Grant Assistance Report

Transcription

1 Grant Assistance Report Project Number: May 2008 Proposed Grant Assistance Socialist Republic of Viet Nam: Livelihood Improvement of Vulnerable Ethnic Minority Communities Affected by the Song Bung 4 Hydropower Project in Quang Nam Province (Financed by the Japan Fund for Poverty Reduction)

2 CURRENCY EQUIVALENTS (as of 30 April 2008) Currency Unit dong (D) D1.00 = $ $1.00 = D16, ABBREVIATIONS ADB Asian Development Bank CPC commune people's committee CSP country strategy and program DPC district people's committee DRC district resettlement committee EVN Viet Nam Electricity FIDR Foundation for International Development and Relief JBIC Japan Bank for International Cooperation JFPR Japan Fund for Poverty Reduction NGO nongovernment organization PPC provincial people's committee RMIU resettlement management and implementation unit SB4HPPMU Song Bung 4 Hydropower Project Management Unit SEDP socioeconomic development plan SOE statement of expenditure VRDG village resettlement and development group NOTES (i) (ii) The fiscal year of the Government of Viet Nam ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2008 ends on 31 December In this report, $ refers to US dollars. Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. R. Cooney, Infrastructure Division, SERD Team leader Team members P. Perera, Energy Specialist, SERD G. Atay, Principal Counsel, Office of the General Counsel M. Huddleston, Senior Social Development Specialist, SERD T. Mella, Associate Operations Analyst SERD A. Samoza, Associate Project Analyst SERD M. Sultana, Social Development Specialist, SERD

3 A Vuong Song Bung 5 Song Con 2 Sg. Vu Gia VU GIA Da Nang Sg. Thu Bon Sg. Vu Gia SOCIALIST REPUBLIC OF VIET NAM LIVELIHOOD IMPROVEMENT OF VULNERABLE ETHNIC MINORITY COMMUNITIES AFFECTED BY THE SONG BUNG 4 HYDROPOWER PROJECT Sg. Bung Song Bung 2 Sg. Vinh Sg. Tra Vinh Song Bung 4 Sg. Thanh Dak Mi 4 THU BON N Kilometers Song Tranh o 00'E HA NOI 110 o 00'E PEOPLE'S REPUBLIC OF CHINA National Capital Town Hydropower Project Status Under Construction Dak Mi 1 20 o 00'N LAO PEOPLE'S DEMOCRATIC REPUBLIC Vinh Hai Phong Gulf of Tonkin o 20 00'N PROJECT LOCATION Da Nang EG Selected River International Boundary Boundaries are not necessarily authoritative. Gulf of Thailand 10 o 00'N C A M B O D I A 105 o 00'E Nha Trang Da Lat Ho Chi Minh City Vung Tau Quy Nhon South China Sea 110 o 00'E 10 o 00'N

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5 I. Basic Data Name of Proposed Activity Country JAPAN FUND FOR POVERTY REDUCTION (JFPR) JFPR Grant Proposal Livelihood Improvement of Vulnerable Ethnic Minority Communities Affected by the Song Bung 4 Hydropower Project in Quang Nam Province Viet Nam Grant Amount Requested $2,000,000 Project Duration 4 years Regional Grant Yes / No Grant Type Project / Capacity building II. Grant Development Objectives and Expected Key Performance Indicators Grant Development Objectives: The goals of the JFPR grant-financed activities are to improve the living standards and reduce the prevalence of poverty of the people who will be affected by the proposed Song Bung 4 Hydropower Project, the majority of whom are poor (over 70% of the people are below the national poverty line) and vulnerable ethnic minority people living in a remote mountainous area in central Viet Nam. The project will support (i) adapting the relocated villagers to the new natural and social environment; (ii) developing land use and agricultural practices, pond fish raising, livestock breeding, community forestry management, and additional income-generation opportunities; (iii) increasing and strengthening the capacity of the ethnic minority people through a participatory approach to enable them to take a key role in livelihood development; and (iv) increasing the competence and capacity of district and province-level staff and organizations in resettlement management and livelihood restoration. This will set an example on how the resettlement and livelihood restoration of ethnic minorities affected by large infrastructure projects can be done in a participatory and culturally appropriate manner. Expected Key Performance Indicators: (i) All households in resettlement villages (206 households) have productive land for rice and upland crops, improved livestock, fish ponds, and access to community-managed forest. They have improved their capacity to manage the available natural resources in a sustainable way leading to long-term poverty reduction. (ii) All affected households have increased their knowledge and capacity through training in relocation, social stability, and health and livelihood improvement. (iii) Women beneficiaries have increased their knowledge of resettlement logistics and livelihood activities. This includes developing village-level women extension workers; women s unions and women beneficiaries are included in the resettlement committees. (iv) The Government and village organizations involved in project implementation have increased their capacities through relevant capacity building and training. Resettlement and livelihood activities are implemented as scheduled. (v) Implementation of the livelihood development activities has been undertaken within the context of ethnic minority sociocultural settings and in a participatory manner, which has led to the empowerment of the beneficiaries. III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures Category Amount of Grant Allocated in $ Percentage of Expenditures 1. Civil Works 470, Equipment and Supplies 703, Training, Workshops, and Seminars 169, Consulting Services 442, Grant Management and Monitoring 151, Contingency 63, Total 2,000, Incremental Cost Not Applicable

