Quick Facts

Where the impacts of the investment may be experienced.
  • Vietnam
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • Multilateral Investment Guarantee Agency (MIGA)
Status: Signed
Bank Risk Rating: A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2015-09-21
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: Goldman Sachs (Asia) LLC
The holder of the loan, grant, or other investment.
The service or industry focus of the investment. A project can have several sectors.
  • Hydropower
Potential Rights Impacts:
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
  • Cultural Rights
  • Healthy Environment
  • Housing & Property
  • Labor & Livelihood
  • Marginalized Groups
  • Right to Food
  • Right to Health
Investment Amount (USD): $ 200.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.

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Primary Source

Original disclosure @ MIGA website
Updated in EWS: 2017-07-27
Disclosure Date: 2015-05-15
Hoi Xuan Hydropower Project

Project Description
This summary covers a potential non-shareholder loan from a lender entity with the Goldman Sachs Group, Inc. arranged by Goldman Sachs (Asia) LLC (arranger) for VNECO Hoi Xuan Investment and Electricity Construction Joint Stock Company. The loan would be guaranteed by the Ministry of Finance acting for and on behalf of the Government of Vietnam to support the construction of the Hoi Xuan Hydropower Project in Vietnam. The arranger has applied for a MIGA guarantee of up to $200 million for a period of up to 15 years against the risk of non-honoring of sovereign financial obligations. The project involves the construction and operation of a 102 megawatt hydropower plant on the Ma River in the Quan Hoa district, Thanh Hoa province in northeastern Vietnam. The facility will consist of a 43-meter high dam and a reservoir with a capacity of approximately 63.7 million cubic meters at normal water levels with a standard water level of 80 meters. In addition, the project involves the construction of the spillway, an intake gate, a penstock, a discharge canal, a powerhouse, waterway routes, and access roads.
Early Warning System Project Analysis
APPLICABLE SOCIAL & ENVIRONMENTAL STANDARDS MIGA documentation identifies some potential impacts as “reservoir flooded areas, relocation, loss of agricultural land, especially land for bamboo plantation, need for livelihood restoration, threats to ethnic/cultural identities in resettlement sites [and] increased drug use and trade among construction workers.” OUR RISK ASSESSMENT Based on the World Bank Group’s Multilateral Investment Guaranteed Agency project documents, this project poses potential risks to the following human rights: • Right to Culture- This project is due to impact the existing cemetery of Thanh Xuan and Tan Son province. However, “[t]he religious ceremonies when moving ancestors’ graves will be financed by the project.” Additionally, “[a] wall has been requested by the local community [which] will be built to separate the village graveyard from the construction worker camp.” Further, bank documentation projects a “[l]oss of traditional crafts. Villagers who have preserved hand weaving and brocade or bamboo weaving skills might not be able to continue or transmit their craft after resettlement.” Further, there is a potential “erosion of downstream historical/cultural artifacts.” • Right to Food- This right is triggered due to the projected impact that “most project-affected households will be severely affected on their agricultural land. The capacity of these households to produce for their sustenance will be seriously impaired. Replacement agricultural land, the first priority stated in consultations, is an option that will be provided to both to relocated households and households affected by land loss only, in accordance with the resettlement policy framework.” While full use of the reservoir body is planned, “fishing resources are expected to decline after a few years of reservoir operation.” • Right to Freedom of Expression, Assembly and Association- Bank documentation states that “[c]ollective assets and public works are [going to be] affected in 7 communes (Thanh Xuan, Phu Xuan, Phu Son, Phu Le, Phu Thanh, Trung Thanh, Van Mai) including one elementary school, one nursery school, one commune health station, one community house.” Additionally, “[s]chool dropout rates might increase among relocated households, particularly girls, due to income shock and the peak of labor during resettlement.” • Right to Health- The right to health is expected to be impacted in a variety of ways. Firstly, a commune health station will be adversely affeted by the dam construction. Further, bank documentation states “[t]he presence of a large number of mostly male workers creates a risk of HIV/AIDS and other sexually transmitted diseases (STDs), especially for women, compounded by the risk of more prevalent drug use. Additionally, “During operation phase: The reservoir is likely to increase the presence of disease vectors. The health system will encourage use of mosquito nets. However, vulnerable households so far unaffected by mosquitoes might fail to use them. Households using rivers for their livelihoods and hygiene might use the reservoir water body for these purposes and be affected by waterborne vectors.” • Right to Housing and Property- Bank documentation states that due to reservoir flooding, “[t]he majority of households are losing houses, residential land and agricultural land (often with bamboo plantations).” Those households to be relocated have the option to choose a new location independently, or move to one of the resettlement sites. While “resettlement [is] for land only, replacement land will be provided with a Land Use Rights Certificate (LURC) at no cost to the households and in the name of both husband and wife.” The Environmental and Social Impact Assessment states that “the cumulative number of households impacted by land acquisition under each project element is 2,002 (5,839 people).” “The planned resettlement sites are located in four of the communes affected by resettlement, so that most relocated households moving to a planned site will remain within their commune of current residence, and often within the boundaries of their village.” It is estimated that 517 households “(out of 1,994 households) will have to relocate. These households reside in 30 villages and hamlets at present.” Additionally within this region, three areas of paddy fields will be flooded. • Right to Livelihood- This right is triggered because “25 existing villages, 4 hamlets, and one DSCL area in 11 communes have been identified as having livelihoods impacted by the reservoir and construction site.” The project is expected to both “physically displace […] and alter the livelihoods of several upstream and downstream communes.” Livelihoods will particularly be impacted for those working in agriculture and forestry, including on bamboo plantations. • Right to a Healthy Environment- Biodiversity is central to a healthy environment. The Environmental and Social Impact Assessment states that “[t]he creation of a physical barrier due to the Hoi Xuan dam shall directly impact aquatic life and alter species of biodiversity.” Additionally, sedimentation will be an effect of dam and reservoir construction. Further, bank documentation states that “the worker camp, in combination with the disruption of livelihoods during resettlement, also creates risks that might involve local residents of […] higher illegal drug trade and illegal wildlife trade.” • Rights of Marginalized and Discriminated Against Groups- Bank documentation states that the overall poverty incidence in villages affected by resettlement is 79 percent. Additionally, in 36 percent of affected households all members are above the age of 60 years, and “68 households have a disabled or seriously ill member.” While Vietnam does not recognize indigenous groups, the hydropower project does take place in districts with a population mainly comprised of three ethnic minority groups: the Thai from the Tay-Thai ethno linguistic family, the Muong from the Viet-Muong ethno linguistic family, and the Kinh majority; the majority of displaced households belong to Thai and Muong groups. Further, the Environmental and Social Impact Assessment claims that women will be particularly vulnerable during the construction phase of the project. “It is likely that Thanh Xuan commune would become a food and entertainment area for drivers and construction workers. The presence of such a large number of mostly male workers with few followers creates a risk of (a) HIV/AIDS and other STDs, especially for women, compounded by the risk of drug abuse, and (b) unwanted pregnancies. The pressure of followers on the local health system might result in insufficient health services available to the local population. The worker camp, in combination with the disruption of livelihoods during resettlement, also creates risks that might involve local residents of (a) prostitution.”
Investment Description
Contact Information
ACCOUNTABILITY MECHANISM OF MIGA The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/