Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES23924 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DISTRIBUTION EFFICIENCY PROJECT (IDA CREDIT NO. 5156) AND A CLEAN TECHNOLOGY FUND (CTF NO.13468) AND A AUSTRALIAN TRUST FUND (TF NO. 13456) TO THE SOCIALIST REPUBLIC OF VIETNAM June 15, 2016 ENERGY & EXTRACTIVES GLOBAL PRACTICE EAST ASIA AND PACIFIC REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS AMI Advanced Metering Infrastructure CTF Clean Technology Fund ERAV Electricity Regulatory Authority of Vietnam Regional Vice President: Victoria Kwakwa Acting Country Director: Achim Fock Practice Manager: Julia Fraser Task Team Leaders: Van Tien Hung 2 SOCIALIST REPUBLIC OF VIETNAM Distribution Efficiency Project CONTENTS A. SUMMARY Page 4 B. PROJECT STATUS Page 5 C. PROPOSED CHANGES Page 5 ANNEX 1: RESULTS FRAMEWORK AND MONITORING Page 6 3 DATA SHEET Vietnam Distribution Efficiency Project (P125996) EAST ASIA AND PACIFIC Energy & Extractives Report No: RES23924 Basic Information Specific Investment Project ID: P125996 Lending Instrument: Loan Regional Vice President: Victoria Kwakwa Original EA Category: Partial Assessment (B) Country Director: Achim Fock Current EA Category: Partial Assessment (B) Original Approval Senior Global Practice Director: Anna M. Bjerde 11-Sep-2012 Date: Practice Manager/Manager: Julia M. Fraser Current Closing Date: 31-Dec-2018 Hung Tien Van,Hung Team Leader(s): Tan Tran Borrower: Socialist Republic of Vietnam Socialist Rep Vietnam Electricity, Northern Power Corporation, Southern Power Corporation, Responsible Agency: Central Power Corporation, Hanoi Power Corporation and Ho Chi Minh City Power Corporation and Electricity Regulatory Authority of Vietnam Restructuring Type Form Type: Short Form Decision Authority: CD Decision Restructuring Level: Level 2 Financing ( as of 15-Jun-2016 ) Key Dates Revised Effectiveness Original Project Ln/Cr/TF Status Approval Date Signing Date Closing Date Closing Date Date 31-Dec- P125996 IDA-51560 Effective 11-Sep-2012 08-Nov-2012 07-Feb-2013 31-Dec-2018 2018 30-Jun- P125996 TF-13456 Effective 08-Nov-2012 08-Nov-2012 07-Feb-2013 30-Jun-2016 2016 31-Dec- P125996 TF-13468 Effective 11-Sep-2012 08-Nov-2012 07-Feb-2013 31-Dec-2018 2018 Disbursements (in Millions) % Disburse Undisbu Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbur d rsed sed 4 P125996 IDA-51560 Effective USD 448.90 448.90 0.00 347.56 87.32 77 P125996 TF-13456 Effective USD 5.63 5.63 0.00 5.30 0.47 94 P125996 TF-13468 Effective USD 30.00 30.00 0.00 1.94 28.06 6 Policy Waivers Does the project depart from the CAS/CPF in content or in other significant respects? Yes [ ] No [ X ] Does the project require any policy waiver(s)? Yes [ ] No [ X ] A. Summary of Proposed Changes 1. The proposed Level 2 restructuring of the Distribution Efficiency Project responds to the request from the State Bank of Vietnam received on May 10, 2016. It is proposed to remove the project's results framework from the Loan Agreement/ Financing Agreement/ Grant Agreement and/or relevant Supplemental Letter and place said indicators in the relevant project manual. 2. This proposed amendment is part of the one-time amendment for 13 projects in order to assist the facilitation of timely and successful implementation activities and results of all 13 projects. B. Project Status The progress towards achieving the project development objective (PDO) and implementation progress are rated satisfactory. The PDO is (i) to improve the performance of Vietnam’s Power Corporations in providing quality and reliable electricity services and to (ii) reduce greenhouse gas emissions through demand side response and efficiency gains. The PDO remains highly relevant and achievable by the project closing date of December 31, 2018. Project status: Distribution subprojects implemented by the Power Corporations (PCs) under Component A which is funded by IDA Cr. 5156-VN are progressing well with 85% of total work volume completed and 78% of the Credit disbursed. The PCs are expected to complete the original subprojects by December 31, 2016 and will use the remaining time to implement additional subprojects proposed to be financed with the cost savings as a result of efficient procurement. The progress of Component B (Introduction of Smart Grid Technologies), which is funded by both TF-13468 and IDA Cr.5156-VN, has made progress following initial delays, and the first set of Advanced Metering Infrastructure (AMI) contracts have been signed. All contracts under the Technical Assistance (TA) Component C, which is funded by both TF-13456 and IDA Cr.5156- VN, have been signed and being implemented as scheduled. The Power Corporations need to accelerate the remaining activities under this Component as the Closing Date of the Australian Grant Agreement is June 30, 2016. 5 ANNEX 1: RESULTS FRAMEWORK AND MONITORING Distribution Efficiency Project (IDA No. 5156) Clean Technology Fund (CTF No. 13468) Australian Trust Fund (ATF No. 13456) Distribution Efficiency Project (IDA Credit No. 5156): Financing Agreement Sections II.A and II. B of Schedule 2 Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. (a) The Recipient, acting through the Ministry of Industry and Trade, shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of the indicators set forth below in sub-paragraph (b) of this paragraph. Each Project Report shall cover the period of one calendar year, and shall be furnished to the Association not later than forty-five (45) days after the end of the period covered by such report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 1. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (a) system average interruption duration index (b) system average interruption frequency index 2. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 3. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 4. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 5. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power 6 Corporation Distribution Efficiency Project (IDA Credit No. 5156): Project Agreement: Sections II.A and II. B of Schedule Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. (a) The Power Corporations shall monitor and evaluate the progress of their Respective Parts of the Project and prepare Project Reports for their Respective Parts of the Project in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of the indicators set forth below in subparagraph (b) of this paragraph. Each such Project Report shall cover the period of one (1) calendar year, and shall be furnished to the Recipient and Vietnam Electricity not later one (1) month after the end of the period covered by such report for incorporation in and forwarding by the Recipient to the Association of the overall Project Report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 6. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (c) system average interruption duration index (d) system average interruption frequency index 7. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 8. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 9. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 10. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power 7 Corporation, and Ho Chi Minh City Power Corporation Part A of the Project 11. Progress in construction and reinforcement of 110 kilovolt transmission lines of each of the Power Corporations 12. Progress in construction and reinforcement of 110 kilovolt substations of each of the Power Corporations 13. Progress in construction and reinforcement of medium and low voltage transmission lines of each of the Power Corporations 14. Progress in construction and reinforcement of medium and low voltage substations of each of the Power Corporations Part B of the Project 15. Progress in introduction of advanced metering infrastructure systems for each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation 16. Progress in introduction of supervisory control and data acquisition systems for each of the Power Corporations Part C.2 of the Project 17. Progress in provision of technical assistance to the Power Corporations 2. The Power Corporations shall provide to the Recipient not later than five (5) months after the Closing Date, for incorporation in the report referred to in Section 4.08 (c) of the General Conditions all such information as the Recipient or the Association shall reasonably request for the purposes of that Section. Clean Technology Fund (CTF No. TF013468-VN): Loan Agreement Sections II.A and II.B of Schedule 1 Section II. Project Monitoring, Reporting and Evaluation A. Project Reports; Completion Report 1. (a) The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of the indicators set forth below in sub-paragraph (b) of this paragraph and the Project Reports prepared by the Power Corporations pursuant to Section II.A.1 (a) of the Schedule to the Project Agreement for their Respective Parts of the Project. Each overall Project Report shall cover the 8 period of one (1) calendar year, and shall be furnished to the World Bank not later than forty-five (45) days after the end of the period covered by such report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 18. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (e) system average interruption duration index (f) system average interruption frequency index 19. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 20. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 21. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 22. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation 2. The Borrower shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than six (6) months after the Closing Date. Clean Technology Fund (CTF No. TF013468-VN): Project Agreement Sections II.A and II.B of Schedule Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. (a) The Power Corporations shall monitor and evaluate the progress of their Respective Parts of the Project and prepare Project Reports for their Respective 9 Parts of the Project in accordance with the provisions of Section 2.06 (b) (i) of the Standard Conditions and on the basis of the indicators set forth below in subparagraph (b) of this paragraph. Each such Project Report shall cover the period of one (1) calendar year, and shall be furnished to the Borrower and Vietnam Electricity not later one (1) month after the end of the period covered by such report for incorporation in and forwarding by the Borrower to the World Bank of the overall Project Report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 23. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (g) system average interruption duration index (h) system average interruption frequency index 24. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 25. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 26. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 27. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation Part A of the Project 28. Progress in construction and reinforcement of 110 kilovolt transmission lines of each of the Power Corporations 29. Progress in construction and reinforcement of 110 kilovolt substations of each of the Power Corporations 30. Progress in construction and reinforcement of medium and low voltage transmission lines of each of the Power Corporations 31. Progress in construction and reinforcement of medium and low voltage substations of each of the Power Corporations 10 Part B of the Project 32. Progress in introduction of advanced metering infrastructure systems for each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation 33. Progress in introduction of supervisory control and data acquisition systems for each of the Power Corporations Part C.2 of the Project 34. Progress in provision of technical assistance to the Power Corporations 2. The Power Corporations shall provide to the Borrower not later than five (5) months after the Closing Date, for incorporation in the report referred to in Section 2.06 (c) of the Standard Conditions all such information as the Borrower or the World Bank shall reasonably request for the purposes of that Section. Australian Trust Fund - World Bank for Strategic Partnership in Vietnam (TF13456): Grant Agreement (Sections II.A and II.B of Schedule) Section II. Project Monitoring, Reporting and Evaluation A. Project Reports; Completion Report 1. (a) The Recipient shall monitor and evaluate the progress of its Respective Part of the Project and prepare Project Reports in accordance with the provisions of Section 2.06 of the Standard Conditions and on the basis of the indicators set forth below in sub-paragraph (b) of this paragraph and the Project Reports prepared by the Power Corporations pursuant to Section II.A.1 (a) of the Schedule to the Project Agreement for their Respective Parts of the Project. Each overall Project Report shall cover the period of one (1) calendar year, and shall be furnished to the World Bank not later than forty-five (45) days after the end of the period covered by such report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 35. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (i) system average interruption duration index (j) system average interruption frequency index 11 36. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 37. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 38. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 39. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation Part C.1 of the Project 40. Progress in provision of technical assistance to the Electricity Regulatory Authority of Vietnam 2. The Recipient shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than six (6) months after the Closing Date. Australian Trust Fund - World Bank for Strategic Partnership in Vietnam (TF13456): Project Agreement (Sections II.A and II.B of Schedule) Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. (a) The Power Corporations shall monitor and evaluate the progress of their Respective Parts of the Project and prepare Project Reports for their Respective Parts of the Project in accordance with the provisions of Section 2.06 (b) (i) of the Standard Conditions and on the basis of the indicators set forth below in subparagraph (b) of this paragraph. Each such Project Report shall cover the period of one (1) calendar year, and shall be furnished to the Recipient and Vietnam Electricity not later one (1) month after the end of the period covered by such report for incorporation in and forwarding by the Recipient to the World Bank of the overall Project Report. (b) The performance indicators referred to above in sub-paragraph (a) consist of the following: No. Indicator Project Objectives 12 41. Reliability of electricity supply, as evidenced by the following for each of the Power Corporations’ in the Project area, calculated in accordance with the methodology set forth in the Vietnam Distribution Code: (k) system average interruption duration index (l) system average interruption frequency index 42. Quality of electricity supply, as evidenced by each of the Power Corporations’ voltage excursion outside + / -5% in relation to 110 Kilovolt and medium voltage transformers in the Project area 43. Total distribution losses, as evidenced by each of the Power Corporations’ losses in the Project area 44. Consumption reduction in relation to advanced metering infrastructure system customers of each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation relative to business as usual 45. Avoided greenhouse gas emissions in relation to each of Northern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation Part C.2 of the Project 46. Progress in provision of technical assistance to the Power Corporations 2. The Power Corporations shall provide to the Recipient not later than five (5) months after the Closing Date, for incorporation in the report referred to in Section 2.06 (c) of the Standard Conditions all such information as the Recipient or the World Bank shall reasonably request for the purposes of that Section. 13