyunjung Southeast Asia Department Request for information
Country
  • Viet Nam
Modality
  • Technical Assistance
Sector
  • Energy
 
Project Name Power Sector Reform Program
Project Number 49196-003
Country Viet Nam
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9012-VIE: Power Sector Reform Program
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description The TA will assist the Ministry of Industry and Trade (MOIT) in preparing relevant guidelines, roadmaps, and regulations for (i) a competitive market operation related to contract arrangement and prudential requirements under the Vietnam wholesale electricity market (VWEM) and (ii ) a mechanism ensuring long-term adequate supply, which can replace, improve, or complement the current mechanism through power development planning (PDP) and build-operate-transfer (BOT)
Project Rationale and Linkage to Country/Regional Strategy Despite a significant progress made in the power sector reform in VIet Nam, there are still many challenges to be addressed Among others, developing competitive wholesale electricity market , while ensuring long-term adequate electricity supply, is a key issue. Although the market design and rules are well developed for the VWEM, there are remaining challenges related to the operation of the VWEM in terms of implementing the transition of contract arrangements from the Vietnam Competitive Generation Market (VCGM) to the VWEM, monitoring and supervising the competitive VWEM market operation, and developing market regulations related to market prudential requirements and tax treatments. At the same time, the mechanism to sustain investment for new generation capacity needs to be established. Currently new generation capacity is identified through power development planning (PDP) process and new investment is ensured through EVN or BOT arrangement. However, with the introduction of the VWEM, this centrally-planned approach will need be gradually changed to market-based approach. On the other hand, other countries' experiences show that a wholesale electricity market alone cannot ensure a long-term adequate electricity supply especially when there is a growing demand at high rates. Therefore, it is required to develop the appropriate mechanism to be compatible with the VWEM in the context of power sector reform in Viet Nam. Otherwise, there will be a high risk of lacking or delaying new investment, resulting in power shortage and excessive electricity price.
Impact Adequate and reliable supply of power for socio-economic development
Project Outcome
Description of Outcome An improved regulatory framework and policy actions for competitive wholesale electricity market
Progress Toward Outcome Key assessment and continuous consultation ongoing to improve Viet Nam's power sector to ensure that new generation capacity can be procured competitively and efficiently in time and least cost in a manner to be compatible with long-term Vietnam Wholesale Electricity Market.
Implementation Progress
Description of Project Outputs

1. Key policy actions and regulations for competitive power market operation

2. Key policy actions and regulations to ensure long-term adequate electricity supply

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

1. Ongoing activities related to VWEM preparation since April 2018 consisting of VWEM contracting arrangement, prudential requirements and tax treatment and other preparatory works and capacity building support.

2. Continuous assessment of existing mechanisms to ensure long term adequacy of supply, development of options to improve long term adequacy of power supplies, and design adequate mechanisms to ensure competition in implementing investments.

3. Continuous liaising with key stakeholders, and provide technical and operational support to MOIT for necessary discussions on complexities of policy related to competitive auction mechanisms.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The MOIT and ERAV have been consulted for the TA design and development partners including the World Bank, AfD, and KfW coordinated.
During Project Implementation 2 stakeholder workshops, organized with MOIT, commenced since May 2018. 2 remaining workshops for government staff and stakeholders to be conducted until end of 2019.
Business Opportunities
Consulting Services An international firm has been engaged. TA proceeds will be disbursed in accordance with the Technical Assistance Disbursement Handbook (2010 as amended from time to time).
Procurement Not applicable.
Responsible ADB Officer Lee, Hyunjung
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
Timetable
Concept Clearance 09 Nov 2015
Fact Finding -
MRM -
Approval 08 Dec 2015
Last Review Mission -
Last PDS Update 29 Mar 2019

TA 9012-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Dec 2015 10 May 2017 10 May 2017 31 May 2019 31 May 2020 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 100,000.00 0.00 0.00 0.00 1,100,000.00 08 Dec 2015 271,814.37

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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Title Document Type Document Date
Power Sector Reform Program: Technical Assistance Report Technical Assistance Reports 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

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Tenders

No tenders for this project were found.

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 9012 25 Sep 2017 INTELLIGENT ENERGY SYSTEMS PTY LTD(AUSTRALIA) in association with Energy Market Consulting Associates() LEVEL 2, 10-12 CLARKE STREET, CROWS NEST 2065 SYDNEY, NSW , AUSTRALIA Ministry of Industry Consulting Services 495,000.00

Procurement Plan

None currently available.