Swedish Support To The Energy Sector In Vietnam

Embassy of Sweden, Hanoi, January 2005

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Swedish Support to the Energy Sector in Vietnam since 1991

Sweden has supported the development of Vietnam’s energy sector since the early 80’s. The support is managed by the Swedish International Development Cooperation Agency, Sida. The first energy cooperation agreement between Vietnam and Sweden was signed in 1984 for support to the rehabilitation of the distribution network in Ho Chi Minh City and to the rehabilitation of Thu Duc Thermal Power Plant. Since then, Sida has supported power projects in many parts of Vietnam, as shown in the list below. Recently, the Electricity of Vietnam, (EVN) implemented a 259 MSEK agreement including distribution projects in 4 cities: Hanoi, Thai Nguyen, Danang and Qui Nhon. These projects contained both capacity building, strategic studies and installation of equipment, mainly within power distribution and load dispatch. In addition, Sida supports the National Hydropower Plan study and recently a Demand Side Management Programme.

Sida also makes concessionary credits and soft loans available to Vietnam for investments in the energy sector. Recently completed concessionary credits are represented by the Song Hinh multi-purpose project, the Ha Tinh 500 kV transformer station and to rural transformer stations in Southern Vietnam. On-going is a second credit frame to rural transformer stations. A soft loan (80 % grant element) is provided for the upgrading of distribution networks in Danang (phase II), Tuy Hoa and An Nhon.

Currently, the main contribution from Sida is support to the Vietnam Sweden Rural Energy program (VSRE), which has a focus on capacity building on central and provincial level.

Table 1 Agreements within the energy sector since 1991

Agreement / Period / Grant
(SEK) / Concessionary
Credit
(SEK)
Energy Cooperation 1991-1994
Energy Cooperation 1994-2003
Rural Energy Agreement / 1991-1994
1994-2003
2003-2008 / 100
259
48
Distribution Projects Central Vietnam
National Hydropower Plan, Stage 1
National Hydropower Plan, Stage 2
Capacity Building in Mgmt & Tun
Demand Side Management
Song Hinh Multipurpose
Project
Credit Line Substations, I
Credit Line Substations, II
Ha Tinh Transformer Station
Total / 1998-2005
1998-2002
2003-2006
1997-2000
1999-2003
1997-2004
1998-2009
2001-2013
1999-2010 / 67
19
13
27
30
38
601 / 55
213
60
80
112
520

Rural Energy Agreement, 2003-2008 (48 MSEK)

The Programme shall encompass the following areas:

1. Strenghthening the implementation capacity of renewable energy
policies;

2. Technical standards for rural electrification/Electricity networks;

3. Mobilising investments for rural electrification based on renewable
energy;

4. Institutional models for community service provision and appropriate
regulations;

5. Rural Electrification impact survey and analysis;

6. Awareness creation on productive use of energy in rural areas of
Vietnam.

Development objective of the Programme:

The rural population in Vietnam have increased access to options for energy services which are reliable, affordable, appropriate and sustainaible.

Specific Area Objectives

Area 1: Strengthening the implementation capacity of renewable energy policies.

To strengthen the renewable energy policy implementation capacity among government officials, the Provincial People’s Committees and district level, that facilitates the development of renewable energy resource plan in rural areas.

Area 2: Technical standards for Rural Electrification/Electricity networks.

To develop a proposal for appropriate sector technical standards and enforcement mechanisms for safe and reliable rural electricity service delivery.

Area 3: Mobilising investments for rural electrifications based on renewable energy.

To overcome key barriers to accelerated growth in rural electrification based on renewable energy sources through improved access to funding.

Area 4: Institutional models for community service provision and approptiate regulations.

To review, develop and apply institutional models appropriate for local management of rural off-grid electricity supply and to assess and provide recommendations regarding appropriate regulations for institutional models for community service provision.

The following two areas will be administered and implemented by MoI and the World Bank in Hanoi

Area 5: Rural Electrification Impact survey and analysis.

To provide background information in the formulation of policies related to pricing, subsidies, costs, benefits, scale and resource allocation to rural electrification in Vietnam.

Area 6: Awareness creation on productive use of energy in rural areas of Vietnam.

To produce information material that encourages and stimulates the productive uses of electricity in newly electrified rural areas in Vietnam.

A part of the Programme budget (tentatively 15 MSEK) will be used for off-grid pilot projects within areas 1 - 4 .

Parties:

Ministry of Industry, Hanoi

Ha Giang Province, Quang Nam Province

Consultant: Carl Bro/Entec

It has been discussed to create a Credit Facility for Rural Electricification based on Sida soft loans, as a separate agreement, to be used for upgrading and construction of grid connected distribution networks in rural areas and possibly also for microhydro.

