Viet Nam has invested greatly in energy, powering its communities. In 2007, more than 97% of the country’s communes were connected to the national grid. However, some 278 communes, home to ethnic minority communities in remote mountain provinces, had yet to be connected. In addition, several villages had been classified as electrified despite the fact that only the commune center was provided with electricity. With power connections, these poor and vulnerable communities would gain more productive hours, income opportunities, and better household living standards.
In 2009, an ADB project identified that the most appropriate, sustainable, and affordable use of electricity and renewable energy for these remote communities would be grid expansion in combination with the development of run-of-river grid-connected mini-hydropower plants. With cofinancing from the Climate Change Fund (CCF) and the Clean Energy Fund (CEF) under the Clean Energy Financing Partnership Facility, the project provided electricity in remote, mountainous, and poor communes; expanded and rehabilitated the distribution networks to serve remote and poor provinces; and reduced greenhouse gas emissions, with minimal negative social and environmental impacts.
Interventions
Reliable and affordable electricity should lead to socioeconomic development and support inclusive growth in Viet Nam’s unelectrified communes. Electrified households improve daily living conditions and quality of life, especially for women. Electricity can also improve the provision of basic education and health services, such as maternal health facilities.
The project constructed run-of-river mini-hydropower plants of 7.5 megawatts (MW) or less capacity, totaling 30 MW in several provinces in northern and central Viet Nam. The mini-hydropower plants can reduce transmission and distribution losses and are expected to be connected to the national grid. By so doing, the mini-hydropower plants provide not only access to electricity in remote areas, but also additional clean energy to the national grid, for a fee. This will serve as a sustainable financing source for further rural electrification. Electricity connections were provided to poor and remote ethnic minority villages, with a minimum of 100 gigawatt hours (GWh) of hydropower energy contribution to the national grid.
The project expanded the rural distribution network to connect villages without electricity and rehabilitated the poorly constructed low voltage networks serving poor communes. This is in support of the Government’s ongoing special program for rural electrification of poor provinces inhabited by ethnic minorities.
The project also provided free service connections using output-based aid mechanism to poor and vulnerable households, who received electricity under the project but could not afford the one-off service connection costs. A $3 million grant financed by CEF was used to subsidized service connection costs.
Another $1.6 million financed from CCF, together with $0.9 million from ADB’s Technical Assistance Special Fund, were used to address barriers to the development of renewable energy in Viet Nam, including the formulation of a policy framework for renewable energy and capacity building on mini-hydropower sustainability. In addition, the funds were used to promote productive use of electricity and income generating activities for the project beneficiaries.
Promotion of productive and efficient use of energy was implemented in conjunction with promotion of gender equality and women’s empowerment, as well as safeguarding ethnic minorities. A total of 101,828 people (43.7% of which were women) were trained. The project also facilitated access to micro credit for 6,128 women; 2,994 women borrowed credit to invest in livelihood activities.
Results
By January 2019, four out of the planned five mini-hydropower plants have been completed, with total capacity of 25 MW: one (7.2 MW) in January 2016, two (one 7.5 MW and one 2.8 MW) in December 2017, and the fourth (7.5 MW) in June 2018. The last one (7.5 MW) will be commissioned in the second quarter of 2019.The medium voltage network was extended by 51 km and the low voltage network by 19.6 km. A total of 36 villages and 8,767 households were provided with electricity from the mini-hydropower plants.
The extension and rehabilitation of electricity distribution networks reached some 300,034 households in 3,133 villages/hamlets in 13 remote and mountainous provinces. Over half of these households (159,845) received new electricity connections from the national grid. A total of 142,572 households received free service connections, including 53,865 (38%) subsidized from the grant. Some 2,138 km of medium voltage line, 6,916 km of low voltage line, and 115.6 MVA of substation capacity have been expanded or rehabilitated. The project was financially closed on 22 February 2019.