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Document of The World Bank

Report No: ICR00003534

IMPLEMENTATION COMPLETION AND RESULTS REPORT

ON A SERIES OF DEVELOPMENT POLICY LOANS

(IDA 50400; IDA 51790; IDA 55190)

IN THE AMOUNT OF SDR 136.4 MILLION (US$210 MILLION EQUIVALENT)

TO THE

SOCIALIST REPUBLIC OF VIETNAM

FOR

CLIMATE CHANGE DEVELOPMENT POLICY OPERATIONS

September 16, 2016

Environment & Natural Resources Global PracticeVietnam Country Management UnitEast Asia Pacific Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 15, 2014)

Currency Unit = Vietnam Dong (VND) VND 1.00 = US$ .0000448

US$ 1.00 = VND 22,339

FISCAL YEAR January 1- December 31

LIST OF ACRONYMS

ADB Asian Development BankAfd Agence Francaise de DeveloppementAPRF Adaptation Prioritization FrameworkASA Advisory Services and AnalyticsCCA Climate Change AdaptationCIDA Canadian International Development AgencyCOP Conference of the PartiesCPS Country Partnership StrategyDANIDA Denmark’s Development CooperationDFAT Australian Department of Foreign Affairs and TradeDFID United Kingdom’s Department for International DevelopmentDMHCC Department of Meteorology, Hydrology and Climate ChangeDOIT Department of Industry and TradeDPs Development PartnersDPL Development Policy LoanDPO Development Policy OperationDRM Disaster Risk ManagementDRR Disaster Risk ReductionEE Energy EfficiencyEE&C Energy Efficiency and ConservationFY Fiscal yearGDE General Directorate of EnergyGDP Gross Domestic ProductGFDRR Global Facility for Disaster Reduction and RecoveryGHG Greenhouse gasGoV Government of VietnamIDA International Development AssociationIMF International Monetary FundIWRM Integrated Water Resources ManagementJICA Japan International Cooperation AgencyK-Eximbank Export-Import Bank of Korea

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LWR Law on Water ResourcesMARD Ministry of Agriculture and Rural DevelopmentMOF Ministry of FinanceMOIT Ministry of Industry and TradeMONRE Ministry of Natural Resources and EnvironmentMPI Ministry of Planning and InvestmentM&E Monitoring and EvaluationNAMAs National Adaptation Mitigation Actions NAP National Action PlanNAP-CC National Action Plan on Climate ChangeNAP-WRM National Action Plan on Water Resources ManagementNCCC National Committee for Climate ChangeNCCS National Climate Change StrategyNTP-WRM National Target Program for Water Resource ManagementNTP-RCC National Target Program to Respond to Climate ChangeODA Overseas Development AssistancePA Policy ActionPCs Peoples CommitteesPCU Program Coordinating UnitPDO Program Development ObjectivePSIA Poverty and Social and Impact AnalysisRBO River Basin OrganizationROC Regional Operations CommitteeSEDP Socio-economic Development PlanTA Technical AssistanceSP-RCC Support Program to Respond to Climate ChangeUNDP United Nations Development ProgrammeUNFCCC United Nations Framework Convention on Climate ChangeVN VietnamVNCLIP Vietnam Climate Change PartnershipVND Vietnam DongVNEEP Vietnam National Energy Efficiency ProgramWB World BankWRM Water Resources ManagementSDR Special drawing rights

Senior Global Practice Director: Julia Bucknall

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Practice Manager: Iain ShukerProject Team Leader: Christophe Crepin; Thu Thi Le Nguyen

ICR Team Leader: Maurice Andres Rawlins

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Vietnam

Climate Change Development Policy Operation

CONTENTS

Data SheetA. Basic Information……………………………………………………………………………viB. Key Dates……………………………………………………………………………………viiC. Ratings Summary……………………………………………………………………………viiD. Sector and Theme Codes…………………………………………………………………….ixE. Bank Staff…………………………………………………………………………………….xF. Results Framework Analysis…………………………………………………………………xiG. Ratings of Program Performance in ISRs………………………………………………...xxviiH. Restructuring…………………………………………………………………………….xxviii

1. Program Context, Development Objectives and Design2. Key Factors Affecting Implementation and Outcomes3. Assessment of Outcomes4. Assessment of Risk to Development Outcome5. Assessment of Bank and Borrower Performance6. Lessons Learned7. Comments on Issues Raised by Borrower/Implementing Agencies/PartnersAnnex 1 Bank Lending and Implementation Support/Supervision ProcessesAnnex 2. Beneficiary Survey ResultsAnnex 3. Stakeholder Workshop Report and ResultsAnnex 4. Summary of Borrower's ICR and/or Comments on Draft ICRAnnex 5. Comments of Cofinanciers and Other Partners/StakeholdersAnnex 6. List of Supporting Documents……………………………………………………………….41Annex 7. List of TA Supporting the DPO series MAP 43

A. Basic Information

Program 1

Country Vietnam Program NameVietnam Climate Change Development Policy

Program ID P122667 L/C/TF Number(s) IDA-50400ICR Date 09/12/2016 ICR Type Core ICRLending Instrument DPL Borrower SOCIALIST

REPUBLIC OF

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VIETNAMOriginal Total Commitment

XDR 45.20M Disbursed Amount XDR 45.20M

Implementing Agencies Ministry of Natural Resources and Environment Cofinanciers and Other External Partners: No Program 2

Country Vietnam Program NameVietnam Climate Change Development Policy 2

Program ID P127201 L/C/TF Number(s) IDA-50400,IDA-51790ICR Date 09/12/2016 ICR Type Core ICR

Lending Instrument DPL BorrowerSOCIALIST REPUBLIC OF VIETNAM

Original Total Commitment


Implementing Agencies Ministry of Natural Resources and Environment Cofinanciers and Other External Partners: No Program