Annual MFF Progress Report. Revised Closing Date. Facility Summary

Transcription

1 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title Multitranche Financing Facility - Integrated Citarum Water Resources Management Investment Program Project No Country/ Regional Key s MFF Amount Cofinancing Approval Indonesia Department SERD Original 4 Dec Jun Facility Summary Revised Division Source Source IRM COL OCR ADB approved the Multitranche Financing Facility - Integrated Citarum Water Resources Management Investment Program for an aggregate amount not exceeding $ million from ADB s ADF, OCR on 4 December Impact: The expected impact of the Investment Program is reduced poverty and improved health and living standards in the Citarum River basin. Outcome: The expected outcome is improved integrated water resources management in Citarum River Basin. Outputs: The Investment Program outputs are (i) institutions and planning for IWRM; (ii) water resource development and management; (iii) water sharing; (iv) environmental protection; (v) disaster management; (vi) community empowerment; (vii) data, information, and decision support; and (viii) program management. 1. Institutions and Planning for IWRM Good IWRM institutions and effective planning with stakeholder participation 2. Water Resource Development and Management Effective planning, implementation, and operation and maintenance of water resource infrastructure 3. Water Sharing Established and protected water rights and water allocated among competing uses and users, as well as priorities set for water entitlement during times of shortage 4. Environmental Protection Environmental protection and environmental enhancement by a combination of structural and other measures 5. Disaster Management Improved structural and other measures for flood and drought disaster management 6. Community Empowerment Empowered communities and individuals actively participate in water management issues 7. Data and Information Effective data collection and storage and decision-support systems for water resources management 8. Project Management Effective program management with timely monitoring and evaluation Significant Developments of the Facility: There were no significant developments of the facility including major changes to the roadmap, investment program, and policy and legal framework. As mutually agreed 1

2 between the Government of Indonesia and the Asian Development Bank (ADB) during the preparation of the Country Partnership Strategy, the second tranche of the MFF has been cancelled. The works proposed for the second tranche did not justified ADB's investment both technically and financially. Subsequently, the MFF will be closed. Estimated Total No. of Tranches to be Processed Approved Tranches To 1 Approved Tranche Amount to Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report MFF Performance Rating (On Track, Potential Problem, At Risk) On Track 2

3 1 DED = Detailed Engineering Design. 3 Tranche Title TRANCHE 1 UPDATE Integrated Citarum Water Resources Management Investment Program - Project 1 Country/Regional Indonesia Loan/Grant No. Project No , 2500, 2501 Project Officer Lawira, Helena Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 22 Dec Jun May 2016 Division IRM Source COL OCR Source Project Data Sheet

4 1 DED = Detailed Engineering Design. 4 Tranche Summary ADB approved the Integrated Citarum Water Resources Management Investment Program - Project 1, not exceeding the aggregate amount of $53.55 million on 22 December 2008 including TA amounts (if any). Impact: 1.Improved and more integrated water resource management in place, with government and the community working in partnership towards a shared vision (to be fully achieved if all the roadmap interventions are completed successfully)2. The sustainable management of water resources for economic and social development in 6 Cis River Basin Territory Outcome: 1. Improved reliability of water supply to Jakarta and irrigation areas supplied by West Tarum Canal2. Improved water use efficiency and increased yields for rice irrigation in three districts in the Citarum River Basin3. Significant increase in the number of community- and NGO-driven initiatives for improved water and catchment management in the Citarum River Basin4. Improved water quality in the waterways and reservoirs of the Citarum River Basin5. Improved capacity for IWRM in the 6 Cis Basin in accordance with the 2004 Water Law with implementation directed through a common strategic planning framework and associated water resources management plans Outputs: Implementation Arrangements: The Executing Agency is Directorate General of Water Resources (DGWR), Ministry of Public Works. A roadmap coordination management unit (RCMU) has been established by the National Development Planning Agency (BAPPENAS) to ensure the overall planning and financial management in the national and local governments. DGWR established a Project Coordination Management Unit (PCMU) in Citarum River Basin Organisation, Balai Besar Wilayah Sungai Citarum, which is responsible for the project implementation and activities coordination. The RCMU and PCMU will work closely with the National Steering Committee for Water Resources. Project Implementation Units (PIU) were established in each implementing ministries Implementation Status: As of the loan and grant completion date of 31 May 2016, all of the project components have been completed Tranche Change in Scope Category Proposed Change