Agreement on Energy Cooperation 1994 - 2003 (259 MSEK), COMPLETED

OBJECTIVE: To make the electricity supply more efficient and improve operation of the different actors in the power sector to suit a market economy

Customers Services and Management Training for Power Companies (10 MSEK), (Completed)

Objective: To improve the company performance through strengthening the staff capacity in planning for extension of distribution network, project management and customers’ services

Parties: EVN/Power Company No 3/Hanoi Power Company
SYCON International and AF International

Advisor (4 MSEK)

The long term adviser finished his assignment in Nov. 1995.

Activities to support the EVN equitization process e.g through seminars, training and study tours are included under this heading.

Sida follow up (3 MSEK)

The former long term advisor started as Sida’s advisor based in Sweden from November 1995.

The Swedish support to the energy sector in Vietnam was evaluated during the autumn of 1997.

Review of the Master plan for the Se San river and Feasibility Study for Se San III (18 MSEK), (Completed)

Objective: To elaborate a detailed material to serve as a base during discussions and decision making by Vietnamese parties and financiers for future investments in hydro power development.

Implementing parties: Pre-Investment Department
SWECO, PIDC1

Rehabilitation of GT35 gas turbine in HCMC (14,5 MSEK), (Completed)

Objective: To re-establish the gas turbines original capacity of 15 MW and to secure a stable operation of the turbines during the coming 3 - 4 years period.

Implementing Parties: Thu Duc Power Company
SwedPower AB

Northern Regional Load Dispatch Center (50 MSEK), (Completed)

Objective: To make the distribution of electricity more efficient and to reduce the time for power cuts through connections by remote control.

Implementing parties: National Load Dispach Center
SwedPower AB

ABB Automation Systems AB

Thai Nguyen Distribution Project (34 MSEK), (Completed)

Objectives: To improve the distribution of electricity in Thai Nguyen and thereby facilitate economic development and a higher standard of living for the inhabitants. Capacity building in planning and implementation of distribution network projects.

Implementing parties: Power Company No 1/Thai Nguyen Power Supply Department
SwedPower AB

ABB Substations AB

Ba Dinh Distribution Project, phase II (20 MSEK), (Completed)

Objectives: To improve the distribution of electricity in the Ba Dinh area (Hanoi) and thereby facilitate economic development and a higher standard of living for the inhabitants. Capacity building in planning and implementation of distribution network projects.

Implementing parties: Power Company No 1/Hanoi Power Company
SwedPower AB
ABB Substations AB

Danang Distribution project, phase I (35 MSEK), (Completed)

Objectives: To improve the distribution of electricity in Danang and thereby facilitate economic development and a higher standard of living for the inhabitants. To eleborate a master plan for electricity distribution in Danang. Capacity building in planning and implementation of distribution network projects.

Implementing parties: Power Company no 3/Da Nang Power Supply Department
SwedPower AB
Transelectric AB

Qui Nhon Distribution project, Phase 2 (35 MSEK), (Completed)

Objectives: To improve the distribution of electricity in Qui Nhon and thereby facilitate economic development and a higher standard of living for the inhabitants. Capacity building in planning and implementation of distribution network projects.

Implementing parties: Power Company no 3/Binh Dinh Power Supply Department
Transelectric AB

SCADA system Ho Chi Minh City, Phase 2 (15 MSEK), (Completed)

Objectives: Improved utilization of the distribution network. A reduction in the length of time of power cuts. Improved information about loads in the network which means that unnecessary investments can be avoided. Better safety.

Implementing parties: HCMC Power Company
SwedPower AB
ABB Network Partner

Reserve (28 MSEK)

Objective: To facilitate the implementation by having funds relatively easy accessible when and if unforeseen cost increases occurs in the different projects, after approval from EVN and Sida.

The Song Hinh Multipurpose Project (1996-2004), (COMPLETED)

Objectives: The main objective is to provide additional power generation to the central region of Vietnam and to stabilise the power system. A second objective is to enable an expansion of irrigated areas downstream the power plant. A third objective is to introduce fish farming in the water reservoir of the Song Hinh Dam.

The financing from Sida consists of :

1. Concessionary Credit 213 MSEK for supply of electro-mechanical equipment

Supplier: ABB/Kvaerner/SWECO.