6 2 A. Other Data Date of Submission of Application Project Officer Project Officer s Division, , Phone Other Staff Who Will Need Access to Edit/Review the Report Sector Subsector Themes Subthemes Targeting Classification Was JFPR seed money used to prepare this grant proposal? Have SRC Comments been reflected in the proposal? Name of Associated Asian Development Bank (ADB) Financed Operations JAPAN FUND FOR POVERTY REDUCTION JFPR Grant Proposal Background Information 15 November 2006 Pradeep Perera, Financial Specialist Infrastructure Division (SEID), Southeast Asia Department pperera@adb.org Phone: Ext. 6571/Direct: 5830 Marla Huddleston, SEID Monawar Sultana, SEID Tess Mella, SEID Margarita Javier, SEID Agriculture and natural resources Forest Inclusive social development, gender and development, capacity development Indigenous peoples; gender equity in empowerment and rights; client relations, network, and partnership development Targeted intervention Yes [ ] No [ ] Yes [ ] No [ ] Song Bung 4 Hydropower Project. The proposed ADB project will finance the construction of the power plant and associated facilities; counterpart funds from Viet Nam Electricity (EVN) will finance the compensation, resettlement site preparation, housing and common facilities, and transitional allowances for the people affected by the project. The proposed JFPR grant will complement the ADB loan in financing a sustainable livelihood development program for affected ethnic minority communities. Benefit Sharing of Revenues from Hydropower Projects with Affected Communities (TA 4689-VIE). The technical assistance will develop and pilot a mechanism for a proportion of hydropower revenues to be allocated towards (i) mitigating the long-term social and environmental impacts of hydropower projects, and (ii) benefitting the communities adversely affected by hydropower projects.

7 3 Executing Agency Grant Implementing Agencies Quang Nam Province People's Committee Contact Person: Mr. Tran Van Tri Director Department of Planning and Investment 02 Tran Phu Street, Tam Ky Quang Nam Province, Viet Nam Telephone: Fax: Mobile: Nam Giang District People's Committee Contact Person: Mr. A Lang Mai Vice Chairman Nam Giang District People's Committee Nam Giang, Quang Nam, Viet Nam Telephone: Fax: Mobile: Dai Loc District People's Committee Contact Person: Mr. Phan Duc Tinh Vice Chairman Dai Loc District People's Committee Dai Loc, Quang Nam, Viet Nam Telephone: Mobile: B. Details of the Proposed Grant 1. Description of the Components, Monitorable Deliverables/Outcomes, and Implementation Timetable Component A Component Name Cost ($) $783,736 Component Description Livelihoods Restoration and Development Program for People Affected due to Reservoir Inundation Background. Nam Giang district of Quang Nam Province in central Viet Nam, where the Song Bung 4 Hydropower Project is located, has a high incidence of poverty with approximately 52.6% of the population living below the poverty line. The four Co Tu ethnic minority villages with 206 households from Zuoih commune in Nam Giang District will be relocated and 50 Co Tu households in Ta Binh commune will lose agricultural land as a result of the Song Bung 4 Hydropower Project. Over 70% of the population in Zuoih commune and over 50% in Ta Binh commune live below the poverty line. The baseline survey of the four ethnic minority affected villages indicates that about half of the households in three of the villages do not have rice supply to last for an entire year. Households depend heavily on subsistence farming, nontimber forest products, and river fishery. Two main sources of cash income are forest products and animal husbandry. The household income data indicates that, except for one village, more than 40% of the households have a yearly cash income of less than D5 million ($320).