5 1 DED = Detailed Engineering Design. 5 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 1 (Loan/Grant 2500, 2501) is a loan/grant of USD million from ADF, OCR, which was approved on 22 DECEMBER 2008 and declared effective on 3 June The associated USD3.55 million Global Environmental Facility (GEF) Grant was approved on 4 August 2010 and declared effective on 12 November Tranche 1 is rated as Potential Problem. As of the loan and grant completion date of 31 May 2016, all of the project components have been completed. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 1 have reached $47.27 million (88.6%) and $45.52 million (85.3%), respectively. As of the loan and grant completion date of 31 May 2016, all of the project components have been completed. Scope Change: There were no scope changes for this tranche in Undertaking and Covenants: All undertakings and covenants are being complied with, while the covenant to rehabilitate Bekasi-Cawang Section are still being complied with. As mutually agreed between the Government of Indonesia and the Asian Development Bank (ADB) during the preparation of the Country Partnership Strategy, the second tranche of the MFF has been cancelled. The works proposed for the second tranche did not justify ADB's investment both technically and financially. Subsequently the MFF will be closed.

6 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program Project No Country/ Regional Key s MFF Amount Cofinancing Approval Viet Nam Department SERD Original Revised 14 Dec Jun Jun Facility Summary Division Source Source ADB approved the Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program for an aggregate amount not exceeding $ million from ADB s OCR on 14 December Impact: An integrated, sustainable public transport system in six districts of Ho Chi Minh City Outcome: Competitive MRT services along the project corridor Outputs: Project 1: MRT Line 2 System Development - Initial site works and office facilities at depot Project 1: Implementation support program implemented Project 1: Social development and gender mainstreaming program implemented Project 1: Integrated sustainable urban transport study Project 2: Construction of MRT2 main line and depot Project 2: MRT2 E&M systems and rolling stock installed and operation of metro services Significant Developments of the Facility: Project implementation has been delayed by more than 4 years due to the redesign of fundamental designs of MRT Line 2 system caused by unclear project right-of-way and the Government's independent verification of fundamental designs required by Vietnamese regulation prior to the issuance of bidding documents. Due to design changes and price escalation, the total estimated cost has increased from $1,374 million at feasibility study stage to about $2,322 million, which now requires Government 's approval on the increased investment costs. Final cost will be determined after the Project Adjustment Document (PAD) is approved by HCMC People's Committee. Additional funds will be required from ADB and the cofinanciers. The current (original) MFF availability period ends on 30 June The government has been discussing an extension of the MFF availability period and loan closing date to 13 December 2020, which is the maximum MFF availability period. The additional time is to be able to finance the consulting services and the civil works as much as possible. VRM OCR KfW EIB Estimated Total No. of Tranches to be Processed Approved Tranches To 2 Approved Tranche Amount to

7 Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report MFF Performance Rating (On Track, Potential Problem, At Risk) Potential Problem 7

8 1 DED = Detailed Engineering Design. 8 Tranche Title TRANCHE 1 UPDATE Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program - Tranche 1 Country/Regional Viet Nam Loan/Grant No. Project No Project Officer Mizusawa, Daisuke Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original 22 Dec Jun 2017 Revised Division 2731 VRM Source OCR Source Project Data Sheet

9 1 DED = Detailed Engineering Design. 9 Tranche Summary ADB approved the Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program - Tranche 1, not exceeding the aggregate amount of $40.00 million on 22 December 2010 including TA amounts (if any). Impact: Competitive MRT2 services along the project corridor Outcome: Effective support for implementation of MRT2 infrastructure Outputs: Construction of initial site works and office facilities at depot Provision of implementation support program Social development and gender mainstreaming program implemented Completion of integrated sustainable urban transport study Implementation Arrangements: The Ho Chi Minh City People's Committee (HCMC PC) has established a project steering committee led by the permanent vice chairman, which is supported by the Urban Railway Council. The executing agency is the HCMC PC, and the main implementing agency (IA) is the Management Authority for Urban Railways (MAUR). The Department of Transport (DOT) of HCMC PC is the IA for the integrated sustainable urban transport component. MAUR has established a project management unit (PMU) for MRT Line 2. Implementation Status: With assistance from the project management and implementation support consultant (CS1), MAUR is satisfactorily managing CP1 civil works package (office building and auxiliary buildings at Tham Luong depot) and preparing draft bidding documents for CP2 civil works package (Infrastructure construction of Tham Luong depot). The social development & gender mainstreaming program consulting services contract (CS3) and integrated sustainable urban transport consulting services contract (CS4) started the services with delay. The extension of the loan closing date to 13 December 2020 is required. Tranche Change in Scope Category Proposed Change Overall Rating Financial Safeguards Technical Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem

10 1 DED = Detailed Engineering Design. 10 & (Cumulative) $ million % $ million % Significant Developments During the Year Tranche 1 (Loan 2731) is a loan of USD million from OCR, which was approved on 22 December 2010 and declared effective on 20 December Tranche 1 is rated as Actual Problem. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 1 have reached $17.97 million (99.6%) and $7.32 million (59.5%), respectively. The contract CS1 - consulting services was awarded in September 2012 and will continue until July Unless new CS1 commences its services, MAUR may extend the CS1 contract if CS1 consultant agrees. MAUR has been drafting new CS1 terms of reference. The contract CS3 - consulting services was awarded in September 2015 and will complete on 31 July The development of the social development & gender mainstreaming program under the contract is being delayed. The contract CS4 - consulting services was awarded in August 2015 and will complete on 30 June The target achievement is being delayed. The first workshop was held on 6 September The physical progress of CP1 package is about 64%. MAUR received ADB 's comments on the draft bidding documents for CP2 package in October 2016, and is expected to submit the final draft bidding documents to ADB in March Scope Change: There were no scope changes for this tranche in 2016, but it is expected that MAUR will include CS5 (external financial audit consultant), CS6 (external resettlement monitoring consultant), and CS7 (external environmental monitoring consultant) into the project scope. The RRP provides that the DOT of HCMC PC is the IA for the integrated sustainable urban transport component. However, MAUR has recruited the consultant for this component (CS4), and has been administering the CS4 services. MAUR staff did not know that DOT is the IA. It is considered difficult and inadequate to change the client of the CS4 contract now. The central government should send a request for a change of the IA for the component. Undertaking and Covenants: Covenants are being complied with.

11 1 DED = Detailed Engineering Design. 11 Tranche Title TRANCHE 2 UPDATE Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program - Tranche 2 Country/Regional Viet Nam Loan/Grant No. Project No Project Officer Mizusawa, Daisuke Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original 27 Nov Jun 2018 Revised Division 2956 VRM Source OCR Source 0.00 Project Data Sheet

12 1 DED = Detailed Engineering Design. 12 Tranche Summary ADB approved the Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program - Tranche 2, not exceeding the aggregate amount of $ million on 27 November 2012 including TA amounts (if any). Impact: Competitive MRT2 services along the project corridor Outcome: MRT2 operations and maintenance system effectively implemented Outputs: Construction of MRT2 main line and depot Implementation Arrangements: The Ho Chi Minh City People's Committee (HCMC PC) has established a project steering committee led by the permanent vice chairman, which is supported by the Urban Railway Council. The executing agency is the HCMC PC, and the main implementing agency is the Management Authority for Urban Railways (MAUR). The Department of Transport (DOT) of HCMC PC is the implementing agency for the integrated sustainable urban transport component. MAUR has established a project management unit (PMU) for MRT Line 2. Implementation Status: Due to design changes from basic design to fundamental design and price escalations since 2010 when a feasibility study was conducted, the total estimated project cost has increased from $1,374 million at the feasibility study stage to about $2, million, which now requires the Government 's approval of the project adjustment. The final cost will be determined after the Project Adjustment Document is approved by HCMC PC. MAUR has requested ADB and cofinanciers to provide additional loans. ADB is requested to provide additional financing of $500 million, and this is programmed in 2018 in COBP. Despite the project implementation delays, the Project is now making tangible progress, such as finalization of fundamental design of the MRT system, and submission of updated resettlement plan, draft bidding documents and updated procurement plans. In August 2016, MAUR and ADB agreed specific milestones to speed up the progress and consider an extension of the MFF availability period and the loan closing date, subject to the following: (i) the updated resettlement plan to be submitted to ADB by 15 October 2016, (ii) the final draft bidding documents for CP3a to be submitted to ADB by 31 October 2016, and (iii) the Government to request ADB to disburse ADB loan proceeds for land acquisition and resettlement from Tranche 2 to MAUR s imprest account by 31 December Although some progress is being made, the milestones still remain to be fully achieved. Tranche Change in Scope Category Proposed Change