2. Grant 38 MSEK for:

Technical Assistance: Norplan AS

Monitoring: SwedPower AB

Environmental capacity building: SWECO International AB

Emergency Spillway: PECC1, Song Da 6 and Irrigation Construction Co 24

NDF and NIB co-finance the project with 8,7 and 15 MUSD respectively. Vietnam finances the remaining 72,4 MUSD.

Capacity Building in Management and Tunnelling (1997-2000), 27 MSEK (COMPLETED)

Objective: Increased competence in Management and Tunnelling to benefit the development of the energy sector.

Activities: Training courses in Corporate Management, Procurement, Construction Planning, Maintenance and Repair Management, English, and On The Job Training for tunnel excavation crew at Yali and Song Hinh hydropower construction sites.

Implementing parties: Ministry of Construction/Song Da Construction Company
SKANSKA/SMEC

Distribution Projects in Central Vietnam (1997-2005), 122 MSEK

Objectives: Improved capacity and quality of distribution networks in Danang, An Nhon and Tuy Hoa to facilitate social and economic development. Increased capacity within the Power Company No 3 to meet the growing electricity demand. Development of a training-of-trainers programme.

Implementing parties: Power Company no 3
Consultant: SwedPower AB

Suppliers: ELTEL Networks for Danang 2

ABB for An Nhon

ELTEL Networks for Tuy Hoa

National Hydropower Plan, stage 1 (1998-2002), 19 MSEK (COMPLETED)

Co-financed with Norway (total cost stage I: 4 MUSD).

Objectives: The development of alternative power system development strategies and evaluation of these strategies from viewpoints of economic efficiency, investment requirements and environment and social impacts. Development of Vietnam’s institutions, analytical tools and staff skills in these fields.

Implementing parties: MPI/EVN
SWECO/Statkraft/Norplan

National Hydropower Plan, Stage 2, (13 MSEK)

Stage 1 comprised the main five river basins in Vietnam holding about 70-75% of the total exploitable potential in Vietnam. The remaining 25-30% of the potential is shared by four other river basins (Ma-Chu, Vu Gia-Thu Bon, Ba, Sre Pok). The project proposals assume that hydropower projects in these basins can be able to compete with the ranked projects of Stage1. The multipurpose benefits, especially the combination of hydropower with flood control and irrigation, are deemed to be even more pronounced in several of the basins proposed for Stage 2.

Stage 2 shares the development- and project objectives with Stage 1.

In addition, partly based on the experiences from the execution of Stage 1, the following specific objectives will apply for Stage 2:

§ The NHP Study shall be completed to cover the whole country by examining remaining river basins, having attractive hydropower potential with a threshold value over 30MW.

§ Hydropower development combined with improved flood control shall be given priority.

§ The DataBase and Information System shall be fully operational, serving the Client as well as other relevant Vietnamese users.

§ A complete review of the methodology and models used for estimation of the multipurpose benefits shall be undertaken with the aim to improve the quality of these estimates.

§ The stakeholders’ participation procedures shall be further developed and tested.

§ A manual shall be available to enable the Client to update the National Hydropower Plan as found required.

Furthermore, the study will look into the downstream impact in Cambodia from hydropower development in the Sre Pok River on the Vietnamese side. Co-ordination with the Mekong River Commission and Cambodian authorities will take place.

Demand Side Management Programme (1999-2002), 30 MSEK, (COMPLETED)

Objective: to implement a phased DSM Action Plan to capture identified opportunities for cost-effective electricity savings in all sectors and end-use applications by

i) Building institutional capacity and experience to design, implement and evaluate DSM programmes through pilot programmes and training

ii) Development of a DSM policy framework

iii) Introducing minimum efficiency standards for electrical application standards for electrical appliances and new commercial buildings

Comment: The project is being implemented through the World Bank.

Energy Efficiency promotion through the Women’s Union in Vietnam, Lao and Cambodia, 4 MSEK, (COMPLETED)

Objective: To improve the awareness and knowledge among women in Vietnam, Lao and Cambodia on energy conservation and renewable energy

Implementing parties:

Womens Unions in Vietnam, Laos and Cambodia

Foundation EDP

Credit Line Facility for Rural Transformer Stations, I (60 MSEK), (COMPLETED)

Objective: To speed up rural electrification in the southern part of Vietnam by strengthening the transformer station capacity of the rural power system and complement on-going investments in power generation and reinforcement of the distribution system. Six 110 kV transformer stations are being included under the credit line facility.

Implementing parties: Southern Vietnam Power Project Management Board

ABB Substations AB

Credit Line Facility for Rural Transformer Stations, II (80 MSEK)

Implementing parties: Southern Vietnam Power Project Management Board

Suppliers to be procured LCB among Swedish companies