Song Bung 4 Hydropower Project - Bank Information Center

BIC is no longer actively monitoring this project.

ADB finances a 156 Hydropower project in Vietnam

Location: Quang Nam Province, Vietnam

Total Cost: US$200 million

Funding: Asian Development Bank financing $199.7 million

ADB’s US$196 million investment is the Bank’s first public loan for a 156 megawatt hydropower project in the country. Triggering all Category A impacts under its Involuntary Resettlement, Environment and Indigenous Peoples’ Policies, this dam will flood at least 143 hectares of farm, forest and residential lands and is expected to uproot over 200 families, belonging mostly to Ka Tu ethnic minority group from four (4) villages.

A fact-finding mission undertaken by BIC and Rural Development Services Centre (RDSC – a Vietnamese NGO), which sought to obtain on-the-ground information on: a) the extent of compliance with some aspects of ADB’s Safeguard and Public Communication Policies and public consultation procedures during the project preparation stage, based on first hand accounts of affected households, officials from the Nam Giang District Peoples’ Committee (NDPPC), and commune leaders, showed that:

The ADB failed to ensure that the draft REMDP (Resettlement and Ethnic Minority Development Plan) was disseminated timely to stakeholders, deliberated and subjected to multi-stakeholder verification, comments and recommendations.

The draft REMDP also did not satisfactorily address outstanding concerns with the

1) housing design;
2) livelihood restoration;
3) compensation for damaged and lost assets (including houses, land, and other properties) of families to be relocated and of the host villagers;
4) land title/land access;
5) representation issues at the grievance and resettlement committee.

There was also a general lack of knowledge on the scope and process of compensation while the district and commune grievance committees and the resettlement committees at the national, provincial and district levels were found to have unclear coordination mechanisms and reporting lines and have unclear benchmarks of peoples’ participation in the design, monitoring and evaluation of the REMDP.

Given the clear concerns associated with policy non-compliance in the project, RDSC and BIC decided to bring these findings and recommendations to the ADB Board and Management. RDSC and BIC specifically asked the ADB Board to ensure a significantly improved Resettlement and Ethnic Minority Development Plan (REMDP) was prepared, one which would contain substantial improvements in critical components, before the project was to be approved.

After five postponements of Board dates due in part to concerns raised by BIC and RDSC, and despite BIC’s intercessions to the ADB project management team to initiate further consultation with the affected district and village communities before approval, the ADB Board gave its green light to the project in June 2006. The US Executive Director abstained from voting on the project loan – the reasons incorporated the findings in the Report prepared by RDSC and BIC. All the other chairs supported the project.

Project Loan: APPROVED
Ordinary Capital Resources: $196 million

Technical Assistance: (Phase I of the PPPTA) CLOSED
Technical Assistance Special Fund: $150,000

Technical Assistance (Phase II of the PPPTA) APPROVED
Japan Special Fund: $975,000
A.T.F. – French T.A. Grant: $600,000

Grant: Livelihood Improvement of Vulnerable Ethnic Minority Communities Affected by the Song Bung 4 Hydropower Project in Quang Nam Province: APPROVED
Japan Fund for Poverty Reduction: $2 million

Total: US$199.7 million

ADB- Arjun Thapan, Director General of Southeast Asia Department
6 ADB Avenue,
0401 Mandaluyong City, Philippines
Tel: 632-632-6201 athapan@adb.org
ADB- John Cooney, Director, Infrastructure Division
Tel: +632 632 6433 jcooney@adb.org
ADB- Anthony Jude, Director, Energy and Water Division
Tel: +632 632 6198 ajude@adb.org