13 1 DED = Detailed Engineering Design. 13 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 2 (Loan 2956) is a loan of USD million from OCR, which was approved on 27 November 2012 and declared effective on 02 January Tranche 2 is rated as Actual Problem. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 2 have reached $.00 million (.0%) and $2.37 million (100.0%), respectively. MAUR has approved fundamental designs for all civil works and equipment packages, except for ADB-financed packages CP3a and CP3b, which are expected in January 2017; submitted updated resettlement plans for 5 out of 6 districts; and scheduled to start land acquisition and resettlement in February For packages to be financed by ADB under Tranche 2, i.e. CP3a and CP3b (Tunnels and Underground Stations) and CP4 (Transition, Elevated Station, Viaduct and Spur Line), draft bidding documents were submitted and currently being finalized. Final drafts will be submitted to ADB during the period of January - April During the joint review mission in December 2016, it had been agreed that CP6 (Track work and Third Rail) contract package, which was previously considered as an ADB-financed package, would be transferred to KfW. This is because of the restructuring of the financing plan caused by the increase of the total estimated project cost from $1,374 million at the feasibility study stage to about $2, million. The main civil works contract packages (CP3a, CP3b, CP4) are expected to start in late The actual loan disbursement period is only 2 years, even assuming that the loan closing date will be extended to 13 December It is estimated that at most $220 million from Tranche 2 could be disbursed for the main civil works by the loan closing date. Therefore, to maximize disbursement under the loan, it is expected that the Government would request ADB to: (i) extend the MFF availability period and the loan closing date up to 13 December 2020, and (ii) finance land acquisition from Tranche 2. However, ADB did not receive a request in If Tranche 2 is not used for land acquisition and resettlement, its proceeds cannot be fully utilized within the remaining MFF availability period. Even if extended, the processing of a new loan for the restructured project would be needed. This would seriously affect the implementation of the project. Scope Change: There were no scope changes in this tranche in The transfer of CP6 will be processed after the government s request. Undertaking and Covenants: Covenants are generally being complied with, albeit late in some areas.

14 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title MFF- SOE Reform and Corporate Governance Facilitation Program Project No Country/ Regional Key s MFF Amount Cofinancing Approval Viet Nam Department SERD Original Revised 14 Dec Dec Dec Facility Summary Division Source Source SEPF COL OCR ADB approved the MFF- SOE Reform and Corporate Governance Facilitation Program for an aggregate amount not exceeding $ million from ADB s ADF, OCR on 14 December Impact: Improved profitability and transparency of equitized and restructured SOEs, including large general corporations and their subsidiaries Outcome: Participating general corporations are transformed into focused, efficient businesses with strong balancesheets and improved corporate governance. Outputs: Debt restructuring implemented, combining financial and corporate restructuring Increased operational efficiency and improved corporate governance of general corporations and other SOEs Institutions supporting key aspects of SOE reform strengthened and governance improved Significant Developments of the Facility: There were no significant developments of the facility including major changes to the roadmap, investment program and framework. Estimated Total No. of Tranches to be Processed Approved Tranches To 2 Approved Tranche Amount to Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report 14

15 MFF Performance Rating (On Track, Potential Problem, At Risk) On Track 15

16 1 DED = Detailed Engineering Design. 16 Tranche Title TRANCHE 1 UPDATE SOE Reform and Corporate Governance Facilitation Program - Tranche 1 Country/Regional Viet Nam Loan/Grant No. Project No , 2614 Project Officer Dao Viet, Dung Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 14 Jan Jun Dec 2017 Division VRM Source COL OCR Source Project Data Sheet

17 1 DED = Detailed Engineering Design. 17 Tranche Summary ADB approved the SOE Reform and Corporate Governance Facilitation Program - Tranche 1, not exceeding the aggregate amount of $ million on 14 January 2010 including TA amounts (if any). Impact: Improved profitability and transparency of equitized and restructured SOEs, including large general corporations and their subsidiaries Outcome: Participating general corporations are transformed into focused, efficient businesses with strong balancesheets and improved corporate governance. Outputs: 1. Debt restructuring implemented, combining financial and corporate restructuring 2. Increased operational efficiency and improved corporate governance of general corporations and other SOEs 3. Institutions supporting key aspects of SOE reform strengthened and governance improved Implementation Arrangements: MOF is the executing agency, who is responsible for the overall implementation of SRCGFP, including program monitoring and supervision. A PMU is established within MOF for project monitoring including overseeing the day to day implementation of all project components. SDC and Sowatco are the implementing agencies who are responsible for the implementation of its restructuring plan including fulfillment of objectives under the two project outputs. Within each IA is established a project implementation unit which coordinates with PMU on project implementation. Implementation Status: Recruitment of the three (3) consulting firms for SDC has been completed. Services are now on-going for the two consulting firms while one has completed its assignment. The (3) individual consultants have completed their assignments under SDC. SDC is in the process of completing an ICB and NCB package for the IT equipment. The list of IT equipment is being reviewed. The unutilized amount of $2.70 million was reallocated from DATC to SDC for additional technical advisor/consulting services. However, SDC has not commenced the recruitment process. Implementation of the package is on-going. Tranche Change in Scope Category Proposed Change

18 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 1 (Loan/Grant 2613, 2614) is a loan/grant of USD million from OCR, which was approved on 14 JANUARY 2010 and declared effective on 11 JANUARY Tranche 1 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 1 have reached $ million (100.0%) and $ million (100.0%), respectively. There was loan cancellation amounting to $3,555, by SDC. Scope Change: There were no scope changes under this tranche for Undertaking and Covenants: All undertakings and covenants are being complied with. 1 DED = Detailed Engineering Design. 18