8 4 Component. The objective of this component is to restore and improve the livelihoods of the people resettled due to the Song Bung 4 reservoir, including the host population in Zuoih commune, and the households losing cultivation land to the reservoir in Ta Binh commune. The direct resettlement activities such as preparation of resettlement sites, access roads, housing, community facilities such as schools, health centers, cash compensation for lost assets, and limited livelihood assistance will be financed by EVN, the project developer of the Song Bung 4 Hydropower Project. The JFPR grant will finance enhanced livelihood improvements that will complement the activities financed by EVN. These are required to improve the livelihood of people resettled in a sustainable manner. The physical inputs to be financed under the JFPR grant for this component will be procured using shopping procedures as outlined in ADB s Procurement Guidelines (2007, as amended from time to time). Subcomponents. This component has five subcomponent programs: (i) crop development, (ii) livestock development, (iii) fisheries development, (iv) village forestry management and development, and (v) nonfarm income generation. The crop development program will support and give assistance to develop upland crop lands, wet rice fields, permanent rain-fed gardens, fields, and orchards within, and in the vicinity of, the new resettlement sites. Materials like seeds, seedlings, fruit tree plants, organic fertilizers, and cultivation tools will be provided to the beneficiaries. Capacity training will be provided to the beneficiaries in the villages to learn and develop cultivation methods and productivity. In addition, village-level agriculture extension workers will be trained. The crop development program will also comprise development of water user groups and training to operate and maintain the irrigation systems. Activities under this subcomponent include: (i) developing wet rice paddy fields; (ii) developing permanent rain-fed gardens, fields, and orchards; (iii) developing rotational upland crop fields; (iv) providing seeds and promoting organic fertilizers; (v) developing nurseries for perennial crops and upland crops including rice; (vi) providing agricultural tools; (vii) organizing and establishing water user groups; (viii) planning and implementing technical capacity training in (a) wet rice production (including land preparation, seedling production, transplanting, and organic and inorganic fertilizers); (b) upland crop production (including maize, beans, and sesame); (c) seed treatment and storage; (d) storage of products; (e) preparation of produce for marketing; (f) fruit tree cultivation and propagation; and (g) irrigation systems management; (ix) on-farm demonstrations The livestock development program will be developed to meet family nutrition needs as well as for income generation. The livestock program will include cattle fattening and pig productivity improvement. A poultry program will focus on backyard poultry rearing, while duck rearing will include village-level pond raising and/or duck raising in the reservoir. Animal disease prevention and management is an important training task. The training of village-based extension workers will strengthen villagers existing knowledge and improve village-level veterinary service systems. One male and one female livestock extension worker will be developed in each village. Villagers will be encouraged to vaccinate their animals and poultry for common diseases, and deworm calves to minimize parasite

9 diseases in order to increase the survival rate. In the new resettlement sites, fodder development programs will be developed if required. At present the village has common grazing land in and around the village and in the forest. As part of the program, extension knowledge will be provided for improved cattle, pig, and poultry feed. Hygiene aspects in animal breeding will also be a target for training in order to improve both animal and human health. Activities: (i) support and assist redevelopment of grazing lands; (ii) develop grazing practices, fodder, and fencing; (iii) provide improved stock for breeding; (iv) provide animal medicines and improve animal health through training; and (v) provide long-term extension activities, including training aimed at improving the sustainability and productivity of livestock production. The fisheries development program will consist of two main components: (i) reservoir fisheries, and (ii) pond aquaculture development. The exact type of reservoir fisheries will be developed during the implementation phase in consultation with the villagers, but the program will mainly include training and supply of fishing gear, paddle boats, and fish cages, as appropriate. The Project will prepare fishponds for the villagers that will lose their fisheries in the Bung River. Assistance will be provided for start-up of the fishponds and training on management of the ponds. In Co Tu villages it is women who take daily care of fish culture activities in the ponds. At present pond fish culture is not very productive; many fish die of diseases and fishponds only supplement household diets. Development of aquaculture has potential both to improve the nutritional status of households and improve income levels. One male and one female fishery extension worker will be trained in each village. Activities: (i) activities specific to reservoir fisheries: (a) support the establishment and operation of reservoir fisheries, (b) support purchase or fabrication of small paddle boats, (c) support purchase of fish cages, (d) provision of reservoir fishing gear, and (e) training in reservoir fishing. (ii) activities specific to pond fish raising: (a) support to build fishponds, (b) support to manage water supply to the fishponds, and (c) training in fish breeding. The village forestry management and development program will develop sustainable utilization of the nontimber forest products, forest protection, and upland food and industrial crops cultivation. It will comprise land-use planning and zoning of the forests for different types of forest, i.e., conservation and protection forest and utilization and production forest, as well as development of user rights for the villages. An enrichment planting program will be developed for the production forest area, and the households affected by the reservoir inundation in Zuoih and Ta Binh villages will be provided with fast-growing species that can be harvested for selling after a few years. Village-based nurseries will be established for providing seedlings. Villagers will be assisted in interplanting tree crops with upland rice and other upland food crops. Since women play a significant role in collection of nontimber forest products, women beneficiaries will be included in forestry management and development programs. 5

10 6 Activities: (i) participatory forest inventory, (ii) allocation of land for production forest, (iii) forest products demand assessment, (iv) establishment and operation of village nurseries, (v) organization of forest tree planting (vi) provision of tools, and (vii) land allocation for community-based forestry development. The nonfarm income-generation program will be based on improving the cash income generation of the relocated people, as some of the previous incomegeneration activities may no longer be possible and new opportunities are likely to be available in the new villages. However, the beneficiaries need assistance and capacity training in order to benefit from the available options. The specific training needs and persons selected for the training will be decided in consultation between the villagers and the implementing nongovernment organization (NGO). The training needs suggested by the villagers include knowledge about markets, marketing and pricing of handicrafts produced by the villages, rice whiskey making, machinery repairs, and tofu making. Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities Activities: (i) participatory planning of the nonincome-generating activities preferred by the beneficiaries, and (ii) provision of training and equipment for the identified nonincomegenerating activities. (i) All households have received productive land and land-use certificates for 1.5 hectares (ha) for permanent agriculture; land has been developed for rice and crop production in the first year of relocation. (ii) All villages have been allocated communal forest management rights for the community-based forestry development in the first year of relocation. (iii) 80% of beneficiaries consisting of both men and women are targeted for crop development training and have improved their agricultural production. (iv) 80% of beneficiaries including women have received training on livestock and have improved livestock production. (v) Village-level agricultural, livestock, and forestry extension workers, including women extension workers, have been trained and developed. (vi) Beneficiaries have been provided with fishponds and training in pond fish breeding and production is sufficient for household needs. (vii) Village tree nurseries have been established and forestry program implemented. (viii) Training in, and provision of, alternative income opportunities provided for at least 25% of the households. 48 months Component B Component Name Community Mobilization and Capacity Building Cost ($) $60,560 Component Description Community mobilization of the beneficiaries is critical to increase their awareness and understanding in resettling themselves effectively in their new environment. Capacity building is an essential part of community mobilization of beneficiaries. Community mobilization and capacity building of the affected households will increase their voice in planning and implementing resettlement activities which is critical to restoring their income and improving their livelihood. The capacity-building training will enable beneficiaries to (i) effectively

