Completion Report Project Number: 42182-013 Loan Number: 2517 Grant Number: 0384 Technical Assistance Number: 7262 July 2019 Viet Nam: Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project This document is being disclosed to the public in accordance with ADB’s Access to Information Policy. CURRENCY EQUIVALENTS Currency unit – dong (D) At Appraisal At Project Completion (18 February 2009 ) (31 December 2017 ) D1.00 = $0.00006 $0.000044 $1.00 = D17,490 D22,665 ABBREVIATIONS ADB – Asian Development Bank CPC – Central Power Corporation DMF – design and monitoring framework EIRR – economic internal rate of return EMDP – ethnic minority development plan EVN – Viet nam Electricity FIRR – financial internal rate of return IEC – information, education, and communication IEE – initial environmental examination MHP – mini -hydropower plant MOIT – Ministry of Industry and Trade NGO – non-government organization NPC – Northern Power Corporation O&M – operation and maintenance OBA – output -based aid PMU – project management unit SDR – special drawing rights SPC – Southern Power Corporation TA – technical assistance WACC – weighted average cost of capital WEIGHTS AND MEASURES GWh – gigawatt-hour (1,000,000 kilowatt-hours) km – kilometer kWh – kilowatt -hour MV – medium voltage MW – megawatt (1,000 kilowatts ) tCO 2 – tons of carbon dioxide emission NOTES (i) The fiscal year (FY) of the Government of Viet Nam ends on 31 December. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 31 December 2018. (ii) In this report, “$” refers to United States dollars. Vice -President Ahmed M. Saeed , Operations 2 Director General Ramesh Subramaniam, Southeast Asia Department (SERD) Country Director Eric Sidgwick, Viet Nam Resident Mission, SERD Team leader Au Minh Tuan, Senior Project Officer (Energy), SERD Team members Nguyen Thanh Giang, Senior Social Development Officer, SERD Do Thuy Huong, Project Analyst, SERD Luong Thi Thanh Ngan, Procurement Officer, SERD Dinh Kieu Oanh, Social Development Officer, SERD Pham Quang Phuc, Senior Environment Officer, SERD 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. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 1 A. Project Design and Formulation 1 B. Project Outputs 3 C. Project Costs and Financing 4 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 6 G. Technical Assistance 6 H. Consultant Recruitment and Procurement 7 I. Gender Equity 8 J. Safeguards 8 K. Monitoring and Reporting 9 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Effectiveness 10 C. Efficiency 11 D. Sustainability 11 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 13 G. Performance of the Asian Development Bank 13 H. Overall Assessment 13 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 14 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 26 3. Project Cost by Financier 27 4. Disbursement of Asian Development Bank Loan and Grant Proceeds 29 5. Contract Awards of Asian Development Bank Loan Proceeds 30 6. Chronology of Main Events 31 7. Project Implementation Schedule 33 8. Summary of Contracts Financed by Asian development bank 35 9. Compliance with Loan and Grant Covenants 57 10. Economic and Financial Evaluation 72 11. Summary of Gender Equality Results and Achievements 79 12. Technical Assistance Completion Report 92 BASIC DATA A. Loan and Grant Identification 1. Country Viet Nam 2. Loan and grant number, and Loan 2517-VIE/COL financing source Grant 0384-VIE/Clean Energy Fund under Clean Energy Financing Partnership Facility 3. Project title Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project (Formerly Renewable Energy for Remote Commune) 4. Borrower Socialist Republic of Viet Nam 5. Executing agency Northern Power Corporation, Central Power Corporation, and Southern Power Corporation 6. Amount of loan and grant Loan: SDR 102,161,000 ($151.0 million equivalent) Grant: $3,000,000 7. Financing modality Project loan and grant B. Loan and Grant Data B1. Loan 1. Appraisal Waiver 1 2. Loan negotiations – Date started 24 February 2009 – Date completed 25 February 2009 3. Date of Board approval 30 March 2009 4. Date of loan agreement 17 September 2009 5. Date of loan effectiveness – In loan agreement 16 December 2009 – Actual 21 December 2009 – Number of extensions 1 6. Project completion date – Appraisal 31 December 