19 1 DED = Detailed Engineering Design. 19 Tranche Title TRANCHE 2 UPDATE SOE Reform and Corporate Governance Facilitation Program - Tranche 2 Country/Regional Viet Nam Loan/Grant No. Project No , 3242 Project Officer Dao Viet, Dung Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 16 Dec Dec Dec 2019 Division VRM Source COL OCR Source Project Data Sheet Tranche Summary ADB approved the SOE Reform and Corporate Governance Facilitation Program - Tranche 2, not exceeding the aggregate amount of $ million on 16 December 2014 including TA amounts (if any). Impact: improved profitability and transparency of equitized and restructured SOEs, including large general corporations and their subsidiaries. Outcome: participating general corporations are transformed into focused, efficient businesses with strong balance sheets and improved corporate governance. Outputs: Debt restructuring implemented, combining financial and corporate restructuring increased operational efficiency and improved corporate governance of general corporations and other SOEs. Implementation Arrangements: Ministry of Finance will be executing agency/ies Implementation Status: One consulting firm recruited by VINATEX while the rest of the packages are still work in progress or have not yet started. Implementation of the project has also been delegated to VRM effective 1 November Handover mission was completed in December 2016.

20 1 DED = Detailed Engineering Design. 20 Tranche Change in Scope Category Proposed Change Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 2 (Loan/Grant 3240, 3242) is a loan/grant of USD million from OCR, which was approved on 16 DECEMBER 2014 and declared effective on 09 FEBRUARY Tranche 2 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 2 have reached $ million (.0%) and $ million (.0%), respectively. Under the OCR loan, $57,380, have been disbursed in May 2016 CC1 while in June $61,691, have been disbursed for VINATEX. No disbursements yet under the ADF loan. Scope Change: There were no scope changes this tranche Undertaking and Covenants: All undertakings and covenants are being complied with.

21 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title Multitranche Financing Facility Mong Duong 1Thermal Power Project Project No Country/ Regional Key s MFF Amount Cofinancing Approval Viet Nam Department SERD Original Revised 21 Sep Jun Dec Facility Summary Division Source Source SEEN ADB approved the Multitranche Financing Facility Mong Duong 1Thermal Power Project for an aggregate amount not exceeding $ million from ADB s OCR on 21 September Impact: Adequate and reliable supply of power to meet Viet Nam's electricity demand in an environmentally sustainable manner. Outcome: Adequate system generating capacity to meet growing electricity demand in Northern Viet Nam Outputs: Tranche 1: Site for the construction of the MD1 and MD 2 power plants Tranche 2: MD 1 1,000 MW CFB technology coal-fired power plant Common facilities for MD2 Significant Developments of the Facility: There were no significant developments of the facility including major changes to the roadmap, investment program, and policy and legal framework. OCR Estimated Total No. of Tranches to be Processed Approved Tranches To 2 Approved Tranche Amount to Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report 21

22 MFF Performance Rating (On Track, Potential Problem, At Risk) On Track 22

23 TRANCHE 2 UPDATE Tranche Title Mong Duong 1 Thermal Power Project - Tranche 2 Project No Country/Regional Viet Nam Loan/Grant No. Project Officer Wanniachchi Kankanamalage, Aruna K. Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 21 Dec Dec Dec 2016 Division 2610 SEEN Source OCR Source 0.00 Project Data Sheet Tranche Summary ADB approved the Mong Duong 1 Thermal Power Project - Tranche 2, not exceeding the aggregate amount of $ million on 21 December 2009 including TA amounts (if any). Impact: Adequate and reliable supply of power to meet Vietnam's electricity demand in an environmentally sustainable manner. Outcome: Adequate system generating capacity to meet growing electricity demand in northern Viet Nam Outputs: A 1,000 MW CFB technology coal-fired power plant. Common Facilities for MD2. Implementation Arrangements: The executing agency is Viet Nam Electricity (EVN). The Thermal Power Management Board No. 1 (TPMB1), formerly the Thermal Power Projects Management Unit 1 (TPPMB1), is the implementing agency of the Project. Implementation Status: Tranche 2 components are now completed. Unit No. 1 was commissioned and put into commercial operation on 6 November 2015 while Unit No. 2 was commissioned and put into commercial operation on 3 December The loan closed on 31 December Final payments for completed works and services are being processed. Financial closing of the loan account is expected within the 2nd quarter of DED = Detailed Engineering Design. 23