11 participate in consultation processes, (ii) build infrastructure in resettlement sites, (iii) negotiate their entitlement and compensation, (iv) properly manage compensation money, (v) and plan livelihood programs and health-related activities. Increasing the beneficiaries' knowledge will result in effective use of resources provided under the resettlement plan and livelihood activities. Separate training will be provided for men and women, and the participation of the poorest households will be ensured. The resettlement management and implementation unit (RMIU) and other organizations involved in the resettlement implementation and management will need training in order to implement resettlement activities effectively. The training will help them to manage their tasks in a participatory and sustainable manner. Understanding participatory approach and consultative methods and skills to plan and implement accordingly the Project activities in the villages is a central target of RMIU capacity building. The RMIU will include female staff for various sub-units. The various target groups for capacity building will be: Song Bung 4 Hydropower Project Management Unit (SB4HPPMU) staff, provincial people's committee (PPC), Nam Giang and Dai Loc district people's committees (DPCs) and district resettlement committees (DRCs); district grievance committees; RMIU staff; village resettlement and development groups (VRDGs); women s union; and all beneficiaries (male and female adults). Capacity building for the province and district staff involved in the project implementation and management will focus on understanding various concerns related to relocation, ethnic minority, social, poverty, community, and gender issues. Capacity building of the VRDGs will focus on relocation and compensation issues (such as the mechanism and institution involved in resettlement planning and implementation, selection of appropriate resettlement sites, appropriate village lay outs and housing patterns, relocation logistics, entitlements, and compensation amount and process), conflict avoidance and management, leadership training and negotiation skills, and grievance procedures, which will ensure the capacity of the members of this group to act as a lead group in the villages to be relocated. The training to be provided to villages will include relocation logistics, details about compensation processes, grievance procedures, management of compensation money, entitlements, land ownership and rights, coping mechanisms in resettlement sites, leadership skills, water and sanitation, and irrigation systems management. The community awareness program will include awareness on health and sanitation, trafficking, and sexual exploitation risks. 7 Monitorable Deliverables/Outputs Activities: (i) (i) training of the province, district, and commune-level bodies on managing relocation, ethnic minority, social, poverty, community development, and gender issues; (ii) training of VRDGs to undertake a lead and representative role in the beneficiary villages; (iii) training of beneficiaries in social and legal issues related to resettlement and compensation; (iv) support to beneficiaries though training in community social stability; (v) ensure 80% of the beneficiaries use compensation money for productive use; and (vi) running of information campaigns in health as well as in health-related and social risks following project implementation. 90% of the members (including women members) of the district and village resettlement committee received capacity-building training.

12 8 Implementation of Major Activities: Number of months for grant activities (ii) 80% of the beneficiary trainees including women received capacity-building training (resettlement logistics, compensation money, leadership training). (iii) Detailed schedules and budget plans for training workshops. (iv) Reports from training workshops. (v) Monthly reports on beneficiaries capacity-building activities. (vi) Annual reports on activities and use of funds provided to the RMIU and ADB. 48 months Component C Component Name Livelihoods Restoration and Development Program for People Whose Livelihoods will be Affected Downstream of the Dam Cost ($) $286,455 Component Description The objective of the component is to restore and improve the livelihoods of the people living in villages in the vicinity of Song Bung River downstream of the dam, where fishing will be seriously affected due to the reduction in fish resources. River fish are an important nutritional source for most households and an income source for some villagers. The aim of the program is to ensure that the nutritional status and livelihoods of the beneficiaries does not deteriorate. Livelihood compensation and development will be divided into three downstream zones which are affected in different ways and where different livelihood activities will be implemented. In zone 1, which is the downstream section of the Bung River closest to the dam, the livelihood development program will comprise support to 39 households in Pa Dau 2 ethnic minority village and consist of improvement of irrigation and wet paddy cultivation as well as upland crop improvement, fishponds development, and livestock breeding development, all with the aim of compensating for the lost fish resource and contributing to poverty reduction. Zone 2, which is the next section of the Bung River, encompasses the eight villages in Dai Son commune inhabited by Kinh (mainstream) people; here the program will consist of access road improvement, enhancement of loong boong fruit tree cultivation, a fishpond raising program, a livestock raising program, and training to support alternative income generation. In zone 3, which is along the Vu Gia River further downstream in Dai Loc district, the livelihoods development program will consist of training to improve livestock breeding in order to compensate for the lost food and income from fishing. Monitorable Deliverables/Outputs Subprogram activities: (i) improvement of wet rice cultivation and irrigation (zone 1), (ii) upland crop improvement (zone 1), (iii) fishpond and fish raising development program (zones 1 and 2), (iv) livestock raising improvement and support program (zones 1 and 2), (v) fruit tree cultivation improvement support (zone 2), and (vi) alternative income-generation support through training (zone 3). (i) 2 hectares (ha) of wet rice fields taken into cultivation with functioning irrigation in zone 1. (ii) All households in zone 1 have improved production and stocking of beans and other upland crops. (iii) 50% of households in zone 1 and 50% of the fishing households in zone 2 own or share a fishpond and have received training in managing fishponds. (iv) All households in zone 1 and all the commercial fishing households in zone