2015 – Actual 31 December 2017 7. Loan closing date – In loan agreement 30 June 2016 – Actual 31 December 2017 – Number of extensions 1 8. Financial closing date – Actual 22 February 2019 9. Terms of loan – Interest rate 1% per annum during grace period, 1.5% per annum during amortization period – Maturity (number of years) 32 – Grace period (number of years) 8 10. Terms of relending (if any) 1 Waiver of appraisal was approved in the management review meeting held on 5 December 2008. ii – Interest rate 6.9% for project output 1 and 3.83% for output 2 per annum in dong – Maturity (number of years) 25 years for project output 1 and 20 years for output 2 – Grace period (number of years) 5 years for project output 1 and 7 years for output 2 – Second-step borrower not applicable 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 4 October 2011 21 August 2018 82 months Effective Date Financial Closing Date Time Interval 21 December 2009 22 February 2019 111 months b. Amount (SDR million) Revised Canceled Last Original during during Revised Amount Undisbursed Allocation Implementation Implement- Allocation Disbursed Balance Category (1) (2) ation (3) (4=1+2 –3) (5) (6 = 4–5) 1. Output 1 40.966 (11.400) 29.566 24.482 5.084 1a. NPC 24.810 (6.800) 18.010 13.684 4.326 1b. CPC 16.156 (4.600) 11.556 10.797 0.759 2. Output 2 60.444 11.400 71.844 70.555 1.299 2a. NPC 20.148 6.800 26.948 26.732 0.216 2b. SPC 20.148 4.600 20.148 19.821 0.327 2c. CPC 20.148 24.748 23.992 0.756 3. Interest and 0.751 0.751 0.751 0.00 commitment charges Total 102.161 0.00 102.161 95.777 6.384 CPC = Central Power Corporation (formerly Power Company 3 or PC3), NPC = Northern Power Corporation (Power Company 1 or PC1), SPC = Southern Power Corporation (Power Company 2 or PC2). c. Amount ($ million) Revised a Canceled Last Original during during Revised Amount Undisbursed Allocation Implementation Implement- Allocation Disbursed b Balance c Category (1) (2) ation (3) (4=1+2 –3) (5) (6) 1. Output 1 60.550 (17.675) 42.875 34.587 7.054 1a. NPC 36.671 (10.543) 26.127 19.101 6.002 1b. CPC 23.880 (7.132) 16.747 15.486 1.052 2. Output 2 89.340 17.675 107.015 103.864 1.803 2a. NPC 29.780 10.543 40.323 39.323 0.300 2b. SPC 29.780 29.780 29.603 0.454 2c. CPC 29.780 7.132 36.912 34.937 1.049 3. Interest and 1.110 1.110 1.108 0.00 commitment charges Total 151.000 0.00 151.000 139.558 8.857 a SDR1.0 = $1.55048 as of reallocation date of 28 Feb 2014. b Actual disbursed amounts in US dollars. c Actual undisbursed amounts in US dollar equivalent as of financial closure on 22 Feb 2019; SDR1.0 = $1.38742. Source: Asian Development Bank. B2. Grant (additional financing) iii 1. Appraisal 26 –27 February 2014 2. Grant negotiations – Date started 8 July 2015 – Date completed 9 July 2015 3. Date of Board approval 9 April 2014 4. Date of grant agreement 30 November 2015 5. Date of grant effectiveness – In grant agreement 2 March 2016 – Actual 29 April 2016 – Number of extensions 1 6. Grant completion date – Appraisal 30 June 2017 – Actual 30 June 2017 7. Grant closing date – In loan agreement 31 December 2017 – Actual 31 December 2017 – Number of extensions None 8. Financial closing date – Actual 24 May 2018 9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 26 March 2018 11 May 2018 2.5 months Effective Date Financial Closing Date Time Interval 29 April 2016 24 May 2018 25 months b. Amount ($ million) Last Original Revised during Canceled during Revised Amount Undisburse Allocation Implementation Implementation Allocation Disbursed d Balance Category (1) (2) (3) (4=1+2 –3) (5) (6 = 4–5) 1. Output 3 2.900 2.900 1.737 1.070 1a. NPC 0.514 0.514 0.356 0.158 1b. SPC 0.494 0.494 0.087 0.408 1c. CPC 1.891 1.891 1.294 0.504 Consultants 0. 100 0. 100 0.0 93 0. 100 Total 3.000 3.000 1.830 1.170 CPC = Central Power Corporation, NPC = Northern Power Corporation, SPC = Southern Power Corporation. C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost 40.0 24.9 Local currency cost 161.0 172.3 Total 201.0 19 7.2 2. Financing plan ($ million) iv Cost Appraisal Estimate Actual Implementation cost A. Output 1 (mini hydropower) 1. ADB financed 60.55 34.59 2. NPC financed 12.94 13.96 3. CPC financed 6.84 6.34 Subtotal (A) 80.33 54.88 B. Output 2 (grid extension) 1. ADB financed 89.34 103.86 2. NPC financed 8.95 11.80 3.