VALIDATION REPORT Thac Xang Hydropower Project - Nefco

VALIDATION REPORT 

Thac Xang Hydropower Project 

31 May 2012 

Japan Consulting Institute 

REPORT NO. JCI-CDM-VAL-11-041 

REVISION NO. 01.2

JCI CDM Center 

No : JCI-CDM-VAL-11-041 Rev.01.2 

CDM Validation Report for Thac Xang Hydropower Project 

Abbreviations 

Explain any abbreviations that have been used in the report here. 

ACM0002 “Consolidated baseline methodology for grid-connected electricity 

ACM0002 

generation from renewable sources” 

Add Tool 

BM 

CAR 

CDM 

CERs 

CL 

CM 

CO2 

DNA 

DOE 

EB 

EIA 

Tool for the demonstration and assessment of additionality 

Build Margin 

Corrective Action Request 

Clean Development Mechanism 

Certified Emission Reductions 

Clarification Request 

Combined Margin 

Carbon dioxide 

Designated National Authority 

Designated Operation Entity 

Executive Board 

Environmental Impact Assessment 

Emission Tool 

EPB 

ERPA 

ERs 

EVN 

FSR 

FSAR 

GHG 

GSC 

IRR 

JCI 

KP 

LoA 

MoC 

NeCF 

NEFCO 

O&M cost 

OM 

PDD 

PDD Guidelines 

PPA 

SPC 

UNFCCC 

VNEEC 

VVM 

Tool to calculate the emission factor for an electricity system 

Environmental Protection Bureau 

Emission Reduction Purchase Agreement 

Emissions Reductions 

Electricity of Viet Nam 

Feasibility Study Report 

Feasibility Study Amendment Report 

Greenhouse Gas 

Global Stakeholder Comments 

Internal Rate of Return 

Japan Consulting Institute 

Kyoto Protocol 

Letter of Approval 

Modalities of Communication 

NEFCO Carbon Fund 

Nordic Environment Finance Corporation NEFCO in its capacity as Fund Manager 

to the NEFCO Carbon Fund (NeCF) 

Operation and Maintenance cost 

Operating Margin 

Project Design Document 

Guidelines for Completing the Project design Document (CDM-PDD) and the 

proposed New Baseline and Monitoring Methodologies (CDM-NM) 

Power Purchase Agreement 

Su Pan 1 Hydropower Joint Stock Company 

United Nations Framework Convention for Climate Change 

Energy and Environment Consultant Joint Stock Company 

CDM Validation and Verification Manual 

3




TABLE OF CONTENTS 

I. VALIDATION OPINION ................................................................................................................................. 5 

II. INTRODUCTION OF CDM VALIDATION ................................................................................................. 5 

1. OBJECTIVE OF CDM VALIDATION ................................................................................................................... 6 

2. VALIDATION APPROACH .................................................................................................................................. 6 

3. VALIDATION METHODS ........................................................................................................................... 6 

3.1 Means of validation ............................................................................................................................... 6 

3.2 Clarification requests, corrective action requests and forward action requests ................................... 7 

4. STAKEHOLDER CONSULTATION PROCESS ......................................................................................... 8 

III. VALIDATION WORK ................................................................................................................................ 8 

1. VALIDATION TEAM ......................................................................................................................................... 8 

2. APPOINTMENT CERTIFICATE OF THE DOE’S VALIDATION TEAM MEMBER ....................................................... 8 

3. QUALITY CONTROL WITHIN THE TEAM OF THE VALIDATION PROCESS ............................................................. 9 

4. DESK REVIEW .................................................................................................................................................. 9 

5. FOLLOW-UP ACTIONS (INTERVIEWS WITH RELEVANT STAKEHOLDERS IN THE HOST COUNTRY ...................... 15 

IV. VALIDATION FINDINGS ........................................................................................................................ 16 

1. APPROVAL ..................................................................................................................................................... 16 

2. PARTICIPATION .............................................................................................................................................. 17 

3. PROJECT DESIGN DOCUMENT ........................................................................................................................ 17 

4. PROJECT DESCRIPTION .................................................................................................................................. 17 

5. BASELINE AND MONITORING METHODOLOGY ................................................................................................ 19 

5.1. Applicability of selected methodology to the project activity ............................................................. 19 

5.2. Project boundary ................................................................................................................................. 19 

5.3. Baseline identification ......................................................................................................................... 20 

5.4. Algorithms and/or formulae used to determinenemission reductions ................................................. 21 

6. ADDITIONALITY OF PROJECT ACTIVITY .......................................................................................................... 21 

6.1 Prior consideration of CDM ............................................................................................................... 24 

6.2 Identification of alternative ................................................................................................................. 27 

6.3 Investment analysis ............................................................................................................................. 27 

6.4 Barrier analysis ................................................................................................................................... 32 

6.5 Common practice analysis .................................................................................................................. 34 

7. MONITORING PLAN ........................................................................................................................................ 35 

8. SUSTAINABLE DEVELOPMENT ....................................................................................................................... 36 

9. LOCAL STAKEHOLDER CONSULTATION .......................................................................................................... 38 

10. ENVIRONMENTAL IMPACTS ....................................................................................................................... 38 

11. RESULT OF STAKEHOLDER CONSULTATION PROCESS ................................................................................ 39 

Appendix A: Validation Protocol 

Appendix B: Certificate of Appointment of Validation Team 

4




I. VALIDATION OPINION 

Japan Consulting Institute (JCI) has performed a validation of the Thac Xang Hydropower Project 

(hereafter called “the proposed project”). The summary of the positive opinion is as follows; 

(a) Validation methodology and tool 

The proposed project correctly applies the validation methodology and process; 

- ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from 

renewable sources” (Version 12.2.0) 

- Tool to calculate the emission factor for an electricity system (Version 02.2.1) 

- Tool for the demonstration and assessment of additionality (Version 06.0.0) 

(b) Validation criteria 

The validation is performed on the basis of United Nations Framework Convention for Climate 

Change (UNFCCC) criteria for the Clean Development Mechanism (CDM) and host country 

criteria, as well as criteria given to provide for consistency of project operations, monitoring and 

reporting. 

(c) Validation process 

The review of the Project Design Document (PDD) and the subsequent Follow-up Interviews are 

provided to JCI with sufficient evidence to determine the fulfillment of stated criteria. 

(d) Approval 

The host country is the Viet Nam and the Annex I country is the Kingdom of Sweden (hereafter 

called “Sweden”). Both countries fulfill the participation criteria, approve the proposed project and 

authorize the project participants. The DNA of Viet Nam confirmed that the proposed project 

assists in achieving sustainable development. 

(e) Expected emission reductions. 

The total emission reductions from the proposed project are estimated to be on the average 34,926 

tCO2e per year over the selected 7 year crediting period. The emission reduction forecast is 

checked and it is deemed likely that the stated amount is achieved given that the underlying 

assumptions do not change. 

(f) Others 

Monitoring procedure is planned before commissioning of the project activity and the manuals will 

be prepared before the plant operation and the first verification. 

(g) Validation conclusions 

In summary, it is JCI’s validation opinion that the proposed project as described in the PDD 

version 2.1 dated “28 May 2012” meets all relevant UNFCCC requirements for the CDM and all 

relevant host country criteria and correctly applies the ACM0002 (Version12.2.0). 

JCI thus provides a positive opinion and requests for the registration of the proposed project as a CDM 

project activity. 

II. 

INTRODUCTION OF CDM VALIDATION 

Energy and Environment Consultancy Joint Stock Company (VNEEC) has commissioned JCI to perform 

the validation of the “Thac Xang Hydropower Project” (hereafter called “the proposed project”). This 

report summarizes the findings of the validation of the proposed project, performed on the basis of CDM 

Validation and Verification Manual (CDM VVM) and related UNFCCC criteria for the CDM, as well as 

5




criteria given to provide for consistency of project operations, monitoring and reporting. UNFCCC 

criteria refer to Article 12 of the Kyoto Protocol, the CDM modalities and procedures, (the Simplified 

modalities and procedures for small-scale CDM project activities) and the subsequent decisions by the 

CDM Executive Board (CDM EB). 

1. Objective of CDM Validation 

The purpose of validation is to ensure a thorough, independent assessment of proposed project activities 

submitted for registration as a proposed CDM project activity against the applicable CDM requirements. 

JCI reports the results of its assessment in a validation report. JCI submits this validation report, along 

with the supporting documents to the CDM EB as part of the request for registration of a project activity 

as a proposed CDM project activity. 

The validation report includes a positive validation opinion as the project activity complies with the 

applicable CDM requirements. 

2. Validation approach 

The CDM is a rules-based mechanism. Therefore, JCI ensures that, in accordance with the CDM VVM 

and CDM requirements, these rules are complied with for any project activities requesting registration as 

a proposed CDM project activity. 

During validation, JCI assesses whether the project design of the proposed CDM project activity meets 

the CDM requirements. For this, JCI, using objective evidence, assesses the completeness and accuracy 

of the claims and conservativeness of the assumptions made in the PDD. The evidence used in this 

assessment is not limited to that provided by the project participants. 

In assessing evidence, JCI does not omit evidence that is likely to alter the validation opinion. In the 

assessment of evidence, JCI used the acceptable approaches as specified in Section E of Chapter V. CDM 

Validation in the CDM VVM , and JCI ensures that the project activity complies with the relevant 

requirements set out in the CDM modalities and procedures, the applicability conditions of the selected 

methodology and guidance issued by the CDM EB before submitting a request for registration. 

In case the validation report includes a negative validation opinion the validation report shall be sent to 

the CDM EB. 

3. VALIDATION METHODS 

3.1 Means of validation 

JCI applies standard auditing techniques to assess the correctness of the information provided by the 

project participants, including, where appropriate, but not limited to: 

(a) Document review, involving: 

(i) Review of data and information to verify the correctness, credibility and interpretation of 

presented information; 

(ii) Cross checks between information provided in the PDD and information from sources other 

than that used, if available, and if necessary independent background investigations 

(b) Follow-up actions (e.g., on site visit and telephone or email interviews), including: 

(i) Interviews with relevant stakeholders in the host country, personnel with knowledge of the 

project design and implementation; 

(ii) Cross-check of information provided by interviewed personnel (i.e. by checking sources or 

other interviews) to ensure that no relevant information has been omitted from the validation; 

(c) Reference to available information relating to projects or technologies similar to the proposed 

CDM project activity under validation; and 

(d) Review, based on the approved methodology being applied, of the appropriateness of formulae 

and correctness of calculations. 

6




3.2 Clarification requests, corrective action requests and forward action requests 

If, during the validation of a project activity, JCI identifies issues that need to be further elaborated upon, 

researched or added to in order to confirm that the project activity meets the CDM requirements and can 

achieve credible emission reductions, JCI ensures that these issues are correctly identified, discussed and 

concludes in the validation report. 

JCI raises a corrective action request (CAR) if one of the following occurs: 

(a) The project participants have made mistakes that will influence the ability of the project activity to 

achieve real, measurable additional emission reductions; 

(b) The CDM requirements have not been met; 

(c) There is a risk that emission reductions cannot be monitored or calculated. 

JCI raises a clarification request (CL) if information is insufficient or not clear enough to determine 

whether the applicable CDM requirements are met. 

JCI raises a forward action request (FAR) during validation to highlight issues related to project 

implementation that require review during the first verification of the project activity. FARs are not 

related to the CDM requirements for registration. 

JCI resolves or “closes out” CARs and CLs only if the project participants modify the project design, 

rectify the PDD or provide adequate additional explanations or evidence that satisfies the JCI’s concerns. 

If this is not done, JCI does not recommend the project activity for registration to the CDM EB. 

JCI reports on all CARs, CLs and FARs in its validation report. This reporting is undertaken in a 

transparent and unambiguous manner that allows the reader to understand the nature of the issue raised 

the nature of the responses provided by the project participants, the means of validation of such responses 

and clear reference to any resulting changes in the PDD or supporting annexes. 

The validation protocol consists of two tables. The different columns in these tables are described as 

followings. 

Validation protocol tables 

Table 1: Requirements checklist 

Requirement (Checklist Question) : 

The various requirements in Table 1 are checklist questions the project should meet. The 

checklist is organised in different sections, following the logic of the latest VVM, the PDD 

Guidelines and the large-scale PDD template, version 03 - in effect as of: 28 July 2006. 

Each section is then further sub-divided. 

Reference : 

Gives reference to documents where the checklist question or item is found. Paragraph No. 

of VVM is referred. 

Check Comment : 

The column is used to elaborate and discuss the checklist question and/or the conformance 

to the question. 

ID No. of CAR, CL and FAR : 

ID No. of CAR, CL and FAR is described. 

Corrective Action Request (CAR) is used due to non-compliance with the checklist 

question. 

Clarification Request (CL) is used when the validation team has identified a need for 

further clarification. 

Forward Action Request (FAR) is used to highlight issues related to project 

implementation that require review during the first verification of the project activity. 

Table 2: Resolution of Corrective Action and Clarification Requests 

Clarifications and corrective action requests : 

7




Table 2: Resolution of Corrective Action and Clarification Requests 

If the conclusions from the draft Validation are either a CAR, a CL or a FAR, these should be listed 

in this section. 

Ref. to checklist question in Table1 : 

Reference to the checklist question number in Table1 where the CAR, CL or FAR is explained. 

Summary of project owner response : 

The responses given by the project participants during the communications with the validation team 

should be summarised in this section. 

Validation team conclusion : 

This section should summarise the validation team’s responses and final conclusions. 

4. STAKEHOLDER CONSULTATION PROCESS 

JCI makes the PDD of the project activity under consideration publicly available in accordance with the 

latest version of the “Procedures for Processing and Reporting on Validation of CDM Project 

Activities”* 1 . 

*1 . 

During the validation of the project activity, JCI takes into account the comments received and the 

validation report includes details of actions taken to take due account of the comments during the 

validation process. 

If comments are not sufficiently substantiated or indicate that the project activity does not comply with 

the CDM requirements, then JCI requests further clarification from the entity providing the comment. 

However, JCI does not required to enter into a dialogue with Parties, stakeholders or NGOs that 

comment on the CDM requirements. If no additional information or substantiation is provided in response 

to a request for clarification, JCI proceeds to assess the comments as originally provided. 

III. VALIDATION WORK 

JCI carried out the validation work to ensure that the project activity complies with the requirements 

of paragraph 37 of the CDM modalities and procedures 

1. Validation Team 

Details of the validation team are shown in below Table. 

Qualified Technical Areas 

Role/Qualification 

Name 

related to the Project 

All relevant issues 

1.2 Energy generation from 

Shigeo Aoki 

/Team Leader 

renewable energy source 

Team Member 

Kenichi Suzuki 

1.2 Energy generation from 

renewable energy source 

On-site Visit 

- 

✓ 

Team Member Mitsuo Takano - - 

Details of the technical reviewer are shown in below Table. 

Name 

Qualified Technical Areas related to the Project 

Masaki Okada 

1.2 Energy generation from renewable energy source 

8




2. Appointment certificate of the DOE’s validation team member 

The certificate of appointment of validation team member is attached in Appendix B to this report. 

3. Quality Control within the team of the validation process 

The validation report is worked out by the team underwent an internal review process for the assurance 

of being in compliance with the applicable requirement of the latest version of CDM VVM. 

JCI applies internally established Quality Management Program for the required review process, which 

is defined as follows; 

1) Internal Review for the interim check by the internal audit team and the technical reviewer 

2) The evaluation of the validation work in the CDM evaluation committee consists of outside 

experts 

3) Internal review for the final check by the internal audit team and the technical reviewer 

The review and evaluation including the technical review are implemented for every validation work 

by the competent personnel assigned in accordance with JCI’s qualification scheme for CDM 

validation and verification. 

4. Desk Review 

Document review is involving: 

(i) Review of data and information to verify the correctness, credibility and interpretation of 

presented information; 

(ii) Cross checks between information provided in the PDD and information from sources other 

than that used, if available, and if necessary independent background investigations 

The following table outlines the documentation reviewed during the validation: 

1 

Table 3 Document list of the proposed project 

1. < PDD, FSAR, EIA> Issued on Issued by 

PDD version 1.1 for Global Stakeholder Process 

(GSC) 

9 

15/08/2011 

Energy and 

Environment 

Consultant Joint 

Stock Company 

(VNEEC) 

2 PDD version 2.1 for Request for Registration (RFR) 28/05/2012 VNEEC 

3 Internal rate of return (IRR) spreadsheet, rev.2 28/05/2012 VNEEC 

4 Feasibility Study Amendment Report (FSAR) March 2010 

Vietnam Energy 

Construction 

Consultant JSC 

4B Verification study for cost estimation 02/05/2011 

Works Quality 

Verification and 

Design Validation 

Consulting Agency 

5 Environmental impact Assessment (EIA) Report 

May Geophysics 

2008 Technology JSC 

2. < Letters of Approval > 

Ministry of Natural 

6A 

LOA (Letter of Approval) of Viet Nam (in 

Resources and 

22/03/2012 

Vietnamese and English) 

Environment (DNA 

of Viet Nam) 

6B LOA (Letter of Approval) of Sweden 14/05/2012 Swedish Energy




7 

Approval Letter for EIA Report of Lang Son 

province 

19/06/2008 

8 Approval Letter for FSR 27/05/2009 

8B Review statement for FSAR 06/05/2011 

9 

Investment license of Su Pan 1 Hydropower Joint 

Stock Company (SPC) 

17/06/2009 

10 Business Registration Certificate of SPC 17/12/2009 

Agency (DNA of 

Sweden) 

Department of 

Natural Resources 

and Environment 

(DONRE) of Lang 

Son Province 

People’s Committee 

of Lang Son 

Province 

Board Management 

of SPC approving to 

the FSAR 


of Lang Son 

Province 

Investment and 

planning department 

of Ha Noi city 

11A 

Certificate for Land use right No. BA896218 (for the 

land area of 4,248 m 2 in Hung Viet Commune 

17/12/2010 


of Lang Son 

Province 

11B 

Business Registration Certificate for Land use right 

No. BA896219 (for the land area of 885,650m 2 + 

42,138m 2 in Hung Viet Commune 

07/12/2010 


of Lang Son 

Province 

3. < Contracts, Agreements for Project> 

12 Power Purchase Agreement 12/11/2009 

Electricity of Viet 

Nam (EVN) 

13 Emission Reduction Purchase Agreement (ERPA) 21/07/2011 SPC and NEFCO 

14 Approval Letter for Land Compensation Plan 14/05/2008 


of Lang Son 

Province 

15 Bank Loan Agreement 11/05/2011 

Vietnam Bank for 

Agriculture and 

Rural Development - 

Lang Son branch 

16 Contract for CDM Consultation 15/03/2010 VNEEC 

17 Contract for civil engineering 16/09/2010 

Group of SH & 

SALIMON TRUNG 

KHANH, 

18 Contract for equipments purchasing 19/07/2011 

Hunan Allonward 

Hydro-Generation 

Equipment Co. 

4 Policy, Regulation 

21 

National Development Strategies and Master Plans 

for Renewable Energy for the period up to 2015 with 

08/07/2007 

Ministry of Trade 

and Industry 

10




the perspectives up to 2025 

23 

National Development Strategy for Hydropower 

Generation (Decision No.3454/QD-BCN) 

Jurisdictions to approve the Master Plans and 

management hierarchy for hydropower projects 

11 

18/10/2005 

24 Environment Protection Law of Vietnam 2005 29/11/2005 

25 

27 

28 

29 

30 

31 

32 

33A 

33B 

33C 

34 

35A 

35B 

36A 

Temporary guidelines for economic, financial and 

investment analysis (Decision 709/2004/QD - 

NLDK) 

Promulgating the List of measuring devices subject 

and expertise registration (Decision No.65/2002/QD- 

BKHCNMT) 

Approval of the strategy for development of 

electricity industry 2004-2010 (Decision No. 