13 9 Implementation of Major Activities: Number of months for grant activities 2 have increased livestock numbers and production and have received training in livestock breeding. (v) 200 ha of improved loong boong fruit tree cultivation. (vi) At least 20% of fishing households in zone 3 have received guidance on alternative income-generating opportunities. 48 months Component D Component Name Project Technical and Implementation Support Cost ($) $806,202 Component Description The RMIU will need technical support to manage the implementation of the various activities related to resettlement and livelihoods development. Assistance to the RMIU will be provided by an NGO or a national consulting firm with responsibility for the detailed design and implementation of the livelihoods development program, community mobilization, and capacitybuilding activities. The main tasks of the NGO or national consulting firm will be (i) supporting the RMIU in the day-to-day implementation of the resettlement and compensation activities; (ii) supporting the RMIU in village consultations and grievances and facilitating the communication between beneficiaries and the RMIUs; (iii) ensuring involvement of the beneficiaries in all resettlement, compensation, and livelihoods consultation; (iv) planning and developing livelihood activities; (v) planning and implementing community mobilization; (vi) village-level capacity-building training on livelihoods; (vii) monitoring the implementation of the livelihoods development plan; and (viii) poverty assessment. The RMIU consists of district staff as well as commune and village representatives who plan, manage, and implement the resettlement, compensation, and livelihoods development programs. District staff will be involved in the daily activities during the entire 4-year project period. Special staff with technical competence in different aspects are needed to manage the resettlement process including undertaking community mobilization, capacity training, and extension during project implementation. The RMIU will consist of six units consisting of (i) a coordination unit; (ii) an administration and finance unit; (iii) a land-use planning and cash compensation unit; (iv) a community infrastructure unit; (v) a relocation, community mobilization, capacity training, and consultation management unit; and (vi) a livelihoods development unit. EVN will finance some of the operational expenses of the RMIU, such as staff salaries and vehicles, and the proposed JFPR grant will finance only the incremental operational expenses required to implement the JFPR-financed activities. The NGO or national consulting firm will be retained under JFPR financing to plan and implement various capacity-building activities for the different target groups involved in the project at province, commune, and village levels. They will also be responsible for community mobilization activities in the resettlement sites. All planning and implementation will be done in a participatory manner, in consultation with the beneficiaries. The NGO or national consulting firm will provide staff to work in cooperation with the RMIU staff. The core staff to be provided by the NGO or national consulting firm will consist of a resettlement expert/coordinator, a community and ethnic minority development specialist, a gender specialist, a crop/agriculture expert, a fisheries expert, a livestock expert, a forestry expert, and village-level community development workers. These three core persons

14 10 and community development workers will have a cross-cutting role with responsibility for planning, coordinating, harmonizing, and implementing the various project activities in the different project areas. Their responsibilities will also include organizing all of the various capacity-building components, and ensuring that the opinions, requirements, and wishes of the beneficiaries are fully respected and brought into the project formulation. These staff will also be responsible for regular monitoring of the progress of the various project components. Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities During the preparation of the Song Bung 4 Hydropower Project, detailed poverty and social baseline data was collected. The JFPR project, through its monitoring component, will use this data as a baseline against which to assess the contribution to poverty reduction in the region. For monitoring the progress and development effectiveness of the grant-funded activities, it is proposed that a separate Japanese NGO (i.e., the Foundation of International Development and Relief [FIDR]) will be selected using single source selection based on the ongoing work they are doing in the project area. An external auditor will be retained to verify the use of funds and the operation of the imprest account. (i) Quarterly reports from the RMIU on staff activities and the use of allocated funds trough the imprest account. (ii) Semiannual progress reports on activities from the monitoring NGO. (iii) Annual external audit report of the RMIU activities and the imprest account to ADB, SB4HPPMU, and PPC. 48 months 2. Financing Plan for Proposed Grant to be Supported by JFPR Funding Source Amount ($) JFPR $2,000,000 Total $2,000, The financing provided by EVN for the main resettlement activities is separately summarized in the table below and is not included in the detailed cost estimates in Appendix 1. Item Amount ($) Preparation of resettlement sites 406,987 Compensation for lost assets due to resettlement 207,887 Land clearance for explosives 260,177 Cost of house construction in new sites 1,108,158 Access roads to new resettlement sites 13,209,911 Internal roads in the new resettlement sites 443,038 Schools 177,196 Health care facilities 57,418 Commune administration buildings 26,706 Irrigation and water supply 330,000 Electricity supply 707,595 Transitional cash allowances 711,614 Implementation cost 360,000 Total 18,006,687