24 Tranche Change in Scope Category Proposed Change Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 2 (Loan 2610) is a loan of USD million from Ordinary Capital Resources (OCR), which was approved on 21 December 2009 and declared effective on 12 May Tranche 2 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 2 have reached $ million (100.0%) and $ million (99.2%), respectively. All components under Tranche 2 are completed. Rectification works for defects identified during the reliability runs and performance tests are substantially completed. Both Unit No. 1 and Unit No. 2 are under commercial operation, with warranty period until 6 November 2017 for Unit No. 1 and 3 December 2017 for Unit No. 2 Scope Change: There were no scope changes for this tranche in Undertaking and Covenants: All covenants were either satisfactorily complied with, being complied with or not yet due, except for EVN's financial covenants. Based on EVN's 2015 Audited Financial Statements, debt service coverage ratio (>= 1.5) of 1.03 and self-financing ratio (>=25%) of 24.15% were not complied with. Auditor did not indicate whether EVN was in compliance with debt to equity ratio. EVN also failed to maintain its internal audit functions as required under the loan agreement. Safeguards implementation monitoring is continuously being undertaken and followed-up. 1 DED = Detailed Engineering Design. 24

25 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title Greater Mekong Subregion Ben Luc-Long Thanh Expressway Project Project No Country/ Regional Key s MFF Amount Cofinancing Approval Viet Nam Department SERD Original Revised 14 Dec Dec Dec Facility Summary Division Source Source SETC ADB approved the Greater Mekong Subregion Ben Luc-Long Thanh Expressway Project for an aggregate amount not exceeding $ million from ADB s OCR on 14 December Impact: Increased competitiveness of the regional economy along the SEC in southern Viet Nam and the GMS countries Outcome: A more efficient and safer movement of goods and people in the greater HCMC area Outputs: 1. Road density of HCMC increased 2. Connection between east and west regions of HCMC enhanced 3. Project management capacity of VEC improved 4. Financing management capacity of VEC improve Significant Developments of the Facility: There were no significant developments of the facility including major changes to the roadmap, investment program, and policy and legal framework. OCR Estimated Total No. of Tranches to be Processed Approved Tranches To 2 Approved Tranche Amount to Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report MFF Performance Rating (On Track, Potential Problem, At Risk) On Track 25

26 1 DED = Detailed Engineering Design. 26 Tranche Title TRANCHE 1 UPDATE Greater Mekong Subregion Ben Luc-Long Thanh Expressway Project - Tranche 1 Country/Regional Viet Nam Loan/Grant No. Project No Project Officer Lisack, Valerie Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 22 Dec Dec Jun 2019 Division 2730 SETC Source OCR Source Project Data Sheet Tranche Summary ADB approved the Greater Mekong Subregion Ben Luc-Long Thanh Expressway Project - Tranche 1, not exceeding the aggregate amount of $ million on 22 December 2010 including TA amounts (if any). Impact: Increased competitiveness of the regional economy along the Southern Economic Corridor in southern Viet Nam and the GMS countries. Outcome: A more efficient and safer movement of goods and people in the greater HCMC area Outputs: The western section (19.8 km) of Ben Luc-Long Thanh Expressway is constructed. Implementation Arrangements: Vietnam Expressway Corporation (VEC), as the project executing agency, will implement the project under the oversight of the Ministry of Transport. VEC will establish a Ben Luc-Long Thanh project management unit (BLLT-PMU) that will be the focal point for project coordination and communication with ADB and other relevant agencies of the borrower. Implementation Status: Although project implementation has been delayed by 2 years resulting mainly from delays due to unavailability of counterpart funding in 2015 and most part of 2016, Tranche 1 is generally progressing well. Given the recently approved counterpart funding allocation, Tranche 1 should progress smoothly until completion. Completion of civil works is expected in 2019.

27 Tranche Change in Scope Category Proposed Change Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 1 (Loan 2730) is a loan of $ million from Ordinary Capital Resources (OCR), which was approved on 22 December 2010 and declared effective on 01 December Tranche 1 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 1 have reached $ million (99.4%) and $70.81 million (100.0%), respectively. A Mid-term review mission was carried out in March Land Acquisition and Resettlement activities are under completion. With the exception of one package, civil works are generally progressing in line with construction schedule. Progress of civil works as of December 2016 is approximately 25%. Scope Change: There were no scope changes for this tranche in Undertaking and Covenants: Out of 34 loan covenants, 2 loan covenants are partially complied with. Other loans covenants are complied with or not yet due. 1 DED = Detailed Engineering Design. 27