176/2004/QD-TTg) 

Regulation on managing, investing and constructing 

the Independent Power Projects (Decision No 

30/2006/QD-BCN) 

Guidance for the Implementation of the Law on 

Environmental Protection 2005 (Decree No. 80/2006/ 

ND-CP) 

Guiding Assessment of EIA report (Decree 

No.08/2006/TT-BTNM) 

Regulation on Electricity Activities and Electricity 

Utilization (Decree No.45/2001/ND-CP) 

Promulgation on Avoided Cost Tariff for 2010 

included temporary guideline for conducting the 

economic, financial and investment analysis and 

providing the purchasing-selling price framework 

(Decision No. 73/QD-DTDL) 

Regulation on electricity tariff included Temporary 

guidelines for conducting the economic, financial and 

investment analysis and providing the purchasingselling 

price frame for power generation projects 

(Decision No. 2014/2007/QD-BCN) 

Evidence of designed electricity price(Government 

Decision No.18/2008/QD-BTC) 

Electricity price for calculating royalties on natural 

water used for hydropower generation in 2010 

(Decision No. 588/2010/QĐ-BTC) 

Regulation for Natural Resource Tax (Circular No. 

124/2009/TT-BTC) 

Evidence of Natural Resource Tax (Government 

Decree No. 05/2009/ND-CP) 

Circular on guiding VAT, royalties and business 

income tax for hydropower generation establishments 

13/04/2004 

19/08/2002 

Ministry of Industry 

and Trade 

National 

government 


and Trade 

Ministry of Science, 

Technology and 

Environment 

05/10/2004 Prime's Minister 

31/08/2006 

09/08/2006 

09/08/2006 

02/08/2001 

30/12/2009 

13/06/2007 

18/07/2008 


and Trade 

National 

government 

Department of 

Natural Resources 

and Environment 

(DONRE) 

National 

government 


and Trade 


and Trade 

National 

government 

22/03/2010 Ministry of Finance 


19/01/2009 

National 

government 

11/03/2009 Ministry of Finance




36B 

36C 

37A 

37B 

37C 

38 

(Circular 45/2009/TT-BTC) 

Implementation of enterprise tax law (Decree No. 

124/2008/ND-CP) 

Detailing the Implementation of the Law on 

Enterprise Income Tax (Government Decree No. 

164/2003/ND-CP) 

Promulgating the List of measuring devices subject 

and expertise registration (Decision No.65/2002/QD- 

BKHCNMT) 

Guiding on implementation of a number of financial 

mechanisms and policies applicable to investment 

projects under the CDM (Circular No.58/2008/TTLT- 

BTCBTNMT) 

Circular on regulating meter system in the competing 

generation market (Circular No.27/2009/TT-BCT) 

Irrigation projects - Major standards on designing 

(TCXDVN/285/2002) 

12 

11/12/2008 

22/12/2003 

19/08/2009 

National 

government 

National 

government 

Ministry of Science, 

Technology and 

Environment; 


25/09/2009 

2002 


and Trade 

National 

government 

39 2010 Baseline Emission Factors in Viet Nam 26/03/2010 DNA of Vietnam 

5 References 

41 

List of Registered hydropower project (up to 30MW) 

in Viet Nam 

VNEEC 

42 List of power plants published by the Vietnam DNA DNA of Vietnam 

44 

45 

Prospectus of Nam Mu Hydropower Joint Stock 

Company 

Information for ODA soft-loan (Ea Krong Rou 

hydropower plant) 

47 Information of Song Da Corporation 

48 

50 

51 

52 

Governmental tool for macroeconomic interferences 

rather a profit making 

Prime Minister's Decisions for formulation of these 

corporations is to aim at developing power and 

construction industries 

Contract for ODA credit (Suoi Sap Hydropower 

plant) 

2006 IPCC Guidelines for National Greenhouse Gas 

Inventories, Volume 2 Energy: p. 1.23-1.24 

07/03/1994 

07/05/2007 

53 Transaction rates of commercial banks date 19/04/2010 

54 

Viet Nam Price Index (World Economic Outlook 

Database) 

http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/weore 

pt.aspxpr.x=56&pr.y=9&sy=2004&ey=2016&scsm=1&ssd=1& 

sort=country&ds=.&br=1&c=582&s=PCPIPCH&grp=0&a=#do 

wnload 

6 < Project related documents > 

61 Organization chart of the PO’s company 

09/2011 

National 

government 

IPCC 

State Bank Viet 

Nam 

International 

Monetary Fund 

Su Pan 1 

Hydropower Joint 

Stock Company 

(SPC)




67 Minutes of Board resolution for investment decision 19/04/2010 SPC 

68A 

68B 

68C 

69A 

69B 

69C 

70A 

70B 

70C 

71 

72 

Invitation letter to Stakeholders' meeting in Bac La 

commune 

Invitation letter to Stakeholders' meeting in Hong 

Phong commune 

Invitation letter to Stakeholders' meeting in Hung 

Viet commune 

Minute of Stakeholder Consultation Meeting in Bac 

La commune 

Minute of Stakeholder Consultation Meeting in Hong 

Phong commune 

Minute of Stakeholder Consultation Meeting in Hung 

Viet commune 

Questionnaire and Responses (Stakeholders’ 

comments) in Bac La commune 


comments) in Hong Phong commune 


comments) in Hung Viet commune 

Official letter supporting the CDM project by Lang 

Son Provincial People's Committee to DNA 

Prior consideration of the CDM Notification letter 

(Host country) 

28/10/2009 SPC 

28/10/2009 SPC 

28/10/2009 SPC 

04/11/2009 SPC 

04/11/2009 SPC 

05/11/2009 SPC 

04/11/2009 SPC 

04/11/2009 SPC 

05/11/2009 SPC 

03/03/2011 

29/12/2010 VNEEC 

73 Prior Consideration of the CDM for UNFCCC 29/12/2010 VNEEC 

75 

Weekly Information on Banking Activities for Group 

of state commercial banks 

88 Details of loss load and internal consumption 

08/01/2010 

through 

15/04/2010 


of Lang Son 

Province 

State Bank of 

Vietnam 

Vietnam Energy 

Construction 

Consultant JSC 

89 Cost summary for Thac Xang HPP SPC 

7. 

91 

ACM0002 “Consolidated baseline methodology for 

grid-connected electricity generation from renewable 

UNFCCC 

sources” (Version 12.2.0) 

92 

Tool to Calculate the Emission Factor for an 

Electricity System (Version 02.2.1) 

UNFCCC 

93 

94 

95 

Tool for the Demonstration and Assessment of 

Additionality (Version 06.0.0) 

Guideline For Completing The Project Design 

Document (CDM-PDD) And The Proposed New 

Baseline And Monitoring Methodologies (CDM-NM) 

(Version 07) 

Guidelines on the Assessment of Investment Analysis 

(Version 05) 

UNFCCC 

UNFCCC 

UNFCCC 

13




96 

Guidelines on the Demonstration and Assessment of 

Prior Consideration of the CDM (Version 03.0) 

UNFCCC 

97 Glossary of CDM terms (Version 05 ) UNFCCC 

98 

CDM Validation and Verification Manual (Version 

01.2) 

UNFCCC 

Main changes between the version published for the 30 days stakeholder commenting period and the 

final version submitted for registration: 

Table 3. Major Changes in the Content of the PDDs 

Subject and section 

in the PDD 

A.4.1.4 Figure 1 

Project location 

A.4.2. Table 1 

Lifetime of 

equipment 

B.1. 

Applied methodology 

and Tools 

B.5. Table 5 Major 

milestones 

Event of after 

Notifying the project 

activity to DNA and 

EB 

B.5. Figure 4: 

Project sensitivity 

analysis 

Original content in the PDD 

for GSP/1/ 

Revised content in the PDD 

for RFR/2/ 

Issued 

CAR or 

CL 

Location map is unclear It is clarified. CL-5 

Not reported 30 years reported CL-6 

Version 12.1.0 of ACM0002: 

Version 02.2.0 of Calculation 

Tool 

Version 05.2 of Add Tool 

Not reported 

Figure of sensitive analysis is 

no reported. 

Version 12.2.0 of ACM0002: 

Version 02.2.1 of Calculation 

Tool 

Version 06.0.0 of Add Tool 

Signing equipment contract 

(19/07/2011), 

Signing ERPA (21/07/2011), 

Signing the contract with DOE 

(25/07/2011), 

Uploading the PDD at the EB 

website for GSP (17/08/2011) is 

added. 

Figure of sensitive analysis is 

reported. 

- 

CL-11 

CL-16 

B.5. Common 

practice analysis 

It is demonstrated in 

accordance with Add Tool 

Version 05.2 

The demonstration steps are 

revised in accordance with 

Version 06.0.0 

CL-19 

B.6.1 BEy 

OM: 0.6465 tCO2/MWh 

BM: 0.5064 tCO2/MWh 

CM:0.5764 tCO2/MWh 

OM: 0.6240 tCO2/MWh 

BM: 0.4876 tCO2/MWh 

CM: 0.5558 tCO2/MWh 

CL-21 

B.6.2, Annex 3; 

Emission factor CO2 

The default value of IPCC is 

used. 

The lower value of IPCC is used 

CL-21 

A.4.4, B.6.4. 

Estimation of 

emission reduction 

BEy :43,348 tCO2e/y 

ERy: 36,476tCO2e/y 

BEy :41,798 tCO2e/y 

ERy: 34,926 tCO2e/y 

CL-21 

14




5. Follow-up actions (Interviews with relevant stakeholders in the host 

country 

The on-site visit and interviews with project stakeholders are held from 25 to 26 September 2011 at the 

proposed project site in Hung Viet commune of Trang Dinh district, Lang Son province, Viet Nam. 

The names of interviewees are listed as follows; 

Table 4. List of interviewees 

No. Date Name Organization Topics 

/101/ 26/09/2011 1. Mr. Ha Van 

Thiet, 

2. Mr. Hoang 

Trung Tuyen 

/102/ 26/09/2011 1. Mr. Luong 

Trung Thuyen, 

2. Mr. Nguyen 

Ngoc Anh 

/103/ 26/09/2011 1. Mr. Dinh 

Van Tuan, 

2. Mrs. Doan 

Thi Loan 

/104/ 25/09/2011 1. Mr. Ha Van 

Thuy, 

2. Mr. Vu 

Ngoc Hanh, 

/105/ 25/09/2011 1. Mr. Tran 

Minh Tuyen 

2. Ms. Vu Thi 

Van Anh, 

3. Ms. Luu 

Minh Nghia 

Department of Industry 

and Trading (DIT) [Local 

government] 

1. Vice President 

2. Secretary 

Department of Natural 

Resource and Environment 

(DONRE) [Local 

environmental Protection 

Bureau] 

1. Vice Head 

2. Officer 

Local residents: 

1. Ban Tet village, Hung 

Viet commune 

2. Phieng Chuong village, 

Hung Viet commune 

Su Pan 1 Hydropower 

Joint Stock Company (PO) 

1. General Director 

2. Vicel Director 

VNEEC; 

1. Executive Director 

2. Project manager 

3. Project supporter 

15 

Interview with local 

government 

• Business scope of office 

• Public hearing 

• Mitigation 

• Opposition opinion 

• Price 

Interview with local 

Environmental protection 

bureau 

• Business scope of office 

• Environment protection policy 

• EIA reports 

Interview with Local residents 

• Consultation with stakeholders 

• Comments on the project 

• Environmental or ecological 

issues 

• Future concerns 

Interview with Project Owner 

(PO) 

• Outline of the project 

• Confirmation of the following 

major items 

Timeline, Serious 

consideration, Purchase 

Agreement, Management, 

Education, Training, 

Maintenance, Monitoring , 

etc. 

Interview with CDM 

consultant (PDD Author) 

• Discussion for feasibility 

Study 

• Discussion for plant designing 

• Discussion for investment 

analysis 

• Discussion for monitoring 

plan 

• Discussion for Public hearing




• Discussion for environmental 

protection 

• Discussion for Initial Findings 

• Documentation 

IV. VALIDATION FINDINGS 

The findings of the validation are stated in the following sections. The validation criteria (requirements), 

the means of verification and the results from validating the identified criteria are documented in more 

detail in the validation protocol in Appendix A. 

Findings issued through the validation 

JCI has issues the one (1) CAR, thirty (30) CLs and three (3) FARs as shown in the Validation 

Protocol, Appendix A of this report. All the CAR and CLs are resolved and then closed as shown in the 

Table 2 of the Appendix A. Major issues and its resolution process through the CAR, CLs and FARs 

are described in following items according to CDM VVM. 

The final validation findings relate to the project design as documented and described in the revised and 

resubmitted project design documentation. 

1. Approval 

JCI has received the Letters of Approval (LoA) from the project participants are clearly referenced by 

the letter itself and all supporting documentations; 

‣ Ministry of Natural Resources and Environment (MONRE) of Viet Nam issued the LoA/6A/ to 

Su Pan 1 Hydropower Joint Stock Company (SPC) and Energy and Environment Consultancy 

Joint Stock Company (VNEEC) dated 22 March 2012, and 

‣ Swedish Energy Agency issued the LoA/6B/ to Nordic Environment Finance Corporation 

NEFCO in its capacity as Fund Manager to the NEFCO Carbon Fund (NeCF) 

[Hereafter ”NEFCO”] dated 14 May 2012. 

JCI assesses the legitimacy of MONRE by the information of UNFCCC website such as; 

http://cdm.unfccc.int/DNA/view.htmlCID=233 

JCI confirms the MONRE is the governmental organization and the Designated National Authorities 

(DNA) of Viet Nam. JCI also confirms the Swedish Energy Agency is the governmental organization 

and the Designated National Authorities (DNA) of Sweden. 

JCI concludes that the Viet Nam LoA/6A/ reported the followings; 

1) DNA of Viet Nam approves the “Thac Xang Hydropower Project” of SPC and VNEEC. 

2) Viet Nam has ratified the Kyoto Protocol on 25 September 2002. 

3) The proposed CDM project activity contributes to the sustainable development of the Viet Nam as 

Host country. 

4) The participation is voluntary. 

5) The proposed project will contribute to sustainable development in Viet Nam. 

6) The duration of validity of the LoA shall be 24 months from 22 March 2012. 

JCI conclude that the Sweden LoA/6B/ reportde the followings; 

1) DNA of Sweden approves the “Thac Xang Hydropower Project”. 

16




2) Sweden has ratified the Kyoto Protocol on 31 May 2002. 

3) The LoA authorizes NEFCO as a project participant of the proposed project of “Thac Xang 

Hydropower Project”. 

There is no indication during the validation process that the proposed project uses the official 

development assistance funding for Viet Nam. 

JCI concludes that both LoAs are credible and fully complies with the requirements by the CDM. 

2. Participation 

JCI assesses that the project participants are listed in tabular form in section A.3 of the PDD and that 

this information is consistent with the contact details provided in Annex 1 of the PDD for RFR/2/. Also 

JCI confirms that no entities other than those approved as all project participants are included in these 

sections of the PDD for RFR/2/. 

JCI concludes that the project participants are credible and fully comply with the requirements by the 

CDM. 

3. Project Design Document 

Through desk reviews and Q&A sessions with the PDD author, JCI assesses that the PDD is described 

based on and referring to the following relevant tools, guidance, guidelines, and manual in addition to 

the applied methodology. 

- ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from 

renewable sources” (Version 12.2.0) 

- Tool to Calculate the Emission Factor for an Electricity System (Version 02.2.1) 

- Tool for the Demonstration and Assessment of Additionality (Version 06.0.0) 

- Guidelines for Completing the Project design Document (CDM-PDD) and the proposed New 

Baseline and Monitoring Methodologies (CDM-NM) (Version 07) 

- Guidelines on the Assessment of Investment Analysis (Version 05.0) 

- Guidelines on the Demonstration and Assessment of Prior Consideration of the CDM (Version 

03.0) 

- Glossary of CDM terms (Version 05 ) 

- CDM Validation and Verification Manual (Version 01.2) 

The project design has been described using the CDM-PDD template of the latest version 07/94/ as 

shown in the PDD for RFR/2/, that is confirmed through comparison with the template listed on the 

UNFCCC website. 

As described above, JCI concludes that PDD for RFR/2/ is completed with use of the appropriate 

format and is described based on appropriate tools, guidelines, manual and guidance which are 

specified and requested by the CDM procedures. 

4. Project Description 

The major features of the project activity described in the PDD for RFR/2/ are summarized Table 6. 

Table 6 major features of the project activity 

Data 

01 (Energy industries (renewable / non-renewable 

Sectoral scope 

sources)) 

Project location 

The proposed project site is straddled with 3 district of 

17




Lang Son province, Viet Nam 

1) Hung Viet commune of Trang Dinh district, 

2) Bac La commune of Van Lang district, 

3) Hong Phong commune of Binh Gia district 

Geographical coordinates 

22°10' 21.96''N, 106°29' 53.20''E (Power house) 

Project type 

Reservoir type hydropower plant 

Installed capacity 

20 MW (10 MW × 2 units) 

Connecting grid 

Electricity of Viet Nam (EVN) 

Annual electricity supplied to 

EVN 

75,205 MWh/y 

Plant Load Factor (PLF) 43.58 % 

Loss load of electricity 1.5 % 

Estimated emission reductions 34,296 t-CO 2 e/y 

Surface Area of reservoir 2,500,000 m 2 

Lifetime of equipment 

30 y 

Project lifetime 

30 y 

First crediting period 

7 years 

JCI raised the finding of CL-1 through CL-9 to confirm and validate the project description in the PDD 

for RFR/2/. 

- CL-1: It is requested to provide FSR and IRR for identification of consistency with PDD. FSR 

has been approved by local government/8/ and the input values of IRR are consistent 

with PDD. CL-1 is closed. 

- CL-2: It is requested to clarify company’s title of Annex I country. The revised title is consistent 

with MoC. CL-2 is closed. 

- CL-3: It is requested to provide Board Meeting Records for investment decision. The 

investment decision has been reported in the Meeting Record appropriately. CL-3 is 

closed. 

- CL-4: It is requested to clarify the detail of loss load such as Internal consumption rate, effective 

power factor (Transformer loss rate) and transmission loss rate. 1.5 % of loss load is 

conservative manner that is consistent with the existing national code and regulation 

national code and regulation. CL-4 is closed. 

- CL-5: It is requested to revise the location map. The revised map is clearly reported the location. 

CL-5 is closed. 

- CL-6: It is requested to clarify the lifetime of turbine and generator. 30 years of technical 

lifetime is complied with Methodological Tool; ”Tool to determine the remaining 

lifetime of equipment” (Version 01)”. CL-6 is closed. 

- CL-7: It is requested to explain the hydraulic data, such as annual river flow data, name of 

monitoring station and monitoring periods. The hydraulic data is based on long-term river 

hydrologic data (1960 – 2008). CL-7 is closed. 

- CL-8: It is requested to clarify how to calculate the Plant Load factor (PLF) and the annual net 

electricity supplied to the grid (EG facility,y ). The calculation process of PLF, EG facility,y and 

operation hours are clarified and appropriate. CL-8 is closed. 

- CL-9: It is requested to provide specification data of turbines and generators. PP could not 

provided them because the specification data has not been issued by the manufacturer. 

CL-9 is transfered to FAR-1. 

Therefore, the finding of CL-1 through CL-8 are resolved and closed, and CL-9 is transfered to FAR-1, 

18




As a result of above assessment, "4. Project Description", JCI concludes the major features of the PDD 

for RFR/2/ has sufficiently accuracy and completeness and well outlined for the nature and technical 

aspects of the project activity. 