15 11 3. Background 2. ADB is preparing the Song Bung 4 Hydropower Project that will be presented to the ADB Board of Directors together with this proposed JFPR grant. The Song Bung 4 Hydropower Project is located in the Nam Giang district of Quang Nam province in central Viet Nam, which has a poverty level of over 50%. The Zuoih commune, which would be relocated as a result of the project, has a poverty rate of over 70% based on the national poverty line. There is also a high degree of poverty (over 50%) in the downstream areas. 3. As the project developer of the Song Bung 4 Hydropower Project, EVN is committed to compensate for the quantifiable losses and restore lost livelihoods. The total financing allocated by EVN for this is about $18 million (see table above) and includes: (i) development of new resettlement sites with associated facilities such as access roads, houses, schools, health centers, and community buildings; (ii) land allocation, irrigation, domestic water supply, and land preparation; (iii) cash compensation for lost assets (mainly trees and fish ponds) using the rates stipulated by the province; and (iv) transitional cash and food allowances for livelihood support at the rates stipulated by the province (this will be provided for 6 12 months). 4. Most of the people in this area belong to the Ca Tu ethnic minority group and have livelihoods based mainly on forest products and swidden agriculture. They need additional assistance that goes beyond the standard government practice in order to reestablish their livelihoods in the new resettlement sites. The JFPR grant will complement the financing provided by EVN in providing this additional support. The JFPR grant will be financing distinct activities focusing on: (i) sustained and enhanced livelihood support for people relocated in the reservoir area, (ii) capacity building for resettled communities for reestablishing their livelihoods in the new location, (iii) capacity building and implementation support to provincial and district staff responsible for implementing the resettlement program in a participatory manner, and (iv) livelihood restoration for downstream communities who would be affected due to changes in the flow regime of the river. 5. The JFPR grant financing will contribute to ensuring that the beneficiaries are capable of benefiting from the resettlement support provided by EVN and are able to rebuild their lives in the resettlement sites in a sustainable manner. The grant activities are focused on supporting livelihoods restoration and developing economically and socioculturally sustainable resource use and production with the aim of sustained poverty reduction among the beneficiaries. 6. This is also the first time ADB is financing a hydropower project in Viet Nam. Resettlement where whole villages of poor and vulnerable people in remote areas have to be moved is unique to the hydropower sector. This is considered as a development opportunity for demonstrating how to improve in a sustainable manner the lives of very poor and marginalized people who are affected by large infrastructure projects. This is especially important in the context of hydropower as Viet Nam is embarking on a large hydropower development program which is likely to result in resettlement of over 150,000 people over the next 15 years in the remote mountainous areas inhabited by ethnic minorities. The lessons learnt from the JFPR project will be used in preparing guidelines on sustainable livelihood restoration. There will be disseminated to the developers of other hydropower projects as a best-practice example.

16 12 4. Innovation and Knowledge Sharing 7. The livelihoods development program to be implemented under the proposed JFPR grant goes beyond the standard practice in Viet Nam for compensation and relocation of project-affected people which is typically limited to cash compensation for lost assets and provision of physical facilities such as housing and access roads. A programmatic approach is taken where the beneficiaries are supported over a longer period of time with focus on community mobilization, capacity building, and empowerment. Community mobilization with a participatory approach, consultations, and the involvement of the beneficiaries in both planning and implementation of the various activities contributing to sustainable local development are innovative features in the context of Viet Nam. 8. The capacity-building component of the proposed grant, which will (i) increase knowledge and awareness on resettlement issues and entitlements of affected people and (ii) ensure affected peole are provided with improved skills and coping mechanisms in the new locations, is also not standard practice in Viet Nam particularly for downstream.. The downstream livelihoods restoration and development program will not only ensure that households nutritional or economic status will not deteriorate due to the Song Bung 4 Hydropower Project, but will also prepare opportunities for improved livelihoods of the affected people in the downstream area. 9. Capacity building of the various bodies involved in project implementation will contribute to a participatory approach and increase the competence of the involved organizations in planning and implementing the Song Bung 4 Hydropower Project as well as other future hydropower projects. 5. Sustainability 10. The key objective of the livelihoods restoration and development program for people affected by the Song Bung 4 Hydropower Project is to ensure sustainable socioeconomic, cultural, and environmental development in the affected villages. Planning and implementation of all the activities will be done in full consultation with, and with the participation of, the beneficiaries. Their capacity to manage the new situations and improve their livelihoods will be increased through capacity building and technical training. This participatory approach will ensure that the beneficiaries will be able to sustain their lives themselves after the completion of the resettlement activities, and that the achievements will be sustainable in the long term. Increasing the skills of women in livelihood activities will improve the household subsistence base, and the health and living standards of the women's families. Land-use planning and land allocation, together with the capacity building of the beneficiaries in various types of land and forest management, will contribute to environmental sustainability. 6. Participatory Approach 11. The livelihoods restoration and development plan is based on intensive village and household-level consultations with the beneficiaries undertaken during the preparation of the Song Bung 4 Hydropower Project. The affected people were consulted on, and have consented to, the proposed resettlement sites and livelihood options. The different components needed for developing the livelihoods of the beneficiaries in a socioeconomically, culturally, and environmentally sustainable way are based on a social, poverty, and gender analysis undertaken in the affected villages. The participatory approach will continue into the detailed planning and implementation of the various livelihoods activities that will be carried out in a flexible manner with the full involvement and mobilization of the beneficiaries.

