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| TA Name | Preparing the Ban Sok-Pleiku Power Transmission Project in the Greater Mekong Subregion | |||||||||||||||||||||||||||
| Country | Regional | |||||||||||||||||||||||||||
| TA Number | 6481 | |||||||||||||||||||||||||||
| Project Number | 41450- 01 | |||||||||||||||||||||||||||
| Fund Source/Amount[Approved] |
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| Thematic Classification |
Economic growth |
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| Linkage to Country/Regional Strategy |
Lao PDR is among the poorest countries in Asia with a gross domestic product per capita of $490 in 2005. The country has significant hydropower potential, estimated at about 18,000 megawatts (MW), but only 663 MW has been harnessed so far. Thirty-three potential hydropower sites have been evaluated for development, and 11 projects with a total capacity of 4,000 MW are expected to be developed in the next 15 years. Realizing the country's hydroelectric power potential is challenging due to domestic resource constraints on financing its development. Recognizing the need to attract financing, the Government is strongly promoting private sector involvement; as such, most of the future projects were developed by independent power producers under concession agreements with the Government. Due to a fairly low domestic power demand and a rapidly growing power demand in other parts of Southeast Asia, most of the country's hydropower is destined for export, which provides an opportunity to generate much-needed foreign currency revenues to the Government. These revenues will enable investments in rural electrification as well as in other social development and poverty reduction programs. Lao PDR's export of hydropower also benefits other Southeast Asian countries like Thailand and Viet Nam by providing economically efficient and
climate-friendly power sources as compared to more expensive thermal power generation. 1. Viet Nam's economic growth over the past decade was in average about 7.5% per annum. This growth was achieved through sustained business-led growth in economic output and employment. Viet Nam faces a growing electricity supply deficit as a result of strong economic growth. The Sixth power development plan (2006¿2020) projects electricity demand to grow at 16% per annum (base-case scenario) during 2006¿2010, slow to 11% per annum during 2011¿2015, and be at 9% per annum for the remainder of the period. Such high growth rates reflect the country's high level of economic activity. In order to meet its demand Viet Nam is exploring possibility to import electricity from its neighboring country, especially Cambodia, Lao PDR, and People Republic of China (PRC) where investments in hydropower projects make import competitive compare to local coal and gas fired power generation. The governments of Lao PDR and Viet Nam signed a framework agreement to trade power that provides power sale arrangements of up to 7,000 MW by 2020. 2. Regional electricity trade through interconnectivity of electric power grids will provide significant economic benefits for individual countries. Such trade will enable Viet Nam to (i) reduce national investments in the power reserves maintained to meet peak demand; (ii) provide a more reliable supply of electricity, including power supply from an interconnected network in case of power failure; (iii) reduce operational costs; (iv) reduce greenhouse gas emissions and other pollutants; and (v) increase consumers' access to the cheapest and most environment-friendly sustainable source of electricity. In Lao PDR, it will provide foreign revenues from taxes on sale of electricity and from wheeling charges that will help the country to implement among others its rural electrification program. The Country Strategy and Program for Lao PDR has recognized the importance of developing its hydropower for export to generate foreign currency income through royalties, taxes, and dividends to the Government, which will in turn contribute to the country's broader social and economic development. In addition, the Regional Country Strategy Program (2007¿2009) for the Greater Mekong Subregion (GMS) focuses on (i) strengthening physical infrastructure for cross-border connectivity, and (ii) integrating national markets for promoting economic efficiency and private sector development. The GMS's power market is moving toward effective regional cooperation, and Lao PDR is one of the pioneering countries in bilateral power trade in accordance with the GMS's Inter-Governmental Agreement on Regional Power Trade. The proposed project will consist of four components: (i) construction of a 65 kilometer (km)-long 500 kilovolt (kV) double circuit transmission line from Ban Sok substation to the Viet Nam border, (ii) construction of a 100 kilometer (km)-long 500 kilovolt (kV) double circuit transmission line from Lao PDR border to Plei Cu substation, (iii) construction of the 500/230 kV Ban Sok substation in Lao PDR and (iv) extension of the existing Plei Cu 500/230kV substation in Viet Nam. The 500kV transmission line and the Ban Sok substation will be used as a common transmission facility to evacuate power from the Xekaman 1 (488MW), Nam Kong 1 (229MW); Se Kong 4 (464MW) and Xe Kong 5 (388MW) hydropower projects, which have a total capacity of over 1,500 MW. The facilities in Lao PDR will be owned by EdL and will be operated and maintained by an EdL¿EVN joint venture or any other form of association that will ensure expecting level of reliability of the transmission facilities and at the same time provide necessary capacity building to EdL. Each hydropower project will construct a dedicated power transmission line to the Ban Sok substation. |
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| Impact | The impact of the PPTA will be to promote the economic growth of the country and region by helping Lao PDR to develop its hydroelectric power resource in an environmentally and socially sustainable manner. It will also promote power trade in the GMS. | |||||||||||||||||||||||||||
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| Geographical Location | From Ban Sok substation in South Lao PDR and to Plei Cu substation in Viet Nam. | |||||||||||||||||||||||||||
Safeguard Categories
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| Environment | B | |||||||||||||||||||||||||||
| Resettlement | A | |||||||||||||||||||||||||||
| Indigenous People | B | |||||||||||||||||||||||||||
| Summary of Environmental and Social Issues |
The new Ban Sok substation will be on government land that is wholly owned with clear title and free of any informal settler issues and will cause no resettlement impact. The Pleiku substation is an existing substation, wholly owned with
clear title and free of any informal settler issues, will not require any land acquisition, or cause any resettlement impact. For the transmission lines, towers and alignments will impact houses and residential and agricultural land. The TA consultants will conduct surveys and will elaborate on resettlement plans in both countries as needed. The TA consultants will also conduct due diligence. |
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| Stakeholder Participation and Consultation |
The potential initial stakeholders include the private sector hydropower developers who will use the common transmission facility; commercial financers to the hydropower projects; government entities such as the Ministry of Finance,
Ministry of Energy and Mines, and EdL; EVN; the population affected by the project due to land acquisition; and the civil society and nongovernment organizations interested in hydropower development in the Lao PDR. |
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| Responsible ADB Officer |
Xavier Humbert |
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| Responsible ADB Department |
Southeast Asia Department |
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| Responsible ADB Division |
Energy and Water Division, SERD |
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| Executing Agencies |
Asian Development Bank Xavier Humbert Senior Energy Specialist xhumbert@adb.org |
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| Timetable | ||||||||||||||||||||||||||||
| Concept Clearance | 17 Mar 2008 | |||||||||||||||||||||||||||
| Fact-finding | 14 Feb 2008 to 21 Feb 2008 | |||||||||||||||||||||||||||
| Approval | 26 Aug 2008 | |||||||||||||||||||||||||||
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