5. Baseline and monitoring methodology 

5.1. Applicability of selected methodology to the project activity 

According to paragraph 68 of CDM VVM/98/, JCI assesses application of ACM0002 “Consolidated 

baseline methodology for grid-connected electricity generation from renewable sources” (Version 

12.2.0)/91/ to the project activity by the following steps and viewpoints; 

The following steps and information should be taken into consideration: 

Steps: Document review, Follow-up actions(On-site visit, interviews), etc. 

Information: Findings (CARs, CLs), Previous plant layout, FSAR, EIA Report, Technical 

specifications, Design data/drawings, Relevant laws/regulations/codes, 

Acceptance report, Production reports, 

Monthly and yearly statistics, Internet websites, 

1) Document review 

JCI assesses FSAR/4/ and project related document to assess the applicability of selected 

mthodology of the project activity. JCI judges the proposed project is eligible as a small scale 

CDM project activity and will be able to apply the selected methodology, ACM0002 (Version 

12.2.0)/91/. JCI confirms the project activity are; 

- Hydro power project which is one of the renewable energy generation 

- Hydro power project that supplies electricity to EVN 

- New power plant at a site where there was no renewable energy power plant operating prior to 

the implementation of the project activity (Greenfield plant) 

- Power density is 8 W/m 2 which is greater than 4 W/m 2 and less than 10 W/m 2 

2) Follow-up action 

JCI has assessed the proposed project by observation/inspection of the physical site and/or 

equipment during on-site visit and interviewed with stakeholders/101/ through /105/. 

3) Findings 

JCI has not raised any CAR and CL to assess the applicability of selected methodology of the 


As a result of the above assessment, ” 5.1 Applicability of the selected methodology”, JCI confirms; 

a. The proposed project has eligibility as a CDM project activity. 

b. The methodology/91/ is correctly quoted and applied. 

Furthermore, according to paragraph 77 of CDM VVM/98/, JCI confirms that there are no 

greenhouse gas emissions occurring within the proposed project activity boundary as a result of the 

implementation of the proposed CDM project activity which are expected to contribute more than 

1% of the overall expected average annual emissions reductions, which are not addressed by the 

applied methodology. 

5.2. Project boundary 

According to paragraph 78 of CDM VVM/98/, JCI assesses the project boundary of the project activity 

by the steps of 1) Document review, 2) Follow-up action and 3) Findings of CARs, CLs and FARs. 


19




The PDD for RFR/2/ is defined correctly the system boundary include the project activity site, 

EVN which encompass the physical and geographical site of the renewable generation source, 

which is shown in the Figure 2 in section B.3. As the electricity generated by the project activity 

will be transmitted to EVN/12/, and replace part of electricity from EVN which has many fossil 

fuel-fired power plants within the network, the baseline Operating Margin (OM) emission factor 

and the Build Margin (BM) emission factor are calculated within the EVN applying the Emission 

Tool/92/ according to the item 9 in ACM0002 (Version 12.2.0)/91/. In addition, it is to be 

considered that the EVN imports electricity from the EVN when OM and BM are calculated. 


JCI interviewed with project participant to confirm the project boundary of the proposed project. 

Project participant has testified the project boundary and selected sources are justifiable for the 

proposed project activity/103/. 

3) Findings of CARs, CLs and FARs 

JCI raised the finding of CL-10 to confirm and validate the project boundary in the PDD for 

RFR/2/. 

- CL-10: JCI requested to clarify the project boundary, project activity of the proposed project 

and grid structure in the Figure 3 of PDD. The Figure 3 is revised appropriately. CL-10 is 

closed. 

As a result of the above assessment, ”5.2 Project boundary”, JCI concludes that the project boundary 

has been performed, and by describing its observations during any site visit undertaken in accordance 

with paragraphs 59-62 of responding item in the CDM VVM/98/ . Also selected sources and gases has 

been defined in the PDD for RFR/2/ are corrects and the selected methodology appropriately and fully 

meets the requirements of the selected methodology ACM0002 (Version 12.2.0)/91/. 

5.3. Baseline identification 

According to paragraph 81 and 82 of CDM VVM/98/, JCI assesses that the baseline identification of 

the project activity by the steps of 1) Document review, 2) Follow-up action and 3) Findings of CARs, 

CLs and FARs and 4) paragraph 87 of CDM VVM /98/. 


As the total installed capacity of the proposed project is 20 MW, the proposed project is eligible 

as CDM project activity and can apply the methodology/91/. 

The emission factor of the EVN is calculated by combined margin (CM), consisting of the 

combination of operating margin (OM) and build margin (BM) according to the procedures 

prescribed in the Emission Tool/92/. 


The project activity is the installation of a new grid-connected hydropower plant. The baseline 

scenario is that the electricity is generated by the operation of grid-connected power plants and is 

supplied to grid. Therefore, Option II has chosen 

3) Findings of CARs, CLs and FARs 

JCI has not raised any CAR and CL to assess the baseline identification of the project activity. 

4) CDM VVM 

According to paragraph 87 of CDM VVM/98/, JCI assesses the followings (a) through (e): 

(a) All the assumptions and data used by the project participants are listed in the PDD for RFR/2/, 

including their references and sources; 

(b) All documentation used is relevant for establishing the baseline scenario and correctly quoted 

and interpreted in the PDD for RFR/2/. 

20




(c) Assumptions and data used in the identification of the baseline scenario are justified 

appropriately, supported by evidence and can be deemed reasonable; 

(d) Relevant national and/or sectoral policies and circumstances are considered and listed in the 

PDD for RFR/2/; 

(e) The approved baseline methodology has been correctly applied to identify the most reasonable 

baseline scenario and the identified baseline scenario reasonably represented what would occur 

in the absence of the proposed project activity. 

JCI confirms that the PDD for RFR/2/ identifies the baseline for the proposed CDM project 

activity, defined as the scenario that reasonably represents the anthropogenic emissions by 

sources of GHGs that would occur in the absence of the proposed CDM project activity. 

Also according to paragraph 88 of CDM VVM/98/, JCI cross-checks the information contained in 

the PDD for RFR/2/ on this matter by the similar CDM projects or actual evidences, and confirms 

that the information in the PDD for RFR/2/ is appropriately. 

As a result of the above assessment, ”5.3 Baseline identification”, JCI confirms that the procedure 

contained in the methodology of ACM0002 (Version12.2.0)/91/ has been correctly applied. 

5.4. Algorithms and/or formulae used to determine emission reductions 

According to paragraph 89 of CDM VVM/98/, JCI assesses that the algorithms and/or formulae used 

to determine emission reductions using the validation steps such as the Document review, Follow-up 

action/101/ through /105/ and the findings by confirming of following steps and sources; 

(a) All assumptions and data used by the project participants are listed in the PDD for RFR/2/, 

including their references and sources; 

(b) All documentation used is relevant for establishing the baseline scenario and correctly quoted 

and interpreted in the PDD for RFR/2/. 

(c) All the values used in the PDD for RFR/2/ are considered reasonable in the context of the 

proposed project activity; 

(d) The baseline methodology has been applied correctly to calculate project emissions, baseline 

emissions, leakage and emission reductions; 

(e) All estimates of the baseline emissions can be replicated using the data and values provided in 

the PDD for RFR /2/. 

5.4.1. Application of baseline and monitoring methodology 

JCI confirms that the PDD for RFR/2/ fully complied with the methodology of ACM0002/91/ and the 

Relevant Tool/93/ based on the baseline defined as per the applied methodology of ACM0002/91/. 

The calculations are conducted first to work out the project emissions based on the methodology and 

then work out the emission reductions with the 6-step method specified by the Relevant Tool. 

5.4.2. Baseline emissions; BEy 

(a) Combined margin emission factor; EF grid,CM,y 

According to the Relevant Tool/93/, it was calculated in the following steps: 

Step 1. Identify the relevant electricity systems 

According to the relevant tool/93/, the data of Baseline Emission factor published by the DNA of 

Viet Nam/39/ 1 on 26/03/2010 is selected. It is the latest version of Emission factor and EVN is 

identified as the electric power system from which would provide electricity in baseline scenario. 

1 EFgrid,CM,y: 0.5558 tCO2/MWh which is included rate of low cost/must-run sources based on generation. 

http://www.noccop.org.vn/Data/vbpq/Airvariable_ldoc_vnHe%20so%20phat%20thai%202008.pdf 

21




Step 2. Choose whether to include off-grid power plants in the project electricity system 

(optional) 

Only grid power plants are included in the operating margin and build margin emission factor 

calculation of the project, then Option I is chosen for the project. 

Step 3. Select a method to determine the operating margin (OM) 

The simple OM method option a) is selected, because low-cost/must-run resources constitute less 

than 50% of total grid generation in average of the five most recent years. For the proposed project, 

from 2004 to 2008, the proportion of low-cost/must-run resources in the total grid electricity of 

EVN are 39.71 % in 2004, 32.52 % in 2005, 34.13 % in 2006, 33.74 % in 2007 and 34.32 % in 

2008 respectively, lower than 40%. And also “Ex ante option” is selected. 

Step 4. Calculate the operating margin emission factor according to the selected method. 

According to the Relevant Tool/93/, Option B is used because the conditions for Option A are not 

available. The factor is calculated based on the net electricity supplied to the grid by all power 

plants serving the system, not including low-cost/must-run power plants power sources, and based 

on the fuel type(s) and total fuel consumption of the project electricity system, but including 

electricity imports to the grid, which is treated as one power plant. 

CO 2 emissions per unit net electricity generation (tCO 2 /MWh) of all generating power plants 

serving the system during the three most recent years with reference to the Baseline Emission 

factor published by the DNA of Viet Nam/39/. 

As a result, the OM emission factor EF grid,OM,y is calculated to be 0.6240 tCO 2 e/MWh, as shown in 

Annex 3 in the PDD for RFR/2/, fully complying with the methodology/91/ and the tool/93/. 

Step 5. Calculate the build margin emission factor (BM) 

According to the Relevant Tool/93/, Option 1 is chosen for the vintage of data. Regarding the 

sample group of power unit, SET ≥20% and SET 5-units are chosen as the SET sample . 

In Viet Nam, the data of the power generation, the fuel types (coal, oil and gas) and its 

consumption are available. The factor is the generation-weighted average emission factor of all 

power units with reference to recent 3 years data of the Baseline Emission factor published by the 

DNA of Viet Nam/39/. As a result, EF grid,BM,y has been correctly worked out to be 0.4876 

tCO 2 e/MWh complying with the relevant methodology, and the tool which are shown in Table 4 of 

Annex 3 in the PDD/2/. 

Step 6. Calculate the combined margin (CM) emissions factor 

JCI confirms that CM emission factor is calculated to be 0.5558 tCO 2 e/MWh which correctly 

follows the equation (13) of Emission Tool/71/. The default weight (ω) of 50% for OM and 50% 

for BM is appropriately applied for the calculation of CM emission factor of the first crediting 

period. Therefore; 

EF grid CM y = ω OM × EF grid,OM,y + ω BM × EF grid,BM,y 

= 0.5 × 0.6240 + 0.5 × 0.4876 

= 0.3120 + 0.2438 

= 0. 5558 tCO 2 e/MWh 

In PDD for GSC/1/, the fuel type of Emission Factors for combustion have been used by the default 

calorific values of IPCC, which is reported in Table 1.4, Chapter 1, Vol. 2; “2006 Guidelines for 

National GHG Inventories”/52/. Therefore, the calculation of OM, BM and CM are 0.6465 

tCO2/MWh, 0.5064 tCO2/MWh and 0.5764 tCO2/MWh respectively. However, in PDD for 

RFR/2/, the calculation have been used the lower calorific values (NCV i,y ), because in compliance 

with version 2.2.1 of the Emission Tool/92/. Therefore, JCI judges the revised calculation is 

conservative for the Baseline Emission. CL-21 is closed. 

(b) Baseline emission: BE y 

22




According to the applied methodology /91/ and based on the above steps, the baseline emission 

BE y is calculated as follows: 

BE y = EG PJ,y × EF grid,CM,y 

Where: 

BE y = Baseline emissions in year y (tCO 2 /yr) 

EG PJ,y = Quantity of net electricity generation that is produced and fed into the grid as a 

result of the implementation of the CDM project activity in year y (MWh/yr) 

EF grid,CM,y = Combined margin CO2 emission factor for grid connected power generation in 

year y (tCO 2 /MWh). 

The quantity of net electricity generation that is produced and fed into the grid as a result of the 

implementation of the CDM project activity in year y is measured as EG facility,y which will be used 

as the base for emission reductions calculation. So the baseline emissions are calculated as: 

BE y = EG PJ,y × EF grid,CM,y 

= EG facility,y ×EF grid,CM,y 

= 75,205 × 0. 5558 

= 41,798 tCO 2 e/year 

On the other hand, JCI has not raised any CAR and CL to assess the baseline identification of the 


JCI confirms the above calculation procedure and the parameters are consistent with PDD for 

RFR/2/ and the electricity supplied to the power grid company is calculated appropriately. 

5.4.3. Project emissions : PEy 

As the proposed project activity involves 20 MW new hydropower plant and a 2,500,000 m 2 new 

reservoir , thus A BL = 0 and Cap BL = 0. 

The power density (PD) of the project plant is calculated such as: 

PD = (Cap PJ - Cap BL )/(A PJ - A BL ) = (20,000,000 - 0)/(2,500,000 - 0) = 8.0 W/m 2 

Where: 

- Cap PJ = Installed capacity (Wh) 

- Cap BL = Installed capacity before implementation (W/h) 

- A PJ = Area of the reservoir (m 2 ) 

- A BL = Area of the reservoir before implementation (m 2 ) 

As the power density of the project plant is greater than 4 W/m 2 and less than 10 W/m 2 . According to 

ACM0002 Version 12.2.0, the project emission of water reservoir is calculated such as: 

PEy = PE HP y = (EF Res × TEGy)/1000 = (90 × 76,350)/1000 = 6,871.5 tCO2/y < 6,872 tCO2/y 

Where: 

- EF Res = 90 kgCO2e/MWh: Default emission factor for emissions from reservoirs 

- TEGy = 76,350 MWh/y: Annual grossl electricity produced by the project activity. 

JCI confirms that the PDD for RFR/2/ appropriately interpreted the subject and assumed it to be 

6,872 tCO2/y (PEy). 

5.4.4. Leakage : Ly 

JCI confirms that the PDD for RFR/2/ estimated no leakage associated with the proposed project 

activity appropriately based on the methodology/91/, which requires to consider leakage emissions 

only when equipment transfer is involved. 

5.4.5. Emission reductions : ERy 

The total emission reduction is calculated as following equation. 

ERy = BEy – PEy –Ly 

= 41,798 – 6,872 – 0 

= 34,926 tCO2e/y 

23




Therefore, JCI confirms the algorithms and/or formulae used to determinenemission reduction are 

comply with the requirements of the selected baseline and monitoring methodology. 

As a result of above assessment of "5. Baseline and monitoring methodology", JCI ensures that the 

baseline and monitoring methodologies selected by the project participants comply with the 

methodology of ACM0002/91/, and also ensures that the project activity meets the general requirement, 

such as; 

- The selected methodology is applicable to the project activity; 

- The PP has correctly applied the selected methodology. 

Furthermore, JCI ensures that the selected methodology applies to the project activity and has been 

correctly applied with respect to Project boundary, Baseline identification, Algorithms and/or formulae 

used to determine emission reductions, Additionality and Monitoring methodology. 

6. Additionality of project activity 

According to paragraph 95 through 97 of CDM VVM/98/, JCI assesses the additionality of the 

proposed project activity with the following steps; 

- Prior consideration of CDM 

- Identification of alternative 

- Investment analysis 

- Barrier analysis 

- Common practice analysis 

These steps are complied with following Manual and Guidelines; 

1) CDM VVM/98/ 

2) Tool for the Demonstration and Assessment of Additionality/92/. 

3) Guidelines on the Demonstration on the Assessment of Prior Consideration of the CDM/96/. 

6.1 Prior consideration of CDM 

According to paragraph 98 of CDM VVM/98/, JCI assesses the prior consideration of the proposed 

project by following steps; 

- Start date of Project activity 

- Prior consideration of CDM 

- Activities/events to achieve CDM registration 

6.1.1 Start date of project activity 

JCI assesses the start date of the proposed project complied with the“Glossary of CDM terms”/97/ 

and confirms the date of contract for civil construction works on 16 September 2010/17/ is the earliest 

date of major contracts by document review of the contracts. 

According with paragraph 100 of CDM VVM/98/, the proposed project is a ”new project activity”, 

because the start date of the proposed project has been started after 02 August 2008. JCI assesses both 

Notifications of CDM status and confirms they are appropriately informed to DNA of Viet Nam/72/ 

on 29 December 2010 and UNFCCC/73/ on 29 December 2010. Both notifications are informed and 

accepted within 6 months after the project start date. 

Therefore, the start date of the proposed project is appropriate. 

6.1.2 Prior consideration of CDM 

The relevant evidences of the proposed project implementation are provided to JCI as shown in the 

below Table 7. 

24




Table 7 Project implementation schedule for the proposed project 

Time Project Implementation Evidence 

May 2008 Feasibility Study report (FSR) - 

May 2008 Environmental Impact Assessment (EIA) Report /5/ 

19/06/2008 Approval Letter for EIA /7/ 

27/05/2009 Approval Letter for FSR /8/ 

17/06/2009 Issuing Investment License (Approval Letter) /9/,/10/ 

04/11/2009 Stakeholders meeting at Hung Viet communes /68A/,/69A/,/70A/ 

04/11/2009 Stakeholders meeting at Bac La communes /68B/,/69B/,/70B/ 

05/11/2009 Stakeholders meeting at Hong Phong commune /68C/,/69C/,/70C/ 

15/03/2010 Contract with CDM Consultant /16/ 

March 2010 Feasibility Study Amendment report (FSAR) /4/ 

19/04/2010 Board meeting for CDM investment decision /67/ 

16/09/2010 

Contract for civil engineering (start date of the project and 

before the contract for equipment purchasing) 

/17/ 

02/05/2011 Verification Study for FSAR /4B/ 

06/05/2011 Review statement for FSAR /8B/ 

19/07/2011 Contract for equipments purchasing /18/ 

JCI reviews all the project implementation listed in the above Table 7 with relevant evidence 

provided by the project participant. The timeline summarizes how the project participant made prior 

consideration of CDM step by step such as; 

- After the approval of FSR/8/ on 27 May 2009, Feasibility Study Amendment Report (FSAR)/4/ 

has been made on March 2010/4/. While FSR has been approved for investment license by the 

national authority/8/, FSAR/4/ has been adjusted the cost estimation and IRR calculation by 

independent consultants/4B/ accredited by the government/8/. The IRR calculation based on 

Review statement for FSAR/8/ is shown the necessity of CDM incentive to implement the 

proposed project because of the lower IRR/3/. 

- The project participant has resolved CDM investment decision/67/ on 19 April 2010. It is less 

than two months of a gap between the FSAR/4/ and the Board meeting for CDM investment 

decision/67/. 

- Also after five month of the board resolution, the contract date of civil construction works is 

signed on 16 September 2010/17/, which is the earliest date for the construction starting of the 

proposed project. 

25




JCI confirms that the period of time between the finalization of the FSAR/4/ and the investment 

decision is sufficiently short. Therefore, JCI concludes the prior consideration of the proposed project 

is appropriately by the relevant evidences. 

6.1.3 Activities/events to achieve CDM registration 

The timeline of major activity relevant to the proposed project implementation and serious 

consideration of CDM are tabulated below, according to the Guidelines on the Demonstration and 

Assessment of Prior Consideration of the CDM/95/. 