17 12. The capacity building for various livelihoods activities development will be based on a learning by doing approach, where villagers will be trained on the job by the NGO or consultants funded under the proposed grant and by resettlement and management implementation unit (RMIU) staff. In this way the proposed grant is designed to involve a significant number of district staff and enhance the participation and sense of ownership of the district authorities. The capacity building of the members in the various province, district, and local bodies involved in the implementation will improve their understanding and increase their involvement. This competence will also benefit planning and implementation of other planned hydropower projects in the river basin. 13 Primary Beneficiaries and Other Affected Groups and Relevant Description 4 relocated high-poverty ethnic minority villages in Zuoih commune 1 high-poverty ethnic minority host village in Zuoih commune 2 high-poverty ethnic minority villages in Ta Binh commune losing upland cultivation land and resource forests in the reservoir 1 high-poverty ethnic minority village in Thanh My town commune in the downstream area dependent on river fishery 8 downstream poor villages in Dai Son commune dependent on river fishery Commercial fishery households in villages in 10 downstream communes in Dai Loc district Other Key Stakeholders and Brief Description RMIU staff that will benefit from capacity building District level organizations; DPCs, DRCs, that will benefit from capacity building Province level organizations; PPC and PRSC that will benefit from capacity building SB4HPPMU staff that will benefit from capacity building National and/or international NGO supporting the RMIU in detailed design and implementation of the livelihoods development program and capacity-building activities Japanese NGO (FIDR), based in Da Nang or Quang Nam to do semiannual monitoring of the grant-financed activity 7. Coordination 13. The major international financiers to Viet Nam s power sector (ADB, the Japan Bank for International Cooperation [JBIC], and the World Bank) maintain close coordination. The World Bank financing is mainly focused on improving the rural power distribution systems while JBIC financing in recent times has focused on thermal power generation projects. As Viet Nam is building more power plants, JBIC is also considering financing several power plants using commercial financing. 14. During the preparation of the Song Bung 4 Hydropower Project, ADB has maintained close coordination with JBIC and shared the resettlement and ethnic minority development plan, and environmental impact assessment of the project. JBIC is also considering financing the equipment for the A Vuong hydropower project in the same river system. 15. The possibility of having a direct contract for monitoring the development effectiveness of the JFPR-financed activities were discussed with FIDR, a Japanese NGO working in the project area. 16. The Embassy of Japan in Hanoi was briefed about the project on 6 October 2006 and was provided with a copy of the draft Memorandum of Understanding to be signed with the Government.

18 14 8. Detailed Cost Table 17. Appendix 2 has detailed cost estimates and Appendix 3 has the fund flow arrangement. C. Link to ADB Strategy and ADB-Financed Operations Document 1. Link to ADB Strategy Country Strategy and Program (CSP) Document Number Date of Last Discussion September 2006 Objectives The key development objectives of the CSP approved in September 2006 are (i) business-led pro-poor economic growth, (ii) social equity and balanced development, and (iii) environmental sustainability. The proposed grant fits with the CSP objectives as it is aimed at mitigating the adverse impacts of economic growth-oriented infrastructure projects on poor and vulnerable people. The poverty reduction among ethnic minorities in the central highlands is also a key objective of the CSP and the grant beneficiaries belong to this category. Socioeconomic Development Plan (SEDP) of Viet Nam June 2006 The SEDP has been accepted as the poverty reduction strategy by the World Bank, ADB, and the International Monetary Fund. The ADB CSP is based on the SEDP. The key objectives of the SEDP are to (i) accelerate economic growth for sustained development; (ii) create foundations for industrialization and modernization; and (iii) improve the material, cultural, and spiritual life of the people. 2. Link to Specific ADB-Financed Operation Project Name Proposed Song Bung 4 Hydropower Project Project Number Date of Board Approval Expected to be June 2008 Loan Amount ($ million) $196 million 3. Development Objective of the Associated ADB-Financed Operation 18. The objective is supporting economic development of Viet Nam by increasing the power generation capacity using domestic resources (i.e., hydropower) in an environmentally sustainable and socially inclusive manner. The ADB-financed Song Bung 4 Hydropower Project is included in the least-cost generation expansion plan for meeting Viet Nam s fast-growing demand for electricity. 19. The resettlement and livelihood restoration for people affected by the Song Bung 4 Hydropower Project will be financed by EVN to comply with the prevailing government regulations. This includes the preparation of resettlement sites, housing and commune buildings, cash compensation for lost assets, and transitional cash and food allowances. The proposed JFPR grant will support enhanced livelihood activities for the people adversely affected by the Song Bung 4 Hydropower Project to improve their capacity to develop sustained livelihoods in the new environment.

