Viet Nam: Dakdrinh 125MW Hydropower Plant

OBJECTIVE

The objective is to mobilize private capital for the restructuring of the existing debt of the 125MW Dakdrinh Hydropower Plant in Central
Viet Nam.

DESCRIPTION

The Project involves the refinancing of the existing debt of the 125MW Dakdrinh Hydropower Plant in Central Viet Nam, majority-owned by PV Power. The hydropower plant has been built and is in operation since 2014. The total Project cost in 2011 was VND5,921 billion (USD280 million), and the Project was partially funded by a USD178 million loan with cover from an export credit agency, and a guarantee by the Government of Viet nam (GoV). The refinancing of the Project involves removal of the sovereign guarantee from the GoV and insurance cover in support of the existing debt financing.

The proposed financing involves an AIIB A/B loan of up to USD95 million, with an A Loan facility for AIIB's own account in the amount of USD47.5million million and B-loan participation of USD47.5 million from commercial bank(s).

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy. AIIB’s Environmental and Social Policy (ESP), including the Environment and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL), applies to this Project. ESS 1 (Environmental and Social Assessment and Management) applies since the Project involves a large dam, and the civil works done in the earlier construction of the dam and its ancillary facilities will require continuing management and monitoring of environmental and social aspects. ESS 2 (Involuntary Resettlement) applies, as the dam construction required temporary and permanent land acquisition and resettlement of affected persons. ESS 3 (Indigenous Peoples) applies as ethnic minorities are present in the Project area.

Environmental Aspects. ES due diligence (ESDD) was conducted on the EIA (Environmental Impact Assessment) prepared prior to construction of the dam. Legacy issues and residual impacts were assessed during the ESDD. The continuing environmental aspects to manage are in relation to dam safety aspects, labor management, occupational health and safety (OHS), biodiversity, erosion and sediment management, etc.

Social Aspects. The draft Land Acquisition Completion Report (LACR), undertaken as part of the ESDD, indicates that six communes in two provinces were affected by land acquisition and resettlement, and eight resettlement sites and five resettlement agricultural areas (RAs) had been developed to accommodate the physically and economically displaced people. A draft Indigenous Peoples Plan (IPP) has been prepared to address the special needs of ethnic minorities in the Project area who were subject to earlier resettlement and associated physical and economic displacement. There are social legacy issues identified in the LACR and IPP, which will be addressed under the Project.

ESCAP. Based on the ESDD, an Environmental and Social Corrective Action Plan (ESCAP) has been prepared to guide implementation of a series of measures to address outstanding ES issues and provide for monitoring and supervision of their implementation. The LACR and IPP together with the Stakeholder Engagement Plan (SEP), have been integrated into the ESCAP. In addition, the preparation of an Emergency Preparedness and Response Plan (EPRP) and Community Health and Safety Plan (CHSMP) are components of the ESCAP. A project-level Grievance Redress Mechanism (GRM) will be established as an element of the SEP and included in the ESCAP.

The Client has disclosed the ESCAP, in English and in Vietnamese, at the following link. The ESCAP is also available on AIIB's website. The EIA in English and Vietnamese and the LACR, IPP and SEP in English, with summaries in Vietnamese, have also been posted on these two websites.