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LESSONS:

Northern Power Transmission Sector Project

sector: Energy | country: Viet Nam, Socialist Republic of

ADB’s appraisal of Component B of the project was inadequate. This oversight eventually delayed loan closing and caused the underutilization of the ADB loan. ADB should not approve funding for projects without independent evaluation and diligent review.

The transmission and substation subprojects that had not been appraised prior to loan presentation took longer to process than planned and call into question the justification for the sector loan approach. All but one subproject had been identified during implementation, and problems that could have been tackled prior to approval led to significant delays and increased administrative effort during project implementation. ADB should closely review the use of sector loans to ensure that problems that could be addressed during project preparation are not being deferred for the sake of expediency.

The delegation of loan administration to the Viet Nam Resident Mission improved ADB’s ability to monitor project progress by allowing for more regular and informal meetings with project management staff in order to obtain information firsthand, rather than relying on quarterly reports, which were sometimes late and/or inadequate.

The parallel cofinancing of part A with Agence Franc?aise de De?veloppement (AFD) worked well. The underlying reason was AFD acceptance of ADB rules and procedures for equipment procurement, which enabled consistent processing of ADB and AFD procurement packages. The leveraging of ADB’s participation greatly assisted completion of the national power sector development program and the arrangements could be used in similar circumstances elsewhere.

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