19 4. Main Components of the Associated ADB-Financed Operation No. Component Name Brief Description 1. Construction of Song Bung 4 Hydropower Project 15 The project includes the construction of a 156 megawatt hydropower plant on the Bung River, a tributary of the Vu Gia River. A 110 meter (m) high roller compacted concrete dam will capture the flow of water from the watershed of the Bung River, creating a reservoir of 15.8 square kilometers surface area in Zuoih and Ta Binh communes of Nam Giang district. The water discharged from the powerhouse about 5 km downstream of the dam will be returned through a short tailrace canal to the Song Bung River. The Project will also include a double-circuit 220-kilovolt transmission line about 35 km long to Thanh My in Nam Giang district. 2. Resettlement of Affected People The reservoir will result in the inundation of four villages requiring the relocation of all 209 households and the commune center of the Zuoih commune of Nam Giang district, which is one of the most remote and mountainous communes in Quang Nam province. The reservoir will also flood some agricultural land of 52 households in one other village in Ta Binh commune. The affected people belong to the Ca Tu ethnic minority and over 70% of them are below the national poverty line. Relocated villages will be provided with new resettlement sites (including associated infrastructure such as access roads), improved common facilities (such as schools and health facilities), cash compensation for lost assets, and transitional food and cash allowances. 5. Rationale for Grant Funding versus ADB Lending 20. The ADB loan is provided at commercial (i.e., London interbank offered rate-based) interest rates to EVN for financing the Song Bung 4 Hydropower Project. EVN is committed to financing the resettlement activities in accordance with the relevant government regulations that include the preparation of resettlement sites, housing and other commune infrastructure and buildings such as schools, the preparation of land for agriculture, cash compensation for lost assets, and transitional cash and food allowances. 21. The grant-financed activities go beyond the prevailing government requirement for compensation and replacement. As the affected people belong to poor and vulnerable ethnic minorities, a participatory developmental approach is taken under the proposed grant-financed activities to lift the project-affected people out of poverty in a sustained manner. EVN (the borrower of the ADB loan) is a commercial entity and is not in a position to finance such a developmental program as it goes beyond its mandate. D. Implementation of the Proposed Grant 1 1. Provide the Name of the Implementing Agency Nam Giang District People's Committee and Dai Loc District People's Committee 1 The detailed implementation, procurement, and disbursement arrangements are provided in Appendix 3.

20 16 2. Risks Affecting Grant Implementation Type of Risk Brief Description Measure to Mitigate the Risk Insufficient capacity The staff provided by the RMIU lack The consultants and/or NGO to be of the RMIU sufficient capacity and competence for financed through the proposed JFPR implementation of the planned activities. grant will complement and support district staff and provide capacity building and technical assistance to ensure the participatory involvement of the beneficiaries and adoption of new approaches and technologies. Implementability The absorptive capacity of the beneficiaries is low and available resources are scarce; therefore, the feasibility of each type of activity needs to be planned in detail prior to implementation. Governance SB4HPPMU, provincial and district authorities, and the RMIU may not actively support the participatory approach of involving the beneficiaries in all project planning and implementation activities. Implementation delays and insufficiency Problems in administrating the allocated funds in a timely and efficient manner. 3. Incremental ADB Costs The JFPR project applies a participatory approach, whereby the consultants and/or NGO financed by the proposed JFPR grant will start by establishing consultative platforms for designing detailed activities together with the beneficiaries, based on their absorptive capacity. Full involvement of the beneficiaries and village and commune-level organizations are ensured through the coordinating role of JFPR grantfinanced consultants and/or NGO and capacity building of the RMIU and other involved organizations. Regular reporting and auditing requirements on the implementation agency. External auditors will do regular auditing. Component Amount requested Justification Type of work to be rendered by ADB Incremental Bank Cost Not Applicable Not Applicable Not Applicable 4. Monitoring and Evaluation (M&E) Key Performance Indicator Resettlement sites appropriate for adequate agriculture development and providing NTFP resources are selected. Land-use planning for formalization of user rights in agriculture and forest resources and zoning for village layout is done during the first year. Effective participatory process is established to involve beneficiaries in planning of resettlement and livelihood activities. Reporting Mechanism (i) Quarterly progress reports on the activities by NGO and/or consultants and the RMIU (ii) Annual activity reports by NGO and/or consultants and the RMIU (iii) Monitoring of the Plan and Timetable for M&E (i) Quarterly (ii) Annually (iii) Semiannually