In 2007, while over 97% of Viet Nam’s communes were connected to the national grid, 278 remained unconnected, and some were classified as electrified but received power only at the commune center. Furthermore, the low voltage system—previously the responsibility of provincial and district governments rather than the Viet Nam Electricity (EVN)—was poorly constructed and unreliable in some poor rural areas. To address the situation, the government transferred the development of low voltage networks to EVN to expedite the electrification of remote parts of the country mainly inhabited by poor and vulnerable ethnic minorities.
The Asian Development Bank (ADB) approved in March 2009 a $151 million loan for the Renewable Energy Development and Network Expansion and Rehabilitation for Remote Communes Sector Project. The project combined electrifying remote areas with developing mini-hydropower plants (MHPs) to generate a sustainable operating cash flow to operate and maintain the plants. Cost recovery of power supply to difficult areas, clean energy mechanisms, pro-poor geographic targeting, and productive energy use and income generation were built into the project design as special features.
The project’s envisaged impact was promotion of pro-poor, balanced economic development of remote, mountainous, and poor communes through the sustainable use of electricity and renewable energy. Its expected outcome was provision of reliable and affordable electricity to remote, mountainous, and poor communes. It had two planned outputs at appraisal: (i) development of 5-10 run-of-river mini-hydropower plants (MHPs) in 3 northern and 2 central region provinces, to provide a minimum of 100 gigawatt-hour (GWh) of hydropower to the national grid per year; and (ii) expansion of electrification to 5 poor provinces in the northern region, Mekong Delta, and central Viet Nam to benefit approximately 100,000 households in about 1,000 villages. With grant financing from the ADB-administered Clean Energy Fund (CEF), a third output was later added to the original project design—the connection of 48,300 hitherto unserved poor and vulnerable families in the project areas.
At completion, the project developed 5 MHPs, with a total capacity of 32.5 megawatts (MW), 25 MW of which was operating and the remaining 7.5 MW, delayed by land compensation issues and poor contractor performance, was expected to start in December 2019. The 4 commissioned MHPs were generating 95.7 GWh of renewable energy annually, providing grid electricity to 36 villages and 8,767 households, 827 of which gained access to electricity for the first time. Through 26 subprojects under output 2, the project extended or rehabilitated medium or low voltage networks and installed new ones, benefitting another 300,034 households in 3,133 villages of 13 remote and mountainous provinces, 67.5% of which households were poor and 53% were newly connected. Under output 3, a total of 142,572 households received subsidized service connections, including 88,707 covered by the loan under a special government program, and 53,865 under the CEF grant.
Overall successful output deliveries enabled the project to achieve its intended outcome and impact. Significantly surpassing its targeted number of households served, it helped improve the economic well-being of the communities and contributed to the typical 50% poverty reduction in the project districts by 2017. Of the total households served, 12,672 were women-headed, and these comprised 100% of the women-headed households in the project areas.
The power companies—Northern Power Corporation, Central Power Corporation, and Southern Power Corporation—were the project executing agencies. Their project management units and provincial subsidiaries were the implementing agencies.