28 1 DED = Detailed Engineering Design. 28 Tranche Title TRANCHE 2 UPDATE Greater Mekong Subregion Ben Luc Long Thanh Expressway Project Tranche 2 Country/Regional Viet Nam Loan/Grant No. Project No Project Officer Lisack, Valerie Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original 20 May Jun 2020 Revised Division 3391 SETC Source OCR Source Project Data Sheet Tranche Summary ADB approved the Greater Mekong Subregion Ben Luc-Long Thanh Expressway Project - Tranche 2, not exceeding the aggregate amount of $ million on 20 May 2016 including TA amounts (if any). Impact: increased competitiveness of regional economy along GMS Southern Economic Corridor in the Southern Viet Nam and the GMS countries. Outcome: a more efficient and safer movement of goods and people in the greater HCMC area. Outputs: The project will increase the density of the HCMC road network, enhance connectivity between the eastern and western regions of HCMC, and improve the project management and financial management capacity of Vietnam Expressway Corporation (VEC). Under Tranche 2, the eastern section of the project expressway will be built. The entire expressway is expected to be completed in the middle of 2019, with operation scheduled for Implementation Arrangements: Not Applicable Implementation Status: Not Yet Effective Tranche Change in Scope Category Proposed Change

29 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year 1 DED = Detailed Engineering Design. 29

30 Annual MFF Progress Report For the meaning of each item, please refer to the MFF Annual Report Definitions Table. FACILITY UPDATE Project Title MFF: Water Sector Investment Program Project No Country/ Regional Key s MFF Amount Cofinancing Approval Viet Nam Department SERD Original Revised 22 Feb Jun Jun , Division Source Source SEUW OCR Facility Summary ADB approved the MFF: Water Sector Investment Program for an aggregate amount not exceeding $1, million from ADB s OCR on 22 February Impact: Sustainable provision of safe water in Viet Nam Outcome: Efficiency of water supply companies improved. Outputs: 1. Increased coverage 2. Improved business planning and asset and financial management 3. Effective NRW reduction Significant Developments of the Facility: There were no significant developments of the facility including major changes to the roadmap, investment program, and policy and legal framework. However, the Government has informed ADB that it no longer requires ADB funding for Tranche 4. Subsequent cancellation of the tranche and funding will be undertaken. Estimated Total No. of Tranches to be Processed Approved Tranches To 4 Approved Tranche Amount to Facility Change in Scope Category Proposed Change Tranche Completion Report Facility Completion Report 30

31 MFF Performance Rating (On Track, Potential Problem, At Risk) On Track 31

32 1 DED = Detailed Engineering Design. 32 Tranche Title TRANCHE 1 UPDATE Loan 2754-Water Sector Investment Program - Tranche 1 Country/Regional Viet Nam Loan/Grant No. Project No Project Officer van Klaveren, Paulus B. Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original Revised 7 Jun Jun Jun 2018 Division 2754 VRM Source OCR Source Project Data Sheet

33 1 DED = Detailed Engineering Design. 33 Tranche Summary ADB approved the Loan 2754-Water Sector Investment Program - Tranche 1, not exceeding the aggregate amount of $ million on 7 June 2011 including TA amounts (if any). Impact: The impact will be the sustainable provision of safe water in Viet Nam. Outcome: Efficiency of water supply companies improved. Outputs: Increased coverage. Improved business planing and asset and financial management. Effective NRW reduction. Implementation Arrangements: The Ministry of Planning and Investment (MPI) is the coordinating agency and will select water companies to access financing for each tranche. The selected candidates will be discussed at the country programming mission and country programming confirmation mission between ADB and the government. It will also consolidate reporting with the assistance of water companies selected under each tranche. ADB will provide technical assistance to the MPI for reporting, monitoring, and dissemination. For Tranche 1 in 2010, project management was delegated to HCMC. The project owner and executing agency, Saigon Water Company (SAWACO,) had set up a project management unit (PMU) within the company. For subsequent tranches, ADB will perform due diligence on feasibility study reports following the prescribed format agreed between the government and the development partners. ADB and the government will appraise the proposed projects and discuss with the MPI and each water company the scheduling and financing plan under each tranche during the country programming mission and country programming confirmation mission. Implementation Status: The tranche encountered start-up delays in signing the subsidiary loan agreement with the Ministry of Finance under the new relending decree as this is the first time OCR financed the water sector. This required the loan to be extended by 2 years up to 30 June 2018 (approved by ADB in April 2013). The tranche is implemented through: 1) ten service contracts of which eight have been awarded and the remaining two (resettlement monitoring and social development), have been merged into the on-going consulting service contracts; and 2) six goods and works contracts of which five have been awarded. The remaining contract (with value 50% of the loan amount) was awarded but later cancelled. The rebidding is on-going (bid submission on 19 December 2016) and is expected to be awarded by June In order to complete the works, the tranche will need to be extended until the final availability date of the MFF; 31 December The government request has been received and the approval is being processed. Tranche Change in Scope Category Proposed Change