Although the table of timeline in the PDD for GSP/1/ was covered some key activities/events, JCI 

raised the findings of CL-11 to assess more details of timeline of the proposed project and to submit 

the relevant evidences. 

- CL-11: It is requested to demonstrate for “continuing and real actions were taken to secure 

CDM status”. 

As shown in the timeline of Table 8, the project implementations have taken by the project participant 

after the project start date are confirmed by JCI with relevant evidences provided by the project 

participant as well as through published information, and also through interviews to the project 

participant and relevant authorities during the on-site meetings. 

Table 8. Timeline of milestones of key activities/events to achieve CDM 

Time Project Implementation Evidence 

16/09/2010 Contract for civil engineering (start date of the project) /17/ 

29/12/2010 Notification of the CDM for the Host country (Prior Consideration) /72/ 

29/12/2010 Notification of the CDM for UNFCCC (Prior Consideration) /73/ 

19/07/2011 

Contract for equipments purchasing (after the contract for civil 

engineering) 

/18/ 

21/07/2011 Emission Reduction Purchase Agreement (ERPA) /13/ 

17/08/2011 Commencement of PDD for GSP /1/ 

22/03/2012 Viet Nam LoA /6A/ 

14/05/2012 Sweden LoA /6B/ 

After the proposed project has started on 16 September 2010/17/, the project participant has taken a 

series of actions to pursue CDM. 

Although the proposed project has no needs to assess the demonstration for continuing and real 

actions of the CDM, because the starting date is after 02 August 2008/96/, JCI confirms all the above 

key milestones with relevant evidence provided by the project participant are fully appropriate. CL- 

11 is resolved and closed. 

6.1.4 Notification of CDM status 

JCI confirms by means of confirmation from the UNFCCC secretariat that PPs had informed the 

host Party DNA/72/ and the UNFCCC secretariat/73/ in writing of the commencement of the project 

activity and of their intention to seek CDM status, and confirms both notifications has been 

submitted within 6 months after the project start date. 

26




As a result, according to the above reviews on “6.1 Prior consideration of CDM”, JCI concludes that 

the prior consideration and continuing and real actions of the proposed project iswell demonstrated by 

the relevant evidences complying with the relevant guidelines/96/. 

6.2 Identification of alternative 

According to paragraph 105 of CDM VVM/98/, JCI concludes that as described in the above 

assessment on “5.3 Baseline identification”, the PDD for RFR/2/ of the proposed project activity is 

identified credible alternatives to the project activity in order to determine the most realistic baseline 

scenario, unless the approved methodology that is selected by the proposed project activity. 

6.3 Investment analysis 

According to paragraph 108 through 111 of CDM VVM/98/, JCI assesses the investment analysis of the 

proposed project by following steps; 

- Benchmark Analysis 

- Sensitivity analysis 

- Barrier analysis 

- Common practice analysis 

6.3.1 Benchmark analysis 

According to paragraph 112 and 113 of CDM VVM/98/, JCI assesses the Benchmark analysis of the 

proposed project activity. The PDD for RFR/2/ selected the benchmark analysis method for investment 

analysis with the following justifications: 

1) Application of benchmark analysis and benchmark IRR 

JCI assesses whether the type of benchmark applied is suitable for the type of financial indicator. The 

PDD for RFR/2/ applies benchmark analysis and April at the date of making the investment decision as 

the benchmark IRR for the analysis, which are validated reasonable and appropriate as below: 

Option I: not selected as the project activity aims to obtain revenue from electricity sale, in 

addition to expected revenue from CERs 

Option II: not selected as the identified baseline scenario is not considered an investment project. 

Option III: selected as an official benchmark IRR derived from the Interim Rule is available. 

Therefore only Option III of benchmark analysis, therefore can be applied to the project activity and 

fully complied with the paragraph 112(a) of the CDM VVM /98/. 

On the other hand, JCI assesses risk premiums applied in determining the benchmark reflects the risks 

associated with the project type or activity. The PDD for RFR/2/ selects 13.65 % at the date of making 

the investment decision as a benchmark of project IRR after tax for investment analysis. The value is 

sourced from the weekly reports of medium and long terms lending rate for Group of state commercial 

banks which is published by the State Bank of Vietnam 2 /53/ and widely used in Viet Nam for the 

financial evaluation of hydropower projects. The usage of the local lending rates or weighted average 

costs of capital (WACC) are complied with the Guideline on the Assessment of Investment Analysis 

(Version 05)/95/, as an appropriate benchmarks for a project IRR. JCI reviews the baseline scenario of 

the PDD for RFR/2/, and cross-checked the weekly report on Banking Activities for Group of state 

commercial banks/75/ (From 08 January through 15 April 2010), which is slightly before the Board 

meeting for CDM investment decision (19 April 2010)/67/. Although the long time lending rate of the 

State Bank of Viet Nam is waved continuously, JCI confirms eleven (11) weeks average lending rates 

of medium and long terms/75/ is 12.95 % of lower value and 14.92 %of higher value from 08 January 

through 15 April 2010. Therefore, 13.65 % of the benchmark for the investment decision of the 

proposed project is conservative and applicable. 

2 State Bank of Vietnam official website; http://www.sbv.gov.vn/ 

27




Additionally, JCI assesses whether it is reasonable to assume that no investment would be made at a 

rate of return lower than the benchmark by assessing previous investment decisions. There are no 

references of the application of the benchmark analysis to other projects by the project owner, since the 

proposed project is the first project for the project owner to invest in the hydropower station. The IRR 

is calculated to be10.28 % without CERs revenue. It is concluded that the project activity is not 

financially attractive, of which processes are validated with below steps. Therefore, JCI ensures 

investment decision of the benchmark is fully complied with the Add Tool/93/ and the paragraph 

112(c) of the CDM VVM /98/. 

2) Validation of input values used for the IRR calculation 

JCI assesses reliability of the input values used for the IRR calculation. 

As the demonstration on the above assessment, 6.1.2 “Prior consideration of CDM”, the project 

participant decided on the implementation of the proposed project activity with CDM application dated 

19 April 2010/67/. The decision was triggered with the suggestion of CDM application in the FSAR/4/. 

JCI confirms that these arguments clearly demonstrated forthe decision by the project participant to 

proceed the project activity with the provision of CDM application. JCI also confirms the period of 

time between the finalization of FSAR/4/ and the Investment Decision/67/ is sufficiently short, as the 

period is less than 2 months. JCI, thus, judges that it is unlikely the input values would have materially 

changed in the context of the project activity and it is complied with the paragraph 113(a) of the CDM 

VVM/98/. Input values of the major parameters used for the IRR calculations in the PDD for RFR/2/ 

are tabulated as Table 9. 

Table 9. Comparison of input values used for investment analysis between FSAR and PDD 

PDD for 

Parameters Unit FSAR/4/ RFR/2/ Consistency 

& IRR/3/ 

Installed capacity MW 20 20 OK 

Gross electricity generation MWh/y 76,350 76,350 OK 

Net electricity supplied to the 

grid 

MWh/y 75,205 75,205 OK 

Total static investment cost Million VND 432,791 432,791 OK 

Equity/loan rate - 30:70 30:70 OK 

Annual O&M cost 

Million 

VND/year 

28 

6,089 6,089 OK 

Depreciation period *1) Year 30 30 OK 

Residual value 1) billion VND 0 0 OK 

Electricity price VND/kWh 777.64 777.64 OK 

Resources tax % 2 2 OK 

Plant load factor (PLF) % 43.58 43.58 OK 

Total of loss load *2) % 1.5 1.5 OK 

Loan interest rate *1) % 13.65 13.65 OK 

Note *1: These input values are reported on IRR spreadsheet/3/. 

Note *2: The input values are referred from the Protocol (Annex 2 of this report). 

According to the Table 9, JCI confirms the input values of IRR are fully consistent with FSAR/4/ 

and it is fully complied with the paragraph 113(b) of CDM VVM/98/. 

JCI assesses the each input values of IRR such as, net electricity supplied to grid (technical 

parameters), equity/loan rate, electricity tariff, residual value and tax rates. On the other hand, the




appropriateness of the loan interest rate is already demonstrated above section, “1) Application of 

benchmark analysis and benchmark IRR” and it is applicable. 

a) Technical parameters 

JCI has raised the finding of CL-4 and -8 to assess the appropriateness of the Plant Load factor 

(PLF) and the annual net electricity supplied to the grid (EG facility,y ) in the PDD for RFR/2/. 

PP demonstrated such as; 

PLF = annual operation hours / (365 × 24) = 43.58 % 

EG facility,y = Installed capacity (MW) × 8,760 (h/y) × PLF × (1 - Total of loss load rate) 

= 20 × 8,760 h/y × 0.4358 × (1 – 0.015) = 75,205 MWh/y 

On the other hand, JCI assesses the appropriateness of EG facility,y by the following parameters 

authorized by the People’s Committee of Lang Son Province/8/. 

- Installed capacity : 20 MW 

- Annual operation hours: 3,818 h/y 

JCI also assesses the 1.5 % of loss load estimated in a conservative manner based on National 

codes and regulations such as ”Decision No 30/2006/QD-BCN” 3 /30/ and ”Decree No.45/2001/ND- 

CP” 4 /32/. Thus, JCI judges the 1.5 % of the total of loss load of the proposed project activity is 

applicable. 

Therefore, the technical parameters of the proposed project are appropriate. 

b) Equity/loan rate 

JCI assesses the appropriateness of equity/loan rate and confirms the rate is fully consistent with 

FSAR/4/. Furthermore, the rate is fully complied with National codes and regulations such as ” 

Decision No. 2014/2007/QD – BCN 5 /33B/”. 

Therefore, the equity/loan rate of the proposed project is appropriate 

c) Electricity price (electricity tariff) 

According to the IRR/3/ and PDD for RFR/2/, electricity tariff is 777.64 VND/kW. JCI judges the 

tariff is fully consistent with the National codes and regulations such as ”Decision No. 

18/2008/QD-BTC” 6 /33C/ and ”Decision No. 73/QD-DTDL” 7 /33A/ and ”Decision 

No.2014/2007/QD-BCN” /33B/. 

Therefore, the electricity tariff of the proposed project is appropriate 

d) Residual value 

According to the Guidelines on the assessment of investment analysis/95/, if the capital 

expenditure has not been fully devalued, this should be reflected as a cash inflow to the final year 

of the assessment period. JCI confirms the depreciation period of the proposed project is 30 years 

which is consist with the financial period. JCI identifies the regulation on financial project lifetime 

in Viet Nam, "Decision No.2014/2007/QD-BCN"/33B/. 

Therefore, zero (0) billion VND of the residual value is appropriate 

3 ”Decision No 30/2006/QD-BCN”; is regulation on managing, investing and constructing the Independent Power Projects issued 

by the government on 31/08/2006. 

4 ”Decree No.45/2001/ND-CP” is regulation on Electricity Activities and Electricity Utilization issued by the government on 

02/08/2001. 

5 Decision No.2014/2007/QD/BCN” is regulation on electricity tariff issued by Ministry of Industry and Trade dated 13/06/2007, 

included temporary guideline for conducting the economic, financial and investment analysis and providing the purchasingselling 

price framework. 

6 ”Decision No. 18/2008/QD-BTC”; is regulation on Promulgating the Regulation on Avoided Cost Tariff and Standardised 

Power Purchase for small renewable energy power plant issued by the government dated 17/08/2008. 

7 ”Decision No. 73/QD-DTDL”; is regulation on Promulgation on Avoided Cost Tariff for 2010 issued by the government dated 

30/12/2009 included temporary guideline for conducting the economic, financial and investment analysis and providing the 

purchasing-selling price framework. 

29




e) Resources tax rate 

JCI assesses the appropriateness of 2 % of resource tax and confirms the tax rate is fully consistent 

with FSAR/4/ and fully complied with National codes and regulations such as ”Circular No 

45/2009/TT-BTC” 8 /36A/, "Circular No 124/2009/TT-BTC/35A/ and ”Decision No. 588/QD- 

BTC”/34/ .Therefore, the tax rate of the proposed project is appropriate. 

Therefore, the tax rates of the proposed project are appropriate. CL-14 is closed. 

As a result, JCI judges that the input values used for the IRR calculation are appropriate and fully 

complied with the paragraph 113(c) of CDM VVM/98/. On the other hand, O&M cost, which is one 

of the input parameter of IRR, is assessed in the following section, ”3) Cross-check for of major 

financial parameters”. 

3) Cross-check of major financial parameters 

JCI assesses input values of major financial parameters used for the IRR calculation, such as a) 

Operation hour, b) Ratio of total static investment cost/ installed capacity (Investment index), c) Ratio 

of O&M costs / total investment costs, d) Electricity tariff and e) Net supplied electricity to grid as 

below Table 10. The references for cross-check are selected by the following criteria: 

1) Region: Viet Nam 

2) Project: Registered CDM hydropower projects as of 01 May2012 

3) Installed capacity: 10 MW thorough 30 MW (20 MW +/-50%) 

Registered. 

No. 

Table 10. Comparison with other CDM hydropower projects in Viet Nam 

Installed 

capacity 

Operation 

hour 

Investment 

index *1 

O&M costs 

ratio *2 

Tariff 

(excluded 

tax) 

Electricity 

supplied to 

grid 

MW h/y 

M VND 

/MW 

% VND/kWh MWh/y 

2878 15.6 5,018 20,060 1.3 608.0 77,520 

2971 20.0 4,073 19,761 1.2 604.0 80,636 

2978 18.0 4,205 18,175 0.5 602.0 74,265 

3051 19.5 4,034 19,795 1.2 603.0 77,883 

4259 19.5 3,913 18,713 1.3 608.0 75,547 

3396 18.0 4,150 20,325 1.0 680.4 73,216 

3532 19.5 3,252 19,221 1.0 607.0 62,786 

4236 18.0 4,193 17,239 1.5 590.0 74,715 

3954 18.0 4,076 17,524 1.0 656.0 71,903 

3389 24.0 3,907 22,492 1.0 733.0 91,816 

4338 18.0 4,394 23,977 0.8 675.3 77,508 

4550 15.6 4,429 18,506 1.0 599.0 68,409 

4703 28.0 3,675 22,193 1.0 614.0 101,871 

4577 18.6 4,113 10,253 1.5 599.0 75,735 

4544 20.0 3,801 20,540 1.0 606.0 75,250 

4210 18.0 3,241 19,631 1.0 761.4 57,624 

5164 16.0 - *3 21,213 1.0 666.0 62,389 

5056 18.0 3,840 21,807 1.5 800.0 69,120 

8 ”Circular No 45/2009/TT-BTC”; is Circular on guiding VAT, royalties and business income tax for hydropower generation 

establishments issued by Ministry of Finance on 11/03/2009 

30




3530 14.0 3,509 17,154 1.0 656.0 49,090 

3667 15.0 3,793 24,794 1.0 680.0 56,331 

3421 12.0 3,974 24,900 1.0 814.1 46,736 

3944 14.6 4,011 21,001 1.0 750.0 58,101 

5533 27.0 3,896 24,848 1.0 769.0 104,128 

5727 29.0 4,156 21,876 1.0 784.9 118,712 

5189 16.0 3,760 21,178 1.5 718.0 59,258 

4991 22.5 4,522 16,422 1.5 590.0 101,396 

5573 30.0 4,110 23,186 0.7 720.4 122,057 

Max. 30.0.0 5,018 24,900 1.5 714.1 122,057 

Min. 12.0 3,241 10253 0.5 590.0 46,736 

Ave. 19.3 4,003 *3 20,251 1.1 668.9 *3 76,445 

Proposed 

project 

20.0 3,818 21,640 1.5 777.6 75,205 

Note *1: Investment index (M VND/kW) is calculated by the Total static investment cost (Million 

VND/Installed capacity (MW). 

Note *2: O&M costs ratio (%) is calculated by the O&M costs/Total static investment costs. 

Note:3: The average are calculated by 27 registered projects. 

a) Investment Index 

As indicated above Table, the investment index (VND/kW) of the proposed project is 21,640 

VND/kW. It is slightly higher than the average of the other 28 CDM projects (20,251 VND/kW or 

6.4 % lower than the proposed project), but the IRR calculation does not reach to the benchmark of 

the proposed project. Therefore, the assumed total static investment cost of the proposed project is 

appropriately estimated in a conservative manner. 

b) O&M costs ratio 

The ratio of O&M costs/Total static investment costs of the proposed project is 1.5 % and it is 

same with the maximum. When JCI raised CL-15 for clarifying the appropriateness of the ratio,the 

project participant demonstrated the appropriateness of the ratio by the regulation (Decision No. 

2014/2007/QD-BCN)/49/, based on the Promulgation of Temporary Regulation on Contents of 

Investment Financial-Economic Analyses and Price Frame for Power Generation Projects. The 

Decision regulates hydropower projects below 30 MW shall be applied O&M cost from 1% to 2% 

of total investment cost. Furthermore, no regulation requires to breakdown the O&M cost in detail 

in Viet Nam. Therefore, 1.5 % of O&M costs ratio is appropriately estimated. CL-15 is resolved 

and closed. 

c) Operation hour (h/y) 

The annual operation hour of the proposed project (3,818 h/y) is lower than the average of other 

CDM registered project (4,003 h/y). On the other hand, the maximum of 27 projects is 5,018 h/y 

and minimum of it is 3,241 h/y. JCI raised CL-7 and confirmed hydrologic data of the proposed 

project by FSAR/4/. JCI judges the annual operation hour of the proposed project is estimated 

based on long-term river hydrologic data (1960 – 2008). The annual power generation of the 

project has been compiled by a qualified organization and approved by local governmental 

authority/8/. Therefore, the value of electricity output is scientific and reliable. The oepration hour 

of the proposed project is appropriately estimated. 

31




d) Electricity price (electricity tariff) 

In Viet Nam, the elelectricity tariff is calculated based on the Avoided Cost Tariff according to the 

Government Decision No.18/2008/QD-BTC/33C/ by Ministry of Industry and Trade on 18 July 

2008 and Government Decision No.73/QD-DTDL/33A/ dated 30/12/2009. These are published by 

Ministry of Industry and Trade (MIT) which is the electricity regulatory authority of Vietnam. 

MIT announced the Avoided Cost Tariff for the year 2010 which are available at the time of 

making investment decision. 

The electricity tariff of the proposed project is 777.64 VND/kWh which is excluded VAT, and the 

tariff is within the electricity tariff range (461 VND/kW through 923 VND/kW) which is regulated 

in the Decision No.2014/2007/QD-BCN by Ministry of Industry and Trade/33B/ on 13 June 2007. 

In addition, the tariff of 777.64 VND/kWh is within the range from 590 to 814.1 VND/kW applied 

to recently registered hydropwer projects in Vietnam. JCI, thus, has concluded that the tariff of 

777.64 VND/kWh is appropriately estimated. 

As a result of above assessment of ”6.3.1 Investment analysis”, selected the benchmark analysis 

method for investment analysis of the proposed project is fully complied with Add Tool/93/, the 

paragraph 112 and 113 of the CDM VVM/98/, and the Relevant Guidelines//95/. 

6.3.2 Sensitivity analysis 

According to paragraph 111(e) of the CDM VVM/98/, JCI assesses sensitive analysis of the proposed 

project activity, which means to verify the accuracy of financial calculations carried out for the 

investment analysis. The sensitivity analysis is validated with the following two steps: 

- Assessment of +/-10 % variation analysis and 

- Assessment of likelihood of variations to reach the benchmark IRR complying. 

1) Assessment of +/-10 % variation analysis 

+/-10 % variation analysis is conducted using the following four parameters. 

