NO.286JANUARYADB BRIEFS2024KEY POINTSMeasuring the Economic ImpactsThe findings of this studyunderscore the economicof a Wind Power Project in Viet Namvalue addition of theLotus Wind Power Projectin Viet Nam.Duringits construction phase,Nguyen Anh TuanChristian Abeledathe project created a totalIndependent Economic ConsultantAssociate Economics Officerof1,574 employmentsViet NamPrivate Sector Transaction(measured as full-timeequivalents or FTEs)andSupport Divisioninfused local economies withManfred KieferPrivate Sector Operations Departmentjob earnings amounting toPrincipal EconomistAsian Development Bank$29.13 million.Moreover,Private Sector Transactionit contributed $89.6 millionSupport Divisionto the country's grossPrivate Sector Operations Departmentdomestic product.Asian Development BankIn its operational andmaintenance phase,thepositive economic impactsof the project are estimatedINTRODUCTIONas 227 FTE permanent jobs,$4.4 million in earningsThe Lotus Wind Power Project is the first financing of the Asian Development Bankper year,and $9.5 million(ADB)for a wind power initiative in Viet Nam.In 2021,ADB arranged and syndicatedof annual economic valuea $173 million financing package for the project,which has a total capacity ofaddition over the next144 megawatts (MW).The project includes three wind power farm projects-Lien20 years.More than justLap,Phong Huy,and Phong Nguyen(with 48 MW each)-constructed and operatedstatistical numbers,theseby the PC1Group Joint Stock Company (PCI Group)and RENOVA Global Businessbenefits resonate with theDevelopment Companycommunities affected,offering the promise ofThe Lotus project marks a significant advancement for the quickly developing windenhanced livelihoods andpower industry in Viet Nam and was the first wind power project that not only ADB buteconomic prosperity.all the other participating lenders have financed in the country.The financing is certifiedas a Green Loan by the Climate Bonds Initiative.Construction took 18 months fromSimilar investments in theMay 2019 to October 2021.The wind farms were connected in September 2021 andsector may be consideredstarted operating and delivering power to the national grid in October 2021.in the future.A conduciveinvestment environmentmust be created,andcommunities need to be ableThe authors extend their gratitude to the following offices and individuals for their valuableto benefit from investmentsinputs and unwavering support:ADB Economic Research and Development Impact Department;and have a voice in theShantanu Chakraborty,Maria Patgeuana,and Nguyen Ba Hung of the ADB Viet Nam ResidentMission;Lien Nguyen,Michael Gabish,and Ninh Le Do of the ADB Private Sector Operationsdecision-making process.Department;and the PC1 Group Joint Stock Company.Special thanks are also extended toArvin Yana,communications consultant,for research assistance and coordination of publication,and the ADB Department of Communications and Knowledge and Management for ensuring theoverall quality of this knowledge product.In this publication,$"refers to United States dollars.1SBN978-92-9270-587-9(print)ADB recognizes "Vietnam"as Viet Nam,and "Hanoi"as Ha Noi1sBN978-92-9270-588-6(electronic)ISSN 2071-7202 (print)ISSN 2218-2675 (electronic)Publication Stock No.BRF240005-2DO:http://dx.doi.org/10.22617/BRF240005-2ADBADB BRIEFS NO.286In 2023,after almost 2 years of operation,the Private SectorWind power development has been instrumental in Viet Nam'sOperations Department of ADB implemented an economicefforts to diversify its energy mix,reduce greenhouse gas(GHG)assessment of the direct,indirect,and induced impacts arising fromemissions,and improve energy security.The growth in thethe construction and operation of the project,mainly in terms ofsector is supported by the government's strong support andjob creation and economic value addition,using a tool based on animplementation of generous feed-in-tariff(FIT).The introductioninput-output(1-O)model.Research on socioeconomic impactsof a FIT of $0.085 per kilowatt-hour for onshore wind projectsof renewable energy projects,especially on job creation,remainssparse but is important(COBENEFITS 2019).Assessing theimpacts of renewable energy projects has gained momentum,giventhe increasing role renewable energy has to play in the transitionFigure 1:Viet Nam-Power Generation Structureto zero emission.Sound information on expected outcomes,suchand Growth Rate,2010-2022as employment and income generation at both national and local300,00060levels,is essential for informed policy decisions and planning.250,000The study aimed to measure the impacts of this wind power9200,00040project.This brief summarizes and communicates the study150,00030findings,particularly the benefits of the investment,to policymakers and the wider public.100,00050,0000DEVELOPMENT CONTEXT☐Fossil FuelsRenewable energy development in Viet Nam has gained significant■Renewable Energymomentum in recent years.The country,which was traditionally-Growth Rate -Renewable Energy Sharedependent on fossil fuels to meet energy needs,has been activelyGWh gigawatt-hour.transitioning toward cleaner and more sustainable sourcesSource:Viet Nam Electricity.2022.Annual Report.Hanoiof power.Based on 2022 data (Viet Nam Electricity 2022),renewable sources accounted for 48%of total power generation(130,000 gigawatt-hour [GWh])in Viet Nam,comprising mostlyhydropower plants (35%)while wind,solar,and biomass accountedin 2018 encouraged the development of wind power project infor 13%.the country.'This led to an increase in investments and addedcapacity.However,due to the expiration of the FIT in 2021andViet Nam,particularly the northern region,traditionally boaststhe coronavirus disease (COVID-19)pandemic,installation ofof a geography ideally suited for the development of hydropowernew wind power has slowed down.Currently,the Government ofplants.With its rugged terrain and numerous rivers,the regionViet Nam is considering various alternative support options forholds substantial hydropower potential that has been used fromwind development including auctioning and special arrangementsthe early days of Viet Nam's industrialization.However,as thefor offshore wind,among others.suitable locations for large hydropower projects have all been used,the dynamic growth of hydropower in the north has slowed.In abid to meet the surging demand for electricity,the country initiallyTHE LOTUS WIND POWER PROJECTturned to more accessible and cost-effective sources,including theestablishment of several coal power plants in the northern region,The project is in Huong Hoa District,Quang Tri Province,and combined-cycle gas turbines in the southern region.Viet Nam (see Map).Huong Hoa is a mountainous rural districtin the west of Quang Tri Province with a population of ethnicAs the nation's energy landscape evolves and climate considerationVietnamese as well as Bru people and Ta Oi people.Due to itsgains importance,there is a notable shift toward cleaner and moreelevation;strong wind resources;and its unique geography ofsustainable options,leading to the significant development of solarsteep slopes,sharp crests,and narrow valleys covered by denseand wind energy projects in the center and southern regions.broadleaf evergreen forests,the area is conducive to wind farmsQuang Tri is home to many wind farms in the region,totalingSolar and wind energy have slowly become the driving forces17 as of 2021.Huong Hoa District has potential for agriculturalbehind the further increase of the share of renewable energy.production and tourism as well.During the 2010-2022 period,the share of renewable energyincreased from 27%to 48%(Figure 1).See Decision No.39/2018/QD-TTg,10 September 2018,amending several articles of Decision No.37/2011/QD-TTg of the Prime Minister dated 29 June2011on provision of assistance in development of wind power projects in Viet Namin NHQuang &Associates.2023.Policy Brieffor Preparation ofJust Energy