34 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 1 (Loan/Grant 2754) is a loan/grant of USD million from OCR, which was approved on 07 June 2011 and declared effective on 24 May Tranche 1 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 1 have reached $95.26 million (88.7%) and $12.89 million (100.0%), respectively. The above data includes the award of the cancelled contract valued at $57.40 million. Without this contract, the contract award is $37.86 million or 35.3% of the 31 December 2016 projections. Scope Change: There were no scope changes for this tranche in Undertaking and Covenants: All undertakings and covenants are being complied with. 1 DED = Detailed Engineering Design. 34

35 TRANCHE 2 UPDATE Tranche Title Water Sector Investment Program - Tranche 2 Project No Country/Regional Viet Nam Loan/Grant No. Project Officer van Klaveren, Paulus B. Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original 7 Dec Jun 2020 Revised Division 2961 VRM Source OCR Source Project Data Sheet 1 DED = Detailed Engineering Design. 35

36 1 DED = Detailed Engineering Design. 36 Tranche Summary ADB approved the Water Sector Investment Program - Tranche 2, not exceeding the aggregate amount of $ million on 7 December 2012 including TA amounts (if any). Impact: Sustainable provision of safe water in Binh Duong Province, Dak Lak Province, Da Nang City, Hai Phong City, Thua Thien Hue Province. Outcome: Improved efficiency of participating water supply companies Outputs: Increased coverage to 90% by Improved business planning, asset and financial management. NRW Reduced. Implementation Arrangements: The Ministry of Planning and Investment (MPI) will be the coordinating agency and select water companies to access financing for each tranche. The selected candidates will be discussed at the country programming mission and country programming confirmation mission between ADB and the government. It will also consolidate reporting with the assistance of water companies selected under each tranche. ADB will provide technical assistance to the MPI for reporting, monitoring, and dissemination. For tranche 2 the project management was delegated to each of the participating water supply companies, which had to set up a project management unit within the company. For subsequent tranches, ADB will perform due diligence on feasibility study reports following the prescribed format agreed between the government and the development partners. ADB and the government will appraise the proposed projects and discuss with the MPI and each water company the scheduling and financing plan under each tranche during the country programming mission and country programming confirmation mission. Implementation Status: Tranche 2 was approved in 2012 for the following components: 6 water companies borrowing for investment; 9 water companies borrowing for detailed engineering design; and, preparation of bid documents for financing of investment under a subsequent tranche for a total of $ million with an OCR loan of $ million. Three water companies have requested cancellation of the loan amounts allocated to them, totaling $21.29 million, representing 10% of the loan amount. A formal request from the government has been received on 30 December 2016 and is being processed. Tranche Change in Scope Category Proposed Change

37 Overall Rating Financial Safeguards Technical & (Cumulative) Tranche Performance ( Quarterly Performance as of 31 Dec 2016 ) On Track Potential Problem Actual Problem $ million % $ million % Significant Developments During the Year Tranche 2 (Loan 2961) is a loan of $ million from Ordinary Capital Resources (OCR), which was approved on 7 December 2012 and declared effective on 18 September Tranche 2 is rated as On Track. Progress: As of 31 December 2016, contract awards and disbursements under Tranche 2 have reached $19.77 million (100.0%) and $18.47 million (100.0%), respectively. Most of the consultancy, civil works and goods packages are to be awarded in Although currently rated as on track, after 3 years following the effectiveness of the loan, progress has been limited as reflected by the overall contract award and disbursement status. The implementation has been delayed due to lack of strong project ownership at the provincial levels and lack of capacity by the WSCs to procure works, recruit consultants and comply with ADB's safeguard requirements. Much time was lost with redesigning and re-approving project scopes, cost estimates and procurement plans. This indicates that the project was in a low state of readiness at approval. Following the Mid-term review mission in September 2016, a time bound action plan specific to each of the participating WSCs has been agreed upon. Any contract that fails to meet one of the agreed milestones will be considered for cancelation. Close monitoring and providing handson assistance, by delegation to VRM, will ensure that the project will remain on-track and will be closed before the original loan closing date. Scope Change: There were no scope changes for this tranche in Undertaking and Covenants: All covenants have been complied with. 1 DED = Detailed Engineering Design. 37

38 TRANCHE 3 UPDATE Tranche Title Water Sector Investment Program - Tranche 3 Project No Country/Regional Viet Nam Loan/Grant No. Project Officer Ishii, Satoshi Department SERD Key s Tranche Amount Cofinancing Amount Estimated Cost Overrun Estimated Amount Used for DED 1 Approval Original 27 Mar Dec 2020 Revised Division 3251 VRM Source OCR Source Project Data Sheet 1 DED = Detailed Engineering Design. 38