- Static investment 

- Annual O&M cost 

- Electricity price (electricity tariff) 

- Annual electricity supplied to the grid 

The PDD for RFR/2/ shows the result of the analysis that IRRs do not exceed 10 % of the 

benchmark when any of those four parameters varies within the +/-10 % range. 

JCI considers that the range of the +/-10 % variation is appropriate due to the following reasons: 

- It is unlikely that only the electricity tariff fluctuates by over 10%. Because the price is strictly 

controlled by the central and local government as an important price policy to avoid its negative 

impacts on overall economical development in the country. 

- The electricity supplied to the grid depends on the variation of plant load factor. Maximum 

power generation is limited, and plant load factor would not be supposed over 10 % considering 

the actual data in FSAR/4/. 

2) Assessment of likelihood of variation to reach the benchmark IRR 

JCI conducts to check the likelihood of the four parameters at the time when the IRR is equal to 

benchmark. The critical variations at benchmark 13.65 % at the time the investment decision (19 

April 2010) are as follows: 

- Total static investment: -24.05 % 

- Annual O&M cost: little impact (less than -100% calculated by JCI) 

- Electricity tariff: 27.51%, 

- Annual Electricity supplied to the grid: 28.28 % 

32




JCI confirms the results are appropriate and their likelihood is analyzed below. 

a) Total static investment: -24.05 % 

It is unlikely that the total static investment cost would be lowered by 24.05 % (or the change 

from 432.791 million VND to 328.695 million VND). JCI raised CL-12 for clarify the 

comparison of total investment cost between the designed base and expected actual cost. Table 11 

shows the comparison among the Desigend base/4/ and expected actual cost of the total static 

investment cost. 

Table 11 Comparison of Total investment cost 

Designed base/4/ Expected actual cost 

million VND 

million VND 

Total static investment cost 432,791.063 537,836.51 

- Civil construction cost 229,448.852 304,490.10 

- Equipment cost 147,644.706 183,257.03 

- Consultancy cost 15,674.166 17,962.10 

- Management cost 5,274.257 6,476.51 

- Compensation and migration fee 8.500 8.500 

- Contingency 20,609.098 10,379.15 

- Others 5,639.984 6,771.62 

Note: For comparing conservatively, both the design-based cost and expected actual cost used are values 

pre- tax. 

The design-based cost is based on FSAR/4/ and the expected actual cost means final expenditures 

until completion. Acording to the above table, the actual cost is 15.1 % higher than the designed 

base/4/ while the detail content of actual cost are almost similar with the designed base. On the 

other hand, JCI confirms the Vietnam’s consumer price index (CPI) in December 2010/55/ is 

increased to 11.75 percent 9 , in accordance with the announcement of General Statistics Office 

(GSO). The Inflation trend is identified by the information provided by World Economic Outlook 

Database/54/. Therefore, the prices of construction materials and labor force in Viet Nam are 

deemed to increase in recent years. 

Therefore, JCI judges the total static investment cost would not be lowered by 24.05% either at 

the time of the project decision or during the construction period. CL-12 is resolved and closed. 

b) Annual O&M cost: little impact 

Moreover annual O&M cost needs to lower by -100 % , and it is impossible. If the annual O&M 

cost decreased to zero, the IRR does not reach to critical variations at the benchmark 13.65 %. 

c) Electricity price: 27.51 % 

If the electricity price would be 28.28 % up from 777.64 VND/kWh, the rate should be increased 

to 991.57 VND/kWh. However, the prices in Viet Nam have been regulated by the government at 

lower levels to minimize its negative impact on the development of national and local 

economy/33A/ 10 . 

Therefore JCI judges that it is also unlikely that the price would increase by 27.51 % or to 991.57 

VND/kW. Although JCI raised CL-13 for clarify the regulation and appropriateness, CL-13 is 

resolved and closed. 

9 Country’s CPI rises 11.75 percent in 2010; Viet News (24 December 2010) http://www.dztimes.net/post/business/country-s-cpirises-11-75-percent-in-2010.aspx 

10 Promulgation on Avoided Cost Tariff for 2010 included temporary guideline for conducting the economic, financial and 

investment analysis and providing the purchasing-selling price framework (Decision No. 73/QD-DTDL) issued by Ministry 

of Industry and Trade on 30/12/2009 

33




d) Annual Electricity supplied to the grid: 28.28% 

To increase the net increased electricity, it needs to increase the power generation and the 

operation hours from 3,818 h/y to 4,897 h/y. Higher generation and operation hours are possible 

for short years but it is hard to consider higher generation and operation hours continuously for 

30 years as stated in the above. 

As the results of above assessments on "6.3 Investment analysis", JCI concludes the investment 

analysis is appropriately described and confirms the underlying assumptions are appropriate and the 

financial calculations are correct in accordance with the paragrapf 114 of the CDM VVM/98/. 

6.4 Barrier analysis 

Based on the above arguments, it is concluded that the proposed CDM project activity is unlikely to be 

financially attractive. The Barrier Analysis, therefore, has been skipped according to the “Add Tool 

(Version 06.0.0)/93/ and the paragraph 115 through 118 of the CDM VVM/98/. 

6.5 Common practice analysis 

According to the “Add Tool (Version 06.0.0)/93/ and the paragraph 119 through 121 of the CDM 

VVM/98/, common practice analysis has been validated with below four (4) steps: 

- Step 1: Installed capacity, 

- Step 2: Location 

- Step 3: Different technologies 

- Step 4: Calculation of factor; F 

1) Step 1: Installed capacity: 20 MW +/-50% 

The PDD for RFR/2/ specifies the criteria for the installed capacity of similar activities to be larger 

than 10 MW and less than 30 MW since the output of the project is 20 MW. On the other hand, small 

scale activiity is defined as ”Different technology”. This criterion is assessed reasonable and comply 

with the context of Add Tool/93/. 

2) Step 2: Location: Viet Nam 

According to the Add Tool (Version 06.0.0)/93/ that “Projects are considered similar if they are in 

the same country”, the project participantis selected whole country which is Viet Nam in PDD for 

RFR/2/. InViet Nam, electricity tariff, project site conditions and investment circumstances are 

unified by national code and regulations such as ”Code No. TCXDVN 285/2002”/38/ and ”Decision 

No. 176/2004/QD-TTg”/28/. Therefore, JCI assesses the application of the criterion located in Viet 

Nam is reasonable and appropriate. CL-18 and CL-19 are closed. 

3) Step 3: Different technologies 

According to the list of power plants published by the DNA of Viet Nam/42/, there are three (3) 

hydropower projects considered to be suited with the requirements of the common practice analysis. 

- Nam Mu/44/ (state-owned company and financed by the state budget) 

- EaKrong Rou/45/(state-owned company and received Official Development Assistance 

(ODA) loan from India) 

- Suoi Sap/51/(ODA loan from India) 

Although project participant listed three (3) projects in PDD for RFR/2/ as considered with similar 

projects, JCI assesses Nam Mu/44/ is state-owned company and financed by the state budget. As 

EaKrong Rou /45/ and Suoi Sap/51/ have received ODA loan from India, these projectare also 

excluded from the common practice. As a result, JCI confirms there are three (3) similar projects 

34




and three (3) different technologies projects. These projects have started commercial operation 

before the start date of the project. 

Therefore, N all is three (3) and N diff is also three (3). CL-20 is closed. 

Where; 

N all : In the applicable geographical area, the same output or capacity, within the applicable output 

range calculated in Step 1, as the proposed project activity and have started commercial 

operation before the start date of the project. 

N diff : Within plants identified in Step 2, technologies different that the technology applied in the 

proposed project activity. 

4) Step 4: Calculation of factor; F 

According to the para 44, Annex 21, EB 65, Calculate factor F = 1 - N diff /N all representing the share 

of plants using technology similar to the technology used in the proposed project activity in all plants 

that deliver the same output or capacity as the proposed project activity. 

The proposed project activity is common practice within a sector in the applicable geographical area 

if the factor F is greater than 0.2 and N all - N diff is greater than 3. 

JCI assesses the factor of the proposed project such as, 

F = 1 - N diff /N all = 1- 3/3 = 0 (Less than 0.2) 

N all - N diff = 3 - 3 = 0 (Less than 3) 

Thus, JCI concludes the proposed project is not a common practice. 

6.6 Conclusion of the assessment of additionality 

JCI concludes that the PDD for RFR/2/ clearly demonstrates as shown in the above that the project 

activity is additional, not financially attractive and therefore, would not occur without CDM revenue 

provision. Serious consideration of CDM prior to the project start by the project participant is clearly 

and sufficiently demonstrated complying with the Relevant Guidelines and appropriate actions were 

taken. The investment and sensitivity analyses both clearly demonstrate the project activity is not 

financially viable without CDM revenue. The analysis revealed that the project activity is not a common 

practice. 

7. Monitoring plan 

According to the paragraph 123 through 124 of the CDM VVM/98/, JCI assesses the monitoring plan of 

the proposed project activity with the following steps; 

- Compliance of the monitoring plan 

- Implementation of the plan 

JCI raised the finding of CL-22 through CL-25 to confirm and validate the monitoring plan in the PDD 

for RFR/2/. 

- CL-22: It is requested to provide some evidence for accuracy of monitoring meter. The Circular 

on regulating meter system/37C/ has been provided andclarified the accuracy of the project 

is complied with the reguration. CL-22 is closed. 

- CL-23: It is requested to explain the monitoring system such as connecting point of electricity 

single diagram. The monitoring flow scheme and management plan are well reported in the 

Annex 4 of the PDD for RFR/2/. CL-23 is closed. 

- CL-24: It is requested to provide provide the single line diagram with monitoring points. The 

35




diagram with monitoring point was under the negotiation process with EVN. CL-24 is 

transferred to FAR-2. 

- CL-25: It is requested to provide Training manual and CDM monitoring manual. The Training 

manual and CDM monitoring manual will be available before operating the plant and at the 

first verification.. CL-25 is closed. 

JCI assesses 1) Compliance of the monitoring plan and 2) Implementation of the plan of the monitoring 

plan as follows: 

1) Compliance of the monitoring plan 

The PDD for RFR/2/, in section B.7.1.Data and parameters monitored, specifies to monitor the 

following six (6) parameter ex-post: 

• Electricity exportd by the proposed hydropower plant to the national grid (EG export, y ) 

• Electricity imported by the local grid to the plant (EG import, y ) 

• Net electricity supplied by the proposed hydropower plant to the national grid (EG facility,y ) 

This value of EG facility, y is calculated by EG export,y - EG import, y . 

• Area of the reservoir measured in the surface of the water (A BL ) 

• Installed capacity of the hydro power plant after the implementation of the project activity 

(Cap BL ) 

• Total electricity produced by the project activity, including the electricity supplied to the grid and 

the internal consumptions, in year y (TEGy) 

JCI cross-checks these parameters with the Relevant Methodology/91/, the Tool/92/, and paragraph 

123(a) of the CDM VVM/98/. JCI confirms that these parameters are fully complied with the selected 

methodology; ACM0002/91/. 

2) Implementation of the plan 

The monitoring implementation plan of the proposed project activity is reported in the Annex 4 of the 

PDD for RFR/2/, such as; 

- Technical information for equipment 

- Monitoring organization 

- Monitoring procedure 

- Calibration of metering equipment 

- Data recording and archiving procedures 

- Emergency procedures 

- Training 

a) Technical information for equipment 

In according to the Annex 4 of the PDD for RFR/2/, two (2) bi-directional monitoring meter will be 

installed at the transformer station (as the connecting point) such as main meter and back-up meter. 

The requirement of electricity metering system is regulated by the Ministry of Industry and Trade, 

“Circular No.27/2009/TT-BCT” 11 /37C/. The technical information for equipment in the PDD for 

RFR/2/ is appropriate. 

b) Monitoring organization 

JCI assesses the structure of the monitoring group of the proposed project activity in PDD for 

RFR/2/ and confirms the structure and the responsibilities of the members are fully completed. 

11 ”Circular No.27/2009/TT-BCT” is regulation on electricity metering system issued Ministry of Industry and Trade dated 

25/09/2009 

36




c) Monitoring procedure 

JCI assesses the the steps of monitoring the electricity exported to the grid (EG export,y ) and the 

electricity imported from grid which is consumed by the proposed project (EG import, y ). The net 

electricity supplied to the national grid (EG facility,y ) is calculated by EG export,y - EG import, y . These steps 

are fully applicable and the monitorig process scheme is appropriate. 

d) Calibration of metering equipment 

JCI assesses caliblation regulation in Viet Nam by the Decision ”65/2002/QD-BKHCNMT”/37A/ 

and confirms the demonstration of the caliblation and verification process of the proposed project 

activity are appropriate. 

e) Data recording and archiving procedures 

JCI assesses the data recording and archiving procedures of the proposed project activity and 

confirms the recorded data, the copy of electricity sales/purchase invoices related to the emission 

reduction will be kept in electronic archives for 2 years after the crediting period. The procedure are 

appropriate. 

f) Emergency procedures 

Although JCI confirms emergency event is not covered under the monitoring plan, the case of failure 

in the monitoring equipment is well reported in the PDD for RFR/2/ such as back-up system. 

Therefore, JCI judges the plan is appropriate. 

g) Training 

JCI raised CL-24 and 25 for assessing the training plan included CDM monitoring plan, but PP 

answered the plan has not been prepared because the project has been under construction and the 

specification data of main equipment is not provided yet by manufacturer. Project participant has 

stated it will be available in the first verification.Therefore, CL-24 and 25 are transferred to FAR-2 

and 3. 

As a summary of the above arguments, JCI judges that the monitoring plan described in the PDD for 

RFR/2/ appropriately complied with Relevant Methodology/91/ and the Tool/92/, and also sufficient to 

ensure the achievement of emission reductions by the project activity. 

As a result, JCI concludes the monitoring plan of the proposed project is appropriate. 

8. Sustainable development 

JCI assesses the policy of Viet Nam for national sustainable development and the contributions of the 

proposed project activity. 

In according the “National Development Strategies and Master Plans for Renewable Energy for the 

period up to 2015 with the perspectives up to 2025”/21/, Viet Nam has suffered a critical electricity 

shortage as a consequence of rapidly increasing demand and insufficient supply, thereby imposing 

negative impacts on economic growth as well as on daily lives of people. This project activity will be a 

contribution towards balancing the supply and demand gap. By exporting electricity directly to the 

national grid, it will help to reduce electricity losses across the national grid and to lessen the risks of 

cascading national grid collapse due to overload. 

37




Furthermore, PDD is reported high efficiency turbines, generators and power transmission will be 

installed in the project to ensure low losses. Also JCI judges that DNA of Viet Nam confirms the 

proposed CDM project activity will contribute to the sustainable development of the host Party by the 

LoA/6A/, which is reported in the “Section IV 1. Approval”. 

Therefore, JCI concludes the project will accelerate the deployment of renewable energy technologies 

in Viet Nam. 

9. Local stakeholder consultation 

According to the paragraph 128 through 130 of the CDM VVM/98/, JCI assesses appropriateness of 

the description for local stakeholder consultation in the PDD for RFR/2/ by following document. 

- EIA Report/5/ 

- Approval letter for EIA Report/7/ 

- Minutes of Board Meeting for stakeholders' meeting/69A/,/69B/,/69C/ 

According to the Minutes of Board Meeting/69A/,/69B/,/69C/, the meeting has held on 04 and 05 

November 2009 under attendance of the project participant, local government, local commune, and 

representatives of villagers. 

They have discuss for positive impacts, negative impacts and the solution, and thier opinions. The 

conclusions of meetings/69A/,/69B/,/69C/ are as follows; 

- All participants agree with the policies to build the project with the content started in the 

feasibility study report. 

- The project has positive socio-economic impacts on the region. 

- The project meets all requirements to be developed as the CDM project. 

On the other hand, JCI has interviewed with local stakeholder s at the on-site assessment for the 

activity of the proposed project. 

1) Interview with local government/101/ 

- Population of the County: about 16,000 in Hung Viet commune. 180 people or 44 families in Ban 

Tet village and 93 people or 17 families in Phieng Chuong village 

- Major industry: agriculture. 

- FSR was approved by Department of Industry and Trade (DIT) of Lang Son province/8/ on 

27/05/2009. 

- The electricity tariff is decided by central government by district and season. 

- The project has positive impacts on the region. 

2) Interview with local environmental protection bureau/102/ 

- The EIA approved by provincial environmental protection office; Department of Natural 

Resources and Environment of Lang Son Province (Lang Son DONRE) on 19/06/2008. They 

judged there is a little negative impact to the environment. 

- Submerged area is about 56 ha, forest land. 

- Compensation fee is regulated by central government and is paid by provincial government. 

- DONRE patrols the project site and assesses the environmental affect at least 1 times in year. 

3) Interview with Local commune and residents/103/ 

38




- 2 residents and 2 attended the meeting. One of the resident is chief of commune and another is 

housewife. 

- One of the residents is chief of Ban Tet village, Hung Viet commune whose house was already 

submerged area. Another one is housewife whose house is nearly submerged area. 

- No migration and no farm land. Forest area is submerged. 

- Almost compensation fee has been paid from DONRE. 

- The local residents had been noticed the construction plan of the hydro power station in 2008. 

- All residents have supported the project and have not negative opinion. 

- Merit of construction is become quality of life such as public road and community center 

construction. The residents have gratified the construction because they have no public road in 

this area. 

- Demerit of construction is negligile. Although the river water becomes a little muddy, it will be 

resolved after completion. 

As a result, JCI judges the proposed project has been supported by local residents, and their opinions 

should be considered to construction and operation of the project. 

Therefore, JCI concludes the proposed project is supported by local residents, and the description for 

local stakeholder consultation is appropriately reported in the PDD for RFR/2/. JCI also concludes the 

description is complied with theparagraph of 128 through 130 of the CDM VVM/98/. CL-26 is closed. 

10. Environmental impacts 

According to the paragrapf of 131 through 133 of the CDM VVM/98/, JCI assesses appropriateness 

of the description for the environmental impacts in the PDD for RFR/2/ by following document. 

- EIA Report/5/ 

- Approval letter for EIA Report/7/ 

The negative impacts of the proposed project during the construction and operation are clarified 

inEIA Report/5/. 

JCI confirms EIA report/5/ has been authorized by local government/7/. JCI also confirms the 

environmental impacts of the project has been complied with national codes and regulations such 

as, ”Order No. 52/2005/QH11” 12 /24/, ”Decree No. 80/2006/ND-CP” 13 /30/ and ”Circular 

No.08/2006/TT-BTNMT” 14 /31/. CL-27 through CL-30 are closed. 

On the other hand, JCI has visited the proposed project site for inspection of the environmental 

impacts and interviewed with local stakeholder/101/ through /105/. The project participants have 

testified to undertake the analysis of environmental impacts. JCI has confirmed that appropriateness 

of mitigation measures had been taken as described in the PDD for RFR/2/ and no serious issues are 

discovered. 

As a result, JCI concludes the environmental impacts of the proposed project are controlled at a 

minimum level. 

12 ”Order No. 52-2005/QH11” is law on environmental protection issued by Prime Minister on 29/11/2005. 

13 ”Decree No. 80/2006/ND-CP” is details of regulations and guidance on implementing of Environment Protection Law of 

Vietnam 2005 on 09/08/2006. 

14 ”Circular No.08/2006/TT-BTNMT” is Guiding Assessment of EIA report on 09/08/2006. 

39




11. Result of stakeholder consultation process 

PDD version 01 for GSC/1/ of the project activity has uploaded on UNFCCC website dated 17 

August 2011. 

(https://cdm.unfccc.int/Projects/Validation/DB/THS7H8M1MFWH9WIIOPRJUIYDRGDW4L/view. 

html) 

It has made publicly available and Parties, stakeholders and NGOs are through the CDM website 

invited to provide comments during a 30 days period from “17 August 2011” to “15 September 2011”. 

