Skip to main content

Ha Noi and Ho Chi Minh City Power Grid Development Sector Project

Strengthened capacities and reliabilities of power infrastructure in the two largest cities of Viet Nam.

Sectors
Energy
Country
Viet Nam
Partners
Approval
Jump to: Financing Issue Solution ACGF Support

Financing

Total Project Cost

$272.7 million

ADB Financing

$172.7 million

AIF Financing

$100 million

ISSUE

High energy intensity and low reliability of power supply due to system outdatedness and constraints in the power grid.

Expanding the power system capacity in a sustainable manner to meet the rapidly growing electricity demand is a key priority of the Vietnamese Government. According to the National Power Development Plan between 2011 and 2020 with Orientation Towards 2030 (PDP7), demand was expected to continue growing rapidly from 120 TWh in 2012 to 330 TWh in 2020 and potentially up to 700 TWh in 2030. To meet the growing demand, generation capacity needed to be strengthened from 26.5 GW in 2012 to 75 GW in 2020. Nearly 44,000 km of 500 kV and 75,000 km of 220 kV lines were also to be constructed to effectively transmit the generated power to the load centers. Total investment for the power sector up to 2020 was estimated to be $48.8 billion, of which $16.3 billion was for grid augmentation. In the distribution subsector, particularly in Ha Noi and Ho Chi Minh City, their combined peak load of over 6.1 GW in 2012 or 23% of the total domestic load, was expected to nearly double to 11.2 GW by 2020. The investment needs up to 2015 for EVN HANOI and EVN HCMC were $987 million and $997 million, respectively. Viet Nam's elasticity ratio of electricity demand growth rate against GDP growth rate had averaged around 2.0. PDP7 called for reducing it to 1.5 by 2015 and to 1.0 by 2020. EVN had made a steady reduction of system losses from 12.2% in 2003 to 9.2% in 2012. At the distribution level, EVN HANOI targeted reducing its losses from 7.1% in 2012 to 6.0% by 2020, while EVN HCMC planned to reduce it from 5.6% in 2012 to 5.0% in 2020. To further improve system reliability, both power corporations targeted reducing their respective system average interruption duration indexes by 3040% by 2014 compared to 2012 levels. The indexes before this project were very high compared to developed country utility standards, due to antiquated equipment and inadequate capacities of the networks causing overloadings and short-circuits.

SOLUTION

Growth in national electricity demand met sustainably, through improved reliability and efficiency of electricity supply.

The project supported rehabilitation, expansion and development of the 220 kV and 110 kV electricity power grids in the respective cities. The Vietnamese Government requested a sector loan from ADB's OCR and a sector loan funded through participation of AIF to assist with the financing of the project. As of September 25, 2018, two core subprojects in Ha Noi have been completed with 50 MVA of 110 kV substations and 10 cct-km of 100 kV transmission lines have been developed. One core subproject was under construction with targeted completion date of December 2018, and another one was under revised technical designs approval process with completion date of December 2019. Three core subprojects were completed with 500 MVA of 220 kV substations, 252 MVA of 110 kV substations, and 4.3 cct-km of 110 kV transmission lines developed. The last core subproject was scheduled for completion in Q4 2018 with the development of 13.4 km of 110 kV and 13.4 km of 220 kV transmission line. Seven noncore subprojects in Ha Noi completed with 355 MVA of 110 kV substations, 65 cct-km of 110 kV transmission lines, and 8.2 cct-km of 220 kV transmission lines were developed. One noncore subproject was under construction with targeted completion date of June 2019. With the completion of one noncore subproject in HCMC in 2017, 126 MVA of 110kV substations and 2.3 cct-km of 110kv transmission lines were developed.