Viet Nam : Lotus Wind Power Project

Energy / Renewable energy generation - wind

The Project entails the development, construction, operation and maintenance of three 48MW wind farms (144MW in total) and the ancillary facilities in Huong Hoa district, Quang Tri province in central Viet Nam, under a fixed-price, date-certain, turkey EPC arrangement with PCC1. Vestas will supply, deliver, install and maintain the wind turbines. The Project will be implemented under 20-year PPAs with EVN.

The Project will be one of the first and largest wind power projects financed by the private sector in Viet Nam and one of the first to have attracted international lenders. It is highly aligned with ADB's Strategy 2030 in supporting climate change mitigation and adaptation, and the Vietnamese government's Revised National Power Development Master Plan for the 2011-2020 Period with the vision to 2030 (Revised PDP 7) to promote renewable energy and specifically grow the country's wind power capacity to 2,000 MW by 2025 and 6,000 MW by 2030.

The Project aligns with ADB's Energy Policy, which (i) aims to prioritize and broaden support for renewable energy projects and (ii) encourages private sector participation. The Project will contribute to the targets for wind generation capacity in Viet Nam's Revised PDP 7. Consistent with a "One

ADB" approach, the Project has benefited from close cross-departmental collaboration with ADB's Southeast Asia Department (SERD) in assessing and analyzing Viet Nam's energy sector.

The borrowers' E&S consultant has prepared initial E&S examination reports and an environmental compliance audit of existing construction activities for each wind farm. The project's transmission line is not considered an associated facility under the ADB SPS definition as this will be shared with neighboring wind farms. The E&S consultant undertook a critical habitat assessment and assessed all three wind farms as modified habitats. Affected households will retain the option to relocate should their decisions change during project operations. Impacts during construction and operation will be addressed through implementation of the E&S management plans and specific sub-plans. Periodic monitoring of physical and biological impacts and stakeholder consultations will be carried out by the borrowers. Adaptive management shall be employed when unforeseen terrestrial ecological risks are identified as a result of continuous monitoring activities.

The development of the three wind farms required acquisition of production forest and agricultural lands, conversion of portions of modified protection forest, and purchase and leasing of land from private users. The audit of the government-led land acquisition process and consultations with the affected persons confirmed that the process (i) was done in accordance with statutory requirements, where compensation payments and support meet ADB's SPS requirements on involuntary resettlement; (ii) ensured participation of the affected households in the inventory of losses and detailed measurement surveys; and (iii) provided avenues for the affected households to submit grievances.

Aside from land loss, Van Kieu ethnic minority communities are expected to experience limited adverse impacts because of an influx of laborers as well as safety, health, and security issues during construction and operation. The project did not result in commercialization of sociocultural and traditional beliefs of the Van Kieu or any natural resources located within customary land. The project will provide beneficial measures through employment opportunities and socioeconomic development. To address the adverse impacts, share benefits, and promote opportunities to all affected households and Van Kieu communities, livelihood restoration and ethnic minority development plans were prepared for Lien Lap and Phong Huy and an ethnic minority

development plan for Phong Nguyen.