As a result of consultation, one comment was issued. JCI sent quickly e-mail to the commentator as 

follows; 

Questionnaire; 

- Your name 

- Entity name 

- Position: 

- Relationship with the project participant or project owner: 

However JCI has received no reply from the commentator. Therefore, JCI concludes the comment is 

not authentic. 

40

JCI CDM Center APPENDIX A No : JCI-CDM-VAL-11-041 

Rev.No 

02.1 

CDM Validation Protocol on Thac Xang Hydropower Project 

APPENDIX A: CDM VALIDATION PROTOCOL 

(VVM Validation Protocol Template Version 06) 

Thac Xang Hydropower Project 

1. INTRODUCTION 

This document is prepared as the Validation Protocol on Thac Xang Hydropower Project 

The validation protocol is prepared for the following purposes: 

To ensure that, in accordance with the Validation Verification Manual version 01.2 (Annex 1, CDM- 

EB55, “VVM”), and CDM requirements, these rules are complied with for any project activities 

requesting registration as a proposed CDM project activity. 

To ensure a thorough, independent assessment of proposed project activities submitted for 

registration as a proposed CDM project activity against the applicable CDM requirements. 

To assess whether the project design of the proposed CDM project activity meets the CDM 

requirements, using objective evidence, and to assess the completeness and accuracy of the claims 

and conservativeness of the assumptions made in the project design document. 

The validation protocol is consisted of the following two types of tables, which are effective for the 

purposes of validation above. 

TABLE-1 contains the checklist with questions along with the thematic chapter of VVM. 

TABLE-2 shows the corrective actions or clarifications which are requested to be taken in TABLE-1 

and the response from the PP. 

 

TABLE-1 Requirements Checklist ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ Page 1-1 

TABLE-2 Resolution of Corrective Actions and Clarification Requests ・・・・・・ Page 2-1 

2. CLARIFICATION REQUESTS, CORRECTIVE ACTION REQUESTS AND FORWARD 

ACTION REQUESTS 

If, during the validation of a project activity, issues are identified that need to be further elaborated upon, 

researched or added to in order to confirm that the project activity meets the CDM requirements and 

can achieve credible emission reductions, these issues shall be ensured that are correctly identified, 

discussed and concluded in the validation report. 

‣ CAR : a corrective action request (CAR) is raised, if one of the following occurs: 

(a) The PPs have made mistakes that will influence the ability of the project activity to achieve real, 

measurable additional emission reductions; 

(b) The CDM requirements have not been met; 

(c) There is a risk that emission reductions cannot be monitored or calculated. 

‣ CL : a clarification request (CL) is raised, 

If information is insufficient or not clear enough to determine whether the applicable CDM 

requirements have been met. 

‣ FAR : a forward action request (FAR) is raised, 

During validation to highlight issues related to project implementation that requires review 

during the first verification of the project activity. 

FARs shall not relate to the CDM requirements for registration. 

The CARs and CLs are resolved or “closed out” only if the project participants modify the project design, 

rectify the PDD or provide adequate additional explanations or evidences that satisfy the requirements. 

If this is not done, the project activity will not be recommended for registration to the CDM EB. 

All CARs, CLs and FARs will be reported on in its validation report. This reporting shall be undertaken in a 

transparent and unambiguous manner that allows the reader to understand the nature of the issue raised,


Rev.No 

02.1 


the nature of the responses provided by the project participants, the means of validation of such responses 

and clear reference to any resulting changes in the PDD or supporting annexes.


Rev.No 

02.1 


No. 

TABLE-1 

REQUIREMENTS CHECKLIST 

Requirement 

Refer. 

Para. 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

1. Approval 

Para.44-50 

VVM 

-- -- 

 

All Parties involved shall approve the project activity. 

The LoA (Letter of Approval) s of all parties involved shall be provided 

together with its information source and route. 

1.1 The LoA shall confirm that: 

(a) The Party is a Party to the Kyoto Protocol 

Para.44 

VVM 

-- -- 

(b) Participation is voluntary 

(c) The proposed CDM project activity contributes to the sustainable 

development of the country 

Para.45 

VVM 

OK 

CAR-1 

(d) It refers to the precise proposed CDM project activity title in the 

PDD being submitted for registration 

2. Participation 

2.1 

1) 

 

All project participants shall be listed in a consistent manner in the 

project documentation, and their participation in the project activity shall 

be approved by a Party to the Kyoto Protocol. 

The project participants shall be listed in tabular form in section A.3 of 

the PDD, and this information shall be consistent with the contact 

details provided in annex 1 of the PDD. 

2) The participation of each project participant shall be approved by at 

least one Party involved, either in a letter of approval or in a separate 

letter specifically to approve participation. 

3) No entities other than those approved as project participants shall be 

included in these sections of the PDD. 

2.2 The approval of participation shall be issued from the relevant DNA. 

3. Project Design Document 

 

The PDD used as a basis for validation shall be prepared in 

accordance with the latest template and guidance from the CDM 

Executive Board available on the UNFCCC CDM website. 

http://cdm.unfccc.int/Reference/PDDs_Forms/PDDs/index.html 

3.1 The PDD shall be in accordance with the applicable CDM requirements 

for completing PDDs. 

 

Para.51-54 

VVM 

Para.51 

VVM 

Para.52 

VVM 

ditto 

ditto 

Para.53 

VVM 

Para.55-57 

VVM 

Para.55 

VVM 

PDDs 

Forms 

Para.56 

VVM 

-- -- 

-- -- 

CL-2 

OK 

OK 

OK 

OK 

-- -- 

-- -- 

CL-5 

OK 

3.2 

1) 

PDD template shall not be altered, that is, shall be completed using the 

same font without modifying its format, headings or logo. 

Tables and their columns shall not be modified or deleted. Rows may 

be added, as needed. 

If sections of the CDM-PDD are not applicable, it shall be explicitly 

stated that the section is left blank on purpose. 

PDD 

Guidelines 

OK


Rev.No 

02.1 


No. 

2) 

TABLE-1 


Requirement 

Refer. 

Para. 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

The presentation of values in the PDD should be international standard 

format. ditto OK 

ID. 

No. 

4. Project Description 

 

The PDD shall contain a clear description of the project activity that 

provides the reader with a clear understanding of the precise nature 

of the project activity and the technical aspects of its implementation. 

Para.58-64 

VVM 

Para.58 

VVM 

-- -- 

-- -- 

4.1 

Project description in section A.2 of the PDD (Max 1 page) shall be a 

brief summary of that in A.4.3 and B.3. 

This shall include: 

• The purpose of the project activity 

• The view of the project participants of the contribution of the 

project activity to sustainable development. 

and explain 

• How the proposed project activity reduces GHG emissions. 

PDD 

Guidelines 

OK 

4.2 

In section A.4.3 of the PDD, a description of how environmentally safe 

and sound technology and know-how to be used is transferred to the 

host Party(ies) shall be included. 

It should also further explain the purpose of the project. 

• The scenario existing prior to the start of the project, with 

equipment list and systems in operation 

• The scope of project, with equipment list and systems 

• The baseline scenario, with equipment list and systems 

If the baseline scenario is the same as the scenario existing prior to the 

start of the project, there is no need to repeat, but only state that both 

are the same. 

ditto 

OK 

CL-4 

CL-6, 

CL-7, 

CL-8 

CL-9 

The description of the scenario should include; 

4.3 

4.4 

• A list and arrangement of the main manufacturing technologies, 

systems and equipment 

• The emission sources and the GHG, and existing and forecast 

energy and mass flows and balances of the systems and 

equipment 

• The types and levels of services 

In section A.4.4 of the PDD, 

• The chosen crediting period shall be indicated. 

• The total estimation of emission reductions as well as annual 

estimates for the chosen crediting period shall be provided. 

• Information on the emission reductions shall be indicated using the 

decided tabular format. 

• International standard format for values shall be used. 

If the DOE does not undertake a physical site inspection, it shall be 

appropriately justified. 

ditto 

Para.62 

VVM 

OK 

OK 

4.5 

If the proposed CDM project activity involves the alteration of an 

existing installation or process, 

Does the project description clearly state the differences resulting from 

the project activity compared to the pre-project situation 


Para.63 

VVM 

Para.65-93 

VVM 

OK 

-- --


Rev.No 

02.1 


No. 

(a) 

TABLE-1 

General requirement 


Requirement 

Refer. 

Para. 

VVM 

Para.65-67 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

-- -- 

The baseline and monitoring methodologies selected by the project 

participants shall comply with the methodologies previously approved 

by the CDM Executive Board. 

Para.65 

VVM 

-- -- 

To ensure that the project activity meets this general requirement, the 

followings shall be confirmed. 

(a) The selected methodology is applicable to the project activity; 

(b) The PP has correctly applied the selected methodology. 

Para.66 

VVM 

-- -- 

It shall also be ensured that the selected methodology is applicable to 

the project activity and has been correctly applied with respect to the 

followings: 

(a) Project boundary 

(b) Baseline identification 

(c) Algorithms and/or formulae used to determine emission 

reductions 

(d) Additionality 

(e) Monitoring methodology 


(b) 

5.1 

Applicability of the selected methodology to the project 

activity 

 

The selected baseline and monitoring methodology previously 

approved by the CDM Executive Board shall be validated to be 

applicable to the project activity, including that the used version is 

valid. 

Specific guidance provided by the CDM Executive Board in respect to 

any approved methodology shall be applied. 

The methodology shall be ensured to be correctly quoted and applied 

by comparing it with the actual text of the applicable version of the 

methodology available on the UNFCCC CDM website. 

Referring to the UNFCCC CDM web site for the title and reference list 

as well as the details of approved baseline methodologies, the following 

contents shall be indicated in section B.1 of the PDD. 

• the approved methodology 

• the version of the methodology that is used 

• any methodologies or tools which the approved methodology 

draws upon and their version 

Para.67 

VVM 

Para.65-93 

VVM 

Para.68-77 

VVM 

Para.68 

VVM 

Para.69 

VVM 

Para.70 

VVM 

-- -- 

-- -- 

-- -- 

-- -- 

OK 

5.2 

1) 

The choice of methodology shall be justified and the project participants 

shall show that the project activity meets each of the applicability 

conditions of the approved methodology or any tool or other 

methodology component referred to therein in section B.2 of the PDD. 

Para.71 

VVM 

OK 

2) The documentation referred to in the PDD and its content shall be 

correctly quoted and interpreted in the PDD. 


(c) 

Project boundary 

ditto 

Para.65-93 

VVM 

Para.78-80 

VM 

OK 

-- -- 

-- --


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

 

The PDD shall correctly describe the project boundary, including the 

physical delineation of the proposed CDM project activity included 

within the project boundary for the purpose of calculating project and 

baseline emissions for the proposed CDM project activity. 

Refer. 

Para. 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

Para.78 

VVM -- -- 

5.3 

1) 

The delineation in the PDD of the project boundary shall be correct and 

meet the requirements of the selected baseline methodology, which 

shall also be demonstrated by documented evidence and corroborated 

by a site visit. 

Para.79 

VVM 

OK 

CL-10 

2) All emission sources and GHGs required by the methodology shall be 

included within the project boundary for the purpose of calculating 

project emissions and baseline emissions, using the standardized table. 

ditto 

OK 

3) If the methodology allows project participants to choose whether a 

source or gas is to be included within the project boundary, the project 

participants shall justify the choice by supporting documented 

evidences. 

ditto 

OK 

4) In section B.3 of the PDD, a flow diagram of the project boundary shall 

be described including all the equipment, systems, flows of mass and 

energy, the emission sources/gases and the monitoring variables. 


(d) 

Baseline identification 

 

The PDD shall identify the baseline for the proposed CDM project 

activity, defined as the scenario that reasonably represents the 

anthropogenic emissions by sources of GHGs that would occur in the 

absence of the proposed CDM project activity. 

Any procedure contained in the methodology to identify the most 

reasonable baseline scenario, shall be correctly applied. 

If the selected methodology requires use of tools (such as the “Tool 

for the demonstration and assessment of additionality” and the 

“Combined tool to identify the baseline scenario and demonstrate 

additionality”) to establish the baseline scenario, the methodology on 

the application of these tools shall be confirmed. 

In such cases, the guidance in the methodology shall supersede the 

tool. 

The each step in the procedure described in the PDD against the 

requirements of the methodology shall be checked. 

5.4 If the methodology requires several alternative scenarios to be 

considered in the identification of the most reasonable baseline 

scenario, it shall be determined whether all scenarios that are 

considered by the project participants and are supplementary to those 

required by the methodology, are reasonable in the context of the 

proposed CDM project activity and that no reasonable alternative 

scenario has been excluded. 

5.5 It shall be determined whether the baseline scenario identified is 

reasonable by validating the assumptions, calculations and rationales 

used, as described in the PDD. 

PDD 

Guidelines 

Para.65-93 

VVM 

Para.81-88 

VVM 

Para.81 

VVM 

Para.82 

VVM 

Para.83 

VVM 

Para.84 

VVM 

OK 

-- -- 

-- -- 

-- -- 

-- -- 

OK 

OK 

The documents and sources referred to in the PDD shall be correctly 

quoted and interpreted. 

All data used to determine the baseline scenario shall be illustrated in a 

ditto 

OK


Rev.No 

02.1 


No. 

TABLE-1 REQUIREMENTS CHECKLIST 

Requirement 

transparent manner, preferably in a table form. 

Refer. 

Para. 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

5.6 All applicable CDM requirements shall be taken into account in the 

identification of the baseline scenario for the proposed CDM project 

activity, including “relevant national and/or sectoral policies and 

circumstances.” 

(See decision 3/CMP.1, annex, paragraph 45, currently located at 

, and Latest, 

“Clarificationson the consideration of national and/or sectoral policies and 

circumstances in baseline scenarios”,. 

Para.85 

VVM 

Para.45 

CDM/M&P 

OK 

CL-12 

5.7 The PDD shall provide a verifiable description of the identified baseline 

scenario, including a description of the technology that would be 

employed and/or the activities that would take place in the absence of 

the proposed CDM project activity. 

Para.86 

VVM 

OK 


(e) 

5.8 

Algorithms and/or formulae used to determine emission 

reductions 

 

The steps taken and equations applied to calculate project emissions, 

baseline emissions, leakage and emission reductions shall comply with 

the requirements of the selected baseline and monitoring methodology. 

The equations and parameters in the PDD shall be correctly applied by 

comparing them to those in the selected approved methodology. 

If the methodology provides for selection between different options for 

equations or parameters, adequate justification shall be provided 

(based on the choice of the baseline scenario, context of the project 

activity and other evidence) and the correct equations and parameters 

shall be used, in accordance with the methodology selected. 

5.9 The justification shall be given in the PDD for the choice of data and 

parameters used in the equations. 

If data and parameters will not be monitored throughout the crediting 

period of the proposed CDM project activity but have already been 

determined and will remain fixed throughout the crediting period, it shall 

be demonstrated that all data sources and assumptions are appropriate 

and calculations are correct, applicable to the proposed CDM project 

activity and will result in a conservative estimate of the emission 

reductions. 

If data and parameters will be monitored on implementation and hence 

become available only after validation of the project activity, it shall be 

demonstrated that the estimates provided in the PDD for these data and 

parameters are reasonable. 

5.10 In section B.6.2 of the PDD, 

Where time series of data is used, where several measurements are 

undertaken or where surveys have been conducted, detail information 

shall be provided in Annex 3 of the PDD. 

The choice for the source of data shall be explained and justified. Clear 

and transparent references or additional documentation shall be 

provided in Annex 3 of the PDD.. 

Para.65-93 

VVM 

Para.89-93 

VVM 

Para.89 

VVM 

Para.90 

VVM 

ditto 

Para.91 

VVM 

ditto 

ditto 

PDD 

Guidelines 

-- -- 

-- -- 

-- -- 

OK 

OK 

OK 

OK 

OK 

OK


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

Where values have been measured, a description of the measurement 

methods shall be included. More detail information can be provided in 

Annex 3. 

5.11 In section B.6.3 of the PDD, a transparent ex-ante calculation of project 

emissions, baseline emissions and leakage emissions expected during 

the crediting period and applied all relevant equations in the approved 

methodology shall be provided and how each equation is applied shall 

be documented in a manner that enables the reader to reproduce the 

calculation. 

5.12 In section B.6.4 of the PDD, the results of the ex-ante estimation shall 

be summarized using the standardized table. 

6. Additionality of a project activity 

 

The PDD shall describe how a proposed CDM project activity is 

additional. 

In accordance with decision 3/CMP.1,annex, paragraph 43 “A CDM project 

activity is additional if anthropogenic emissions of greenhouse gases by 

sources are reduced below those that would have occurred in the absence of 

the registered CDM project activity” (see decision 5/CMP.1, annex 

paragraph 18 ). While specific elements of the assessment of additionality 

are discussed in further detail in paragraphs 98-121 in VVM, not all 

elements discussed below will be applicable to all proposed CDM 

project activities. 


(a) 

Prior consideration of the clean development mechanism 

While specific elements of the assessment of additionality are discussed in 

further detail in Section 6.3 –6.15 below, not all elements discussed below will 

be applicable to all proposed CDM project activities 

Refer. 

Para. 

VVM 

ditto 

ditto 

Para.94- 

121 VVM 

Para.94 

VVM 

Para.43 

CDM/M&P 

Para.94- 

121VVM 

Para.98- 

104 VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

OK 

OK 

ID. 

No. 

-- -- 

-- -- 

-- -- 

-- -- 

 

If the project activity start date is prior to the date of publication of the 

PDD for stakeholder comments it shall be demonstrated that the CDM 

benefits were considered necessary in the decision to undertake the 

project as a proposed CDM project activity. 

6.1 The start date of the project activity, reported in the PDD, shall be in 

accordance with the “Glossary of CDM terms”. 

http://cdm.unfccc.int/Reference/Guidclarif/glos_CDM_v03.pdf 

Latest Glossary of CDM terms 

The starting date of a CDM project activity is the date on which the 

implementation or construction or real action of a project activity begins. 

In section C.1 of the PDD, the description should contain not only the 

date, but also a description of how this start date has been determined, 

and a description of the evidence available to support this start date. 

Para.98 

VVM -- -- 

Para.99 

VVM 

ditto 

OK 

OK 

In particular, for project activities that require construction, retrofit or 

other modifications, the date of commissioning cannot be considered 

the project activity start date. 

ditto 

OK 

6.2 

It shall be identified whether it is a project activity with a start date on or 

after 02 August 2008 in accordance with the guidance from the CDM 

Executive Board, or a project activity with a start date before 02 August 

2008. 

(See Latest Guidelines on the Demonstration and Assessment of Prior 

Consideration of the CDM) 

Para.100 

VVM 

OK


Rev.No 

02.1 


No. 

6.3 

6.4 

1) 

TABLE-1 


Requirement 

For a new project activity, for which PDD has not 

been published for global stakeholder consultation or a new 

methodology proposed to the CDM Executive Board before the project 

activity start date, the DOE shall ensure by means of confirmation 

from the UNFCCC secretariat that PPs had informed the host Party 

DNA and the UNFCCC secretariat in writing of the commencement of 

the project activity and of their intention to seek CDM status. If such a 

notification has not been provided by the project participants within six 

months of the project activity start date, the DOE shall determine that 

the CDM was not seriously considered in the decision to implement the 


(See Latest, .Prior consideration of the CDM form, currently located at 

, for the 

standardized form. 

For an existing project activity, for which the start date is prior to the 

date of publication of the PDD for global stakeholder consultation, the 

project participant’s prior consideration of the CDM shall be 

demonstrated by providing the following evidence (preferably official, 

legal and/or other corporate). In such cases the PP shall provide an 

implementation timeline of the project in section B.5 of the PDD. 

2) Evidence to indicate awareness of the CDM prior to the project activity 

start date, and evidence to indicate that the benefits of the CDM were a 

decisive factor in the decision to proceed with the project shall be 

provided. 

3) 

Evidence to support this would include, inter alia, minutes and/or notes 

related to the consideration of the decision by the Board of Directors, or 

equivalent, of the project participant, to undertake the project as a 

proposed CDM project activity. 

4) Reliable evidence that must indicate that continuing and real actions 

were taken to secure CDM status for the project in parallel with its 

implementation. 

5) Evidence to support this should include, inter alia, 

• contracts with consultants for CDM/PDD/methodology services, 

• Emission Reduction Purchase Agreements or other documentation 

related to the sale of the potential CERs (including correspondence 

with multilateral financial institutions or carbon funds), 

• Evidence of agreements or negotiations with a DOE for validation 

services, 

• Submission of a new methodology to the CDM Executive Board, 

• Publication in newspaper, 

• Interviews with DNA, 

• Earlier correspondence on the project with the DNA or the 

UNFCCC secretariat. 


(b) 

6.5 

1) 

Identification of alternatives 

 

The PDD shall identify credible alternatives to the project activity in 

order to determine the most realistic baseline scenario, unless the 

approved methodology that is selected by the proposed CDM project 

activity prescribes the baseline scenario and no further analysis is 

required. 

The list of alternatives shall includes as one of the options that the 

project activity is undertaken without being registered as a proposed 

CDM project activity; 

Refer. 

Para. 

VVM 

Para.101 

VVM 

Para.102 

VVM 

ditto 

ditto 

ditto 

ditto 

Para.94- 

121 VVM 

Para.105- 

107 VVM 

Para.105 

VVM 

Para.106 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

OK 

OK 

OK 

OK 

OK 

OK 

ID. 

No. 

CL-11 

-- -- 

-- -- 

-- -- 

OK


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

2) The list shall contains all plausible alternatives that are considered, on 

the basis of local and sectoral knowledge, to be viable means of 

supplying the outputs or services that are to be supplied by the 


Refer. 

Para. 

VVM 

ditto 

(OK/No/NA/Tb 

v) 

Check 

Comment 

3) The alternatives shall comply with all applicable and enforced 

legislation. ditto OK 


(c) 

6.6 

Investment analysis 

 

If investment analysis has been used to demonstrate the additionality of 

the proposed CDM project activity, the PDD shall provide evidence that 

the proposed CDM project activity would not be: 

The most economically or financially attractive alternative; or 

Economically or financially feasible, without the revenue from the sale 

of certified emission reductions (CERs). 

6.7 Project participants can show this through one of the following 

approaches, by demonstrating that: 

Para.94- 

121 VVM 

Para.108- 

114 VVM 

Para.108 

VVM 

Para.109 

VVM 

OK 

ID. 

No. 

-- -- 

-- -- 

-- -- 

-- -- 

1) Demonstrate that the proposed CDM project activity would produce no 

financial or economic benefits other than CDM-related income. 

Document the costs associated with the proposed CDM project activity 

and the alternatives identified and demonstrate that there is at least one 

alternative which is less costly than the proposed CDM project activity; 

ditto 

OK 

CL-1 

CL-16 

2) The proposed CDM project activity is less economically or financially 

attractive than at least one other credible and realistic alternative; 

ditto 

OK 

[3) Financial returns of the proposed CDM project activity would be 

insufficient to justify the required investment. 

6.8 

1) 

2) 

6.9 

1) 

2) 

The DOE shall comply with the latest version of the “Guidelines on the 

Assessment of Investment Analysis” as provided by the CDM Executive Board 

and with other relevant guidance including the latest guidelines on plant 

load factors “guidelines for the reporting and validation of plant load 

factors” ( See EB 51 report, annex 58 currently located at 

.) 

Project participants should provide spreadsheet versions of all 

investment analysis. All formulas used in this analysis be readable and 

all relevant cells be viewable and unprotected. 

The evidences on which input values in the investment analysis are 

based shall be provided. 

All parameters and assumptions used in calculating the relevant 

financial indicator shall be validated thoroughly, and the accuracy and 

suitability of these parameters shall be verified using the available 

evidence and expertise in relevant accounting practices. 

Input values used in all investment analysis should be valid and 

applicable at the time of the investment decision taken by the project 

participant. 

3) The cost of financing expenditures (i.e. loan repayments and interest) 

should not be included in the calculation of project IRR. 

4) In the case of project activities for which implementation ceases after 

the commencement and where implementation is recommenced due to 

consideration of the CDM the investment analysis should reflect the 

economic decision making context at point of the decision to 

recommence the project. Therefore capital costs incurred prior to the 

ditto 

Para.110 

VVM 

Annex 5 

EB62 

Annex 5 

EB62 

ditto 

Para.111 

VVM 

Annex 5 

EB62 

ditto 

ditto 

OK 

-- -- 

OK 

OK 

OK 

CL-3 

OK 

OK 

OK


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

revised project activity start date can be reflected as the recoverable 

value of the assets, which are limited to the potential reuse/resale of 

tangible assets. 

Refer. 

Para. 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

5) Only variables, including the initial investment cost, that constitute more 

than 20% of either total project costs or total project revenues should be 

subjected to reasonable variation (all parameters varied need not 

necessarily be subjected to both negative and positive variations of the 

same magnitude), and the results of this variation should be presented 

in the PDD and be reproducible in the associated spreadsheets.. 

Where a variable which constitute less than 20% has a material impact 

on the analysis, this variable shall be included in the sensitivity analysis. 

As a general point of departure variations in the sensitivity analysis 

should at least cover a range of +10% and –10%, unless this is not 

deemed appropriate in the context of the specific project circumstances. 

6) Such evidence for the evaluation of investment analysis as invoices, 

receipts, price indices, feasibility reports, public announcements, 

audited actual project cost and annual financial reports shall be 

provided upon request of the DOE. 

ditto 

ditto 

OK 

OK 

6.10 The suitability of any benchmark applied in the investment analysis: 

Para.112 

VVM 

-- -- 

1) In cases where a benchmark approach is used the applied benchmark 

shall be appropriate to the type of IRR calculated. Local commercial 

lending rates or weighted average costs of capital (WACC) are 

appropriate benchmarks for a project IRR. Required/expected returns 

on equity are appropriate benchmarks for an equity IRR. Benchmarks 

supplied by relevant national authorities are also appropriate if the DOE 

can validate that they are applicable to the project activity and the type 

of IRR calculation presented. 

2) If the proposed baseline scenario leaves the project participant no other 

choice than to make an investment to supply the same (or substitute) 

products or services, a benchmark analysis is not appropriate and an 

investment comparison analysis shall be used. If the alternative to the 

project activity is the supply of electricity from a grid this is not to be 

considered an investment and a benchmark approach is considered 

appropriate. 

Annex 5 

EB62 

OK 

CL-12 

CL-13 

CL-14 

CL-15 

ditto 

OK 

3) The effectiveness of the applied benchmark shall be demonstrated with 

appropriate evidence. 

ditto 

OK 

4) The PPs shall demonstrate that it is reasonable to assume that no 

investment would be made at a rate of return lower than the benchmark 

by, for example, showing previous investment decisions by themslves 

involved and demonstrating that the same benchmark has been 

applied, or if there are verifiable circumstances that have led to a 

change in the benchmark. 

Para.112 

VVM 

OK 

6.11 

The CDM Executive Board clarified that in cases where project 

participants rely on values from Feasibility Study Reports (FSR) that are 

approved by national authorities for proposed CDM project activities, it 

is required to ensure that: 

(See the EB 38 report, paragraph 54, currently located at 

. 

Para.113 

VVM 

Para.54 

EB38 

-- -- 

1) The period of time between the finalization of the FSR and the 

investment decision shall be sufficiently short for the DOE to confirm 

that it is unlikely in the context of the underlying project activity that the 

input values would have materially changed; 

ditto 

OK 

CL-1


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

2) The values used in the PDD and associated annexes shall be fully 

consistent with the FSR, and where inconsistencies occur the 

appropriateness of the values shall be explained. 

3) 

It shall be confirmed that the input values from the FSR are valid and 

applicable at the time of the investment decision. 


(d) 

6.12 

1) 

6.13 

1) 

6.14 

1) 

2) 

Barrier analysis 

Barriers are issues in project implementation that could prevent a 

potential investor from pursuing the implementation of the proposed 

project activity. The identified barriers are only sufficient grounds for 

demonstration of additionality if they would prevent potential project 

proponents from carrying out the proposed project activity undertaken 

without being registered as a CDM project activity. 

 

If barrier analysis has been used to demonstrate the additionality of the 

proposed CDM project activity, the PDD shall demonstrate that the 

proposed CDM project activity faces barriers as below. 

(a) Prevent the implementation of this type of proposed CDM project 

activity; 

(See Latest .guidelines for objective demonstration and assessment 

of barriers., currently located at 

(b) Do not prevent the implementation of at least one of the 

alternatives. 

Issues that have a clear direct impact on the financial returns of the 

project activity cannot be considered barriers and shall be assessed by 

investment analysis. This does not refer to either 

(a) Risk related barriers, for example risk of technical failure, that could 

have negative effects on financial performance, or 

(b) Barriers related to the unavailability of sources of finance for the 


The available evidence shall be provided and/or interviews with 

relevant individuals (including members of industry associations, 

government officials or local experts if necessary) shall be arranged to 

demonstrate that the barriers listed in the PDD exist. 

The existence of barriers shall be substantiated by independent 

sources of data such as relevant national legislation, surveys of local 

conditions and national or international statistics. 


(e) 

6.15 

1) 

Common practice analysis 

 

For proposed large-scale CDM project activities, unless the proposed 

project type is first-of-its kind, common practice analysis shall be carried 

out as a credibility check of the other available evidence used by the 

project participants to demonstrate additionality. 

This is to confirm that the project activity is not widely observed and 

commonly carried out in the region.. 

The project participants shall clearly define “activities that are similar to 

the proposed project activity” in terms of technology and scale and 

justify the definition in CDM-PDD. 

Refer. 

Para. 

VVM 

ditto 

ditto 

Para.115- 

121 VVM 

Para.115- 

118 VVM 

Para.115 

VVM 

Para.115 

VVM 

Para.116 

VVM 

Para.117 

VVM 

ditto 

Para.94- 

121 VVM 

Para.119- 

121 VVM 

Para.119 

VVM 

Additional 

Tool 

(OK/No/NA/Tb 

v) 

Check 

Comment 

OK 

OK 

ID. 

No. 

-- -- 

-- -- 

-- -- 

OK 

OK 

OK 

OK 

CL-12 

-- -- 

-- -- 

-- -- 

OK 

CL-18 

CL-19 

CL-20


Rev.No 

02.1 


No. 

2) 

3) 

4) 

5) 

TABLE-1 


Requirement 

Screening (selection) criteria for common practice analysis shall be 

demonstrated with appropriate evidences and justification. 

The relevant geographical area for undertaking the common practice 

analysis should in principle be the host country of the proposed CDM 

project activity. A region within the country could be the relevant 

geographical area if the framework conditions vary significantly within 

the country. 

All the data used in the implementation of common practice analysis 

and reported in the PDD shall be supported by documentation and the 

PDD shall clearly state the complete reference of such documentation 

to enable access to it by a third party. 

Where documented information may be difficult to access or 

unavailable, local expert analysis on a common practice shall be 

provided. 

7. Monitoring plan 

7.1 

1) 

 

The PDD shall include a monitoring plan. This monitoring plan shall be 

based on the approved monitoring methodology applied to the 


Compliance of the monitoring plan with the approved 

methodology 

(i). The list of parameters required by the selected approved 

methodology shall be identified. 

2) (ii) The monitoring plan shall contain all necessary parameters, and the 

means of monitoring described in the plan shall complie with the 

requirements of the methodology; 

For each parameter, the following information shall be explicitly 

3) 

described in the standardized table in the PDD. 

• Source of data 

• Value of data applied 

• Description of measurement methods and procedures 

• QA/QC procedures 

• Any comment, if any 

(Note): Data monitored and required for verification and issuance are to 

be kept for two (2) years after the end of the crediting period or the 

last issuance of CERs for this project activity, whichever occurs later. 

4) The operational and management structure that the project operator will 

implement in order to monitor emission reductions and leakage effects 

generated by the project activity shall be clearly described in the PDD 

(section 7.2) including the responsibilities for and institutional 

arrangements for data collection and archiving. 

5) 

Implementation of the plan 

(i) The monitoring arrangements described in the monitoring plan shall 

be feasible within the project design; 

6) (ii) The means of implementation of the monitoring plan, including the 

data management and quality assurance and quality control 

procedures, shall be sufficient to ensure that the emission reductions 

achieved by/resulting from the proposed CDM project activity can be 

reported ex post and verified. 

7.2 

Relevant furthur background information, if any, shall be provided in 

Annex 4 of the PDD. 

Refer. 

Para. 

VVM 

ditto 

ditto 

ditto 

ditto 

Para.122- 

124 VVM 

Para.122 

VVM 

Para.123 

VVM 

ditto 

PDD 

Guidelines 

ditto 

Para.123 

VVM 

ditto 

PDD 

Guidelines 

(OK/No/NA/Tb 

v) 

Check 

Comment 

OK 

OK 

OK 

OK 

ID. 

No. 

-- -- 

-- -- 

OK 

OK 

OK 

OK 

OK 

OK 

OK 

CL-22 

CL-23 

CL-24 

CL-25 

CL-23 

CL-24 

CL-25


Rev.No 

02.1 


No. 

TABLE-1 


Requirement 

8. Sustainable development 

8.1 

 

CDM project activities shall assist Parties not included in Annex I to 

the Convention in achieving sustainable development. 

The letter of approval by the DNA of the host Party shall confirm the 

contribution of the proposed CDM project activity to the sustainable 

development of the host Party. 

9. Local stakeholder consultation 

9.1 

1) 

2) 

3) 

 

Local stakeholders shall be invited by the PPs to comment on the 

proposed CDM project activity prior to the publication of the PDD on 

the UNFCCC website. 

See glossary of CDM terms, currently located at 

, for definition 

of stakeholders. 

Comments by local stakeholders that can reasonably be considered 

relevant for the proposed CDM project activity shall be invited in an 

open and transparent manner. 

The summary of the comments received as provided in the PDD shall 

be complete. 

The project participants shall demonstrate that they have taken due 

account of any comments received and shall describe/explain this 

process in the PDD. 

10. Environmental impacts 

 

Project participants shall submit documentation to the DOE on the 

analysis of the environmental impacts of the project activity in 

accordance with paragraph 37(c) of the CDM modalities and 

procedures. 

10.1 Project participants shall submit documentation to the DOE on the 

analysis of the environmental impacts of the project activity 

10.2 

Project participants shall also provide all references to support 

documentation of a EIA if required by the host Party 

Refer. 

Para. 

VVM 

Para.125- 

127 VVM 

Para.125 

VVM 

Para.126 

VVM 

Para.128- 

130 VVM 

Para.128 

VVM 

Glossary of 

CDM terms 

Para.129 

VVM 

ditto 

ditto 

Para.131- 

133 VVM 

Para.131 

VVM 

Para.37(c) 

CDM/M&P 

Para.131 

VVM 

Para.132 

VVM 

(OK/No/NA/Tb 

v) 

Check 

Comment 

ID. 

No. 

-- -- 

-- -- 

OK 

-- -- 

-- -- 

OK 

OK 

OK 

CL-26 

-- -- 

-- -- 

OK 

OK 

CL-27 

CL-28 

CL-29 

CL-30


Rev.No 

02.1 

CDM Validation Protocol for Thac Xang Hydropower Project 

CAR, 

CL 

CAR 

CAR-1 

TABLE-2 Resolution of Corrective Actions and Clarification Requests 

Clarifications and corrective 

action requests 

Corrective 

Requests 

Action 

Letter of approval (LoA) of Viet 

Nam and Sweden should be 

provided. 

Table-1 

Summary of project owner response 

1.1 Viet Nam LoA/6A/ is issued on 22/03/2012. 

A1: Sweden LoA/6B/ is issued on 14/05/2012. 

Validation team 

Conclusion 

Q1: To be provided 

Sweden LoA. 

A1 is OK. Both LoA are 

fulfilled the participation 

criteria, approve the 

proposed project and 

authorize the project 

participants (PP). CAR-1 

is closed. 

CL 

CL-1 

CL-2 

Clarification Requests 

FSR, IRR 

It is requested to provide 

Feasibility Study report (FSR) and 

Internal rate of return (IRR) for 

identification of consistency with 

PDD. 

PP’s title of Annex I country (p3 of 

PDD) 

Title of the project participant (PP) 

should be clarified. 

6.7, 

6.11 

Adjusted FSR/4/ and IRR/3/ are submitted. 

Although Previous FSR has been issued on May 2008, After the approval of 

FSR/8/ on 27 May 2009, the previous FSR has been revised to Adjusted 

FSR/4/ by another third party on March 2010. 

2 Although JCI reported the PP’s title of Annex I country as “Nordic 

Environment Finance Corporation” in the form for commencement of PDD 

GSP/1/, it should be corrected the title to “Nordic Environment Finance 

Corporation NEFCO in its capacity as Fund Manager to the NEFCO Carbon 

Fund (NeCF)” 

OK. FSR has been 

approved by local 

government/8/ and the 

input values of IRR are 

consistent with PDD. 

Also IRR calculation is 

consistent with PDD. 


OK. JCI confirms the 

revised title is consistent 

with MoC. CL-2 is 

closed. 

CAR: Corrective Action Request, CL: Clarification Request, FAR: Forward Action Request, NA: Not Applicable, Blue: Q1, A1: 1 st Q&A, Red: Q2, A2: 2 nd Q&A, Green: Q3, A3: 3 rd Q&A Page2-1


Rev.No 

02.1 



CAR, 

CL 



CL-3 Date of investment decision (p12 

of PDD) 

Board Meeting Records for 

investment decision should be 

provided. 

CL-4 Loss load rate of electricity (p15 of 

PDD) 

It should be clarified detail of loss 

load such as operation hour, 

effective power factor, 

transmission loss. 

CL-5 

CL-6 

Figure 1 (p5 of PDD) 

It is requested to revise the 

location map. Map of the project 

site should be changed to more 

clearly map. 

Lifetime (p7 of PDD) 

It is requested to clarify the lifetime 

of turbine and generator 

Table-1 



Conclusion 

6.9 Minutes of Board resolution for investment decision has been provided /67/ OK. The investment 

decision has been 

reported in the Meeting 

Record appropriately. 


4.2 Value of 1.5% load loss is described in page 20-2 of the FSR/4/ - which was 

prepared by the third party. 

A1: The detail calculation of 1.5% load loss is provided/88/. 

- Internal consumption rate 0.005 (0.5 %) 

- Transformer loss rate 0.75% 

- Transmission loss rate 0.25% 

Therefore, total loss rate is 1.5 %. In addition, the range of loss load loss 

load estimated in a conservative manner based on National codes and 

regulations 

A2: National codes and regulations are submitted. 

- ”Decision No 30/2006/QD-BCN” /30/ 

- ”Decree No.45/2001/ND-CP” /32/. 

3.1 The map of the project site has been changed clearly in the PDD for Request 

for Registration (RFR). 

4.2 The lifetime of turbine and generator has been added in the revised PDD 

(latest version). The lifetime is the default value provided at EB50 Report, 

Annex 15,” Methodological Tool; Tool to determine the remaining lifetime of 

equipment” (Version 01)” page 4 . 

Q1: It should be 

provided the details of 

1.5 %. 


provided some 

regulation for evidences 

A2 is OK. 1.5 % of loss 

load is in conservative 

manner on national code 

and regulation. CL-4 is 

closed. 

OK. The revised map is 

clearly reported the 

location. CL-5 is closed. 

OK. 30 years of 

technical lifetime is 

complied with 

Methodological Tool. 




Rev.No 

02.1 



CAR, 

CL 



Table-1 



Conclusion 

CL-7 

Hydrologic data (p7 of PDD) 

It is requested to explain the 

hydraulic data; 

- annual river flow data 

- name of monitoring station 

- monitoring periods 

4.2 The hydraulic data are as below: 

- Annual river flow data : 55.2 m 3 /s 

- Name of monitoring station: Van Mich station 

- Monitoring years: From 1960 to 2008 

All hydraulic data has been surveyed and calculated by the third party and 

then the FSR/4/ has been approved by the local authority/8/. The details in 

the FSR/4/-page 3-9 have been provided. 

4.2 The PLF was calculated in the FSR by the third party (the technical 

consultant of the project) as below: 

PLF = (the annual electricity output / (the capacity x 8760 h/y) x 100%) = 

76350 / (20 x 8760) x 100 = 43.58% 

The annual output (76.350 MW) and operation hour (3818 h) has been 

designed by a third party contracted by the project participants (e.g. an 

engineering company)”. The FSR (page 7-6)” has been approved by the local 

authority/8/. 

4.2 The specification of turbines, generators are not indicated in the signed 

equipment contract dated 19 Jul 2011/17/.The equipment contract only 

mentions general data of equipment as detailed in the PDD but not providing 

specification data. The specification data will be indicated in the design book 

and the name plate of equipment that are available for verifying in the first 

verification. 

OK. JCI identifies the 

hydraulic data is based 

on long-term river 

hydrologic data (1960 – 

2008). CL-7 is closed. 

CL-8 

PLF and operation hour (p7 of 

PDD) 

It is requested to clarify how to 

calculate the PLF and annual net 

electricity supplied to the grid 

(EGfacility,y) 

OK. The calculation 

process of PLF, net 

electricity and operation 

hours are clarified and 

appropriate. CL-8 is 

closed. 

CL-9 

Specifications of equipments (p7 of 

PDD) 


specification data. 

The specification will be 

clarified before 

Verification. 

CL-9 is transferred to 

FAR-1. 



Rev.No 

02.1 


CAR, 

CL 

CL-10 




Project boundary (p11 of PDD) 

1) It shall be clarified the project 

boundary, project activity of the 

proposed project and grid structure 

in the Figure 3 of PDD. 

2) It should be described local 

power grid and grid structure. 

Table-1 


5.3 1) The project boundary, project activity of the proposed project and the 

national grid is clarified in the Figure 3 of the PDD. Since there is only one 

national grid in Vietnam that is operated and monopolized by the EVN and is 

the unique transmission and distribution line, to which all power plants in 

Vietnam are physically connected, the grid structure is the national grid/12/. 

This information has been described in Section B.4 of the PDD. 

2) As mentioned above, the local power grid as well as the grid structure is 

the same national grid. The “local grid” mentioned in figure 5 of the PDD is 

revised to “the national grid” in the latest PDD. 


Conclusion 

1) and 2) are OK. The 

project boundary is 

reported in PDD for 

RFR/2/ appropriately. 


CL-11 

CDM timeline(Major milestones), 

(p12 of PDD) 

It is requested to demonstrate for 

“continuing and real actions were 

taken to secure CDM status” in 

Table 5. 

6.4 According to the Guideline, ver 03, EB 49, Thac Xang HPP belongs to B. 

New project activities, therefore evidence of notification to UNFCCC could be 

enough for demonstration of prior consideration. Therefore, the “continuing 

and real actions were taken to secure CDM status” is applied to C. Existing 

project activities only. 

Nonetheless, more activities demonstrating for continuing and real action to 

pursue CDM have been added in the project’s chronology. 

OK. The continuing and 

real actions are well 

reported in PDD for 

RFR/2/such as 

equipment contract and 

ERPA. CL-11 is closed. 



Rev.No 

02.1 


CAR, 

CL 

CL- 12 




Total static investment (p15 of 

PDD) 

Basic data of Total static 

investment shall be provided such 

as civil construction, mechanical 

equipment, labours force, 

compensation, management, 

others etc. 

- designed base 

- contract base 

- actual base 

Table-1 


6.10 A1: The project has been started from Sept 2010. The actual expenditures 

and the remaining values as of end November 2011/89/ are as follows: 

Item 

Total value of the 

contract: 

construction 

works 

Designed 

base 

(billion 

VND) 

Expenditure for 

contracts signed 

as of end Nov 

2011 (b VND) 

432.791 not yet available 

229.449 

equipment 147.645 

Compensation 

cost 

Project 

management cost 

169,600 (only for 

the first contract) 

8,896,798 USD 

(182,829 b VND) 

8.500 not yet finalized 

Actual 

expenditure 

as of end 

Nov 2011 

(b VND) 

Final 

expected 

expenditures 

(b VND) 

155.227 537.837 

94.545 304.490 

34.545 183.257 

4.500 8.500 

5.274 not yet finalized 4.545 6.477 

Consultancy cost 15.674 not yet finalized 13.636 17.962 

Other cost 5.640 not yet finalized 3.455 6.772 

Contingency cost 20.609 not yet finalized 0 

10.379 


Conclusion 

Q1: It is requested to 

confirm and complete 

the tabulated data. 

Q2: The evidences of 

actual expenditure 

should be provided. 

A2: The evidences of actual expenditures are provided. 

- Contract for CDM Consultation/16/ 

- Contract for civil Construction works/17/ 

- Contract for Equipments and technical services /18/ 

A2 is OK. The Actual 

expenditures/89/ are 

confirmed the 

appropriateness and the 

Final expected 

expenditures are almost 

higher than the designed 

base and it is 

conservative. CL-12 is 

closed. 



Rev.No 

02.1 



CAR, 

CL 



Table-1 



Conclusion 

CL- 13 

CL- 14 

CL- 15 

Expected Tariff (p15 of PDD) 

Evidence of tariff should be 

provided. 

- designed tariff 

- actual tariff 

- highest tariff 

Tax rate (p15 of PDD) 

The evidence of tax rate shall be 

provided. 

O&M Cost (p15 of PDD) 

The evidence of O&M cost 1.5% 

(FSR, p20-2) shall be provided. 

1) salary 

2) welfare 

3) financial 

4) material 

3) “others” 

6.10 1) In FSR/4/, p20-2 to -4; 

Electricity price is calculated according to avoided cost tariff in 2010 (No.73/QD-DTDL 

of director of electricity regulatory authority issued on 30/12/2009)/33A/ has applied to 

small renewable hydropower plants and electricity generation calculated by the third 

party, the details is as below: 

- Annual average price: 777.64 VND/kWh 

2) Regulation on tariff has been provided. 

- Page 1,5,7 of 41_Decision No 18-2008-BCT Promulgating the Regulation on 

Avoided Cost Tariff/33C/ 

- Regulation on electricity tariff included Temporary guidelines for power generation 

projects (Decision No. 2014/2007/QD-BCN)/33B/ 

6.10 Income tax, VAT and natural resource tax have been reported in FSR/4/, 

p20-3. 

In FSR, p20-3, 

- The evidence of VAT, royalties and business income tax/36A 

- Natural resource tax: 2% of the revenue from electricity generation/35B/. 

6.10 

A1: The O&M cost of 1.5% was determined by the third party in the FSR 

according to Circular no. 05/2007/TT-BXD dated 25/07/2007. and Decision 

2014/2007QD-BCN/26/ dated 13/06/2007 on Promulgation of Temporary 

Regulation on Contents of Investment Financial-Economic Analyses and Price 

Frame for Electricity Sale and Purchase from Power Generation Projects. The 

Decision regulates that all hydropower project below 30 MW apply O&M cost 

from 1% to 2 % of total investment cost. The O&M cost of the proposed 

project applied 1.5% is within this range. 

No regulation in Vietnam requires to breakdown this cost in details, therefore 

no information available as required but the calculation in the approved FSR 

is fully in line with the country’s standard and norm as confirmed above. 

OK. The tariff of the 

project is complied with 

regulation of Vietnam. 


OK. JCI identifies the 

evidences of Income tax, 

VAT and Natural 

resource tax. The project 

IRR is complied with 



Q1: It is requested to 

clarify the details of the 

O&M cost 

A1 is OK. 1.5 % of O&M 

cost/investment cost is 

within range of 





Rev.No 

02.1 



CAR, 

CL 

CL- 16 

CL- 17 



Sensitivity analysis (p17 of PDD) 

It should be reported graph of 

sensitivity analysis 

Barrier analysis: Step 3 (p18 of 

PDD) 

It may be described the reason of 

step skipping instead of ” No 

applied”. 

CL- 18 Common Practice analysis : Step 4 

(p18 of PDD) 

It may be provided the information 

of “Master Plans and management 

hierarchy for hydropower projects”. 

CL- 19 Common Practice analysis ; Step 4 

(p18 of PDD) 

It may be better reviewed latest 

Guidelines on Common Practice 

(Version 01.0) Annex 12, EB 63 

Report. Especially, the definition: 

“Applicable geographical area 

covers the entire host country as a 

default”. 

Table-1 


6.7 The graph of sensitivity analysis has been supplemented in the PDD for 

RFR/2/. 

6.12 According to the Tool for the demonstration and assessment of additionality 

Version 05.2.1 (EB39, annex 10), page 7: “If after the sensitivity analysis it is 

concluded that: (1) the proposed CDM project activity is unlikely to be the 

most financially/economically attractive (as per Step 2c para 11a) or is 

unlikely to be financially/economically attractive (as per Step 2c para 11b), 

then proceed to Step 4 (Common practice analysis)”. 

6.15 The National Development Strategies and Master Plans for Renewable 

Energy/21/ and the “Master Plans” for Hydropower Generation (Decision 

No.3454/QD-BCN)/23/ have been provided. 

6.15 The proposed project type is not first-of-its kind (according to Sub-step 3a), 

nor falls under measures listed in paragraph 6 of the EB65, Annex 21, 

therefore the generic additionality tests shall be applicable to the common 

practice of this project as guided in Annex 21, EB 65. The whole country (Viet 

Nam) was selected then it is in line with para 44, Annex 21, EB 65 that 

“Projects are considered similar if they are in the same country”. 


Conclusion 

OK. The graph is 

appropriate. CL-16 is 

closed. 

OK. JCI understands the 

design policy of PDD 

author. CL17 is closed. 


Strategies are the 

design bases for 

hydropower 

development in Viet 

Nam. CL-18 is closed. 

OK. The demonstration 

is appropriately. CL-19 is 

closed. 



Rev.No 

02.1 



CAR, Clarifications and corrective 

CL 


CL -20 Common Practice analysis; Step 4 

(p18 of PDD) 

It may be better provide evidences 

of every project in Table 10. 

CL -21 

CL- 22 

EF; Step 3: (p18 of PDD) (p23 of 

PDD) 

It is requested to provide the 

evidence of Baseline Emission 

Factors in Viet Nam. 

Monitoring system. (p36 of PDD) 


evidence for accuracy of 

monitoring meter. 

Table-1 


6.15 The evidences of Table 11 have been provided.. 

- List of Power Plant reported by Institute of Energy/42/ 

- Ea Krong Rou HPP/45/ 

- Information about State-owned corporations or joint stock companies/46/ 

- Information of Song Da Corporation/47/ 

- Prospectus of Nam Mu Hydropower Joint Stock Company/44/ 

- Suoi Sap_ODA Credit contract/49/ 

5.6 The evidences have been provided. 

- Emission factor for grid issued by DNA Viet Nam/39/ 

A1: Although DNA Viet Nam has calculated Emission factor using by the 

default value of IPCC/52/, PP (project participants) has re-calculated the 

Emission factor using by the lower limit of the uncertainty at a 95% 

confidence interval provided in table 1.4 of Chapter1 of Vol. 2 (Energy) of the 

2006 IPCC Guidelines on National GHG Inventories.. This revision is in 

compliance with version 2.2.1 of the “Tool to calculate the emission factor for 

an electricity system”/. 

7.1 The evidence has been submitted. 

- Circular no.27-2009-TT-BCT issued Ministry of Industry and Trade on 

Regulating meter system/37C/ 


Conclusion 

OK. JCI received the 

information of each 

projects. The evidences 

are sufficient. CL-20 is 

closed. 


reviewed the calculation 

of the BEy. 

A1 is OK. The 

calculation is 

appropriately revised 

and the BEy is 

conservative. CL-21 is 

closed. 

OK. The evidence is 

sufficient. CL-22 is 

closed. 



Rev.No 

02.1 



CAR, 

CL 



Table-1 



Conclusion 

CL- 23 

CL- 24 

CL- 25 

Monitoring system. (p36 of PDD) 

1) It is requested to explain the 

distance from monitoring meter of 

the proposed project to substation. 

2) It is requested to explain the 

connecting point between the 

proposed project and power 

company. 

3) It should be described 

monitoring system flow scheme in 

PDD with monitoring meter. 

Monitoring diagram. (p36 of PDD) 

It is requested to provide the single 

line diagram with monitoring 

points. 

Monitoring Plan. (p36 of PDD) 


following manuals: 

1) Training manual, 

2) CDM monitoring manual, 

7.1 

7.2 

7.1 

7.2 

7.1 

7.2 

1), 2) FSR/4/, p13-3 has been reported as follows; 

- Connection point: Connect transitionally to the 110kV Lang Son - Trang 

Dinh transmission line. The connection point is 14km far away from Lang Son 

substation and 13 km from Trang Dinh substation. 

- Need to construct new items as below: 

+ 110 kV Thac Xang substation in the boundary of Thac Xang hydropower 

project 

+ the 110 kV overhead double-circuit line from 110kV Thac Xang substation 

to the connection point is about 3km 

3) The connection plan between the Project owner and the EVN is under 

negotiation. The requested explanation and description shall be made upon 

the availability of related documents. 

The single line diagram with monitoring point is now under the negotiation 

process with the power purchaser (the EVN). It will be available in the first 

verification. 

These manuals are not available in this stage. They will be available before 

operating the hydropower plant and at the first verification. 

OK. The monitoring 

scheme and 

management plan are 

reported in the Annex 4 

of the PDD. CL-23 is 

closed. 

OK. The single line 

diagram will be provided 

before first verification. 


FAR-2. 

OK. The Training 

manual and CDM 

monitoring manual will 

be available before 

operating the plant and 

at the first verification. 


FAR-3 



Rev.No 

02.1 


CAR, 

CL 

CL- 26 

CL- 27 




Stakeholder’s comments(p39 of 

PDD) 

Evidence of stakeholder’s meeting 

shall be provided. 

1) Invitation to Stakeholders' 

meeting 

2) Record of Stakeholder 

Consultation Meeting 

3) Questionnaire and Responses 

(with stakeholders' comments) 

Environmental impacts (p37 of 

PDD) 


regulation for Environmental 

Protection Law. 

Table-1 


9.1 1) Invitation letters to Stakeholders' meeting have been provided. 

- Invitation letter Hung Viet commune/68A/ 

- Invitation letter Bac La commune/68B/ 

- Invitation letter Hong Phong commune/68C/ 

2) Minutes of Stakeholder Consultation Meeting have been provided. - --- 

Minute in Bac La commune/69A/ 

- Minute in Hung Viet commune/69B/ 

- Minute in Hong Phong commune/69C/ 

3) A1: The stakeholders’ comments as well as the responses from the PO are 

provided. 

- in Bac La commune/70A/ 

- in Hong Phong commune/70B/ 

- in Hung Viet commune/70C/ 

10.1 The evidence has been provided. 

- Decree No. 80-2006 ND-CP On Guidance for the Implementation of the 

Law on Environmental Protection 2005 (vn, en)/31A/ 

- Decree No.08-2006-TT-BTNMT on Guiding Assessment of EIA report/31B/ 

A1: The Environmental Protection Law 2005 (English version)/24/ has been 

provided. 


Conclusion 

1) and 2) OK. 

3) Q1: comment of 3) 

should be provided. 

3) A1 is OK. The 

comments are well 

reported. CL-26 is 

closed. 

Q1: To be provided 

English version 

A1 is OK. JCI confirmed 

the environmental 

protection policy of Viet 

Nam is applicable for the 

project. CL-27 is closed. 



Rev.No 

02.1 



CAR, 

CL 

CL- 28 

CL-29 

CL- 30 



Measures of pollution(p37 of PDD) 

It may be clarified measures of 

pollution such as pH, COD, BOD, 

NOx, SOx, Noise etc 

Significant impacts D.2 (p39 of 

PDD) 

It may be described some 

comment or reason why not 

applicable. 

EIA Environmental impacts (p37 of 

PDD) 

It is requested to provide EIA for 

clarification of consistency with 

PDD. 

Table-1 


10.1 In PDD, we have not mentioned in details about pH, COD, BOD, NOx, SOx, 

Noise etc . We have just mentioned about those impacts in general and give 

out the solution in general way. In addition, as mentioned in PDD, those 

impacts to water (relating to pH, COD, BOD) and air (NOx, SOx and noise) 

are considered as temporary impacts and will be terminated after 

commissioning. So, we will keep the description like the current one. 

A1: Decree No. 80/2006/ND-CP dated 09/08/2006 on details of regulations 

and guidance on implementing of Environment Protection Law of Vietnam 

2005 is submitted in both Vietnamese and English versions./30/ 

The main content of the Circular No.08/2006/TT-BTNMT dated 09/08/2006 

with the English version/31/ is in the link below: 

http://vea.gov.vn/en/laws/LegalDocument/Pages/CircularNo082006TT- 

BTNMT.aspx 

10.1 In D1/1.3. Conclusion, it is said that: all the impacts will cease after 

completion of construction phase, and all the preventive and mitigation 

measures will be conducted. So, section D2 will be Not applicable. 

The reason has been described in section D2 of the PDD (latest version). 


Conclusion 

Q1: Although these 

documents are provided, 

it is difficult to 

understand them 

because only 

Vietnamese. To be 

provided English version 

A1 is OK. JCI confirms 

the requirement of 

Circular No. 08/2006/TT- 

BTNMT is the 

implementation of 

Environmental 

Protection Law of 

Vietnam. CL-28 is 

closed. 


EIA is approved by local 

government. CL-29 is 

closed. 

10.1 EIA/5/ has been provided. OK. JCI confirms the 

consistency between 

EIA and PDD for RFR. 


FAR 

Forward Action Requests 



Rev.No 

02.1 



CAR, 

CL 



Table-1 



Conclusion 

FAR-1 

Specifications of equipments 


specification data. 

4.2 The specification of turbines, generators are not indicated in the signed 

equipment contract/18/ dated 19 Jul 2011. The equipment contract only 

mentions general data of equipment as detailed in the PDD but not providing 

specification data. The specification data will be indicated in the design book 

and the name plate of equipment that are available for verifying in the first 

verification. 

7.1 The single line diagram with monitoring point is now under the negotiation 

process with the power purchaser (the EVN). It will be available in the first 

verification. 

(FAR-1 is transferred 

from CL-9) 

FAR-2 

Monitoring diagram. 

It is requested to provide the single 

line diagram with monitoring 

points. 


from CL-24) 

FAR-3 

Monitoring Plan. 


following manuals: 

1) Training manual, 

2) CDM monitoring manual, 

7.1 These manuals are not available in this stage. They will be available before 

operating the hydropower plant and at the first verification. 


from CL-25)

VALIDATION REPORT Thac Xang Hydropower Project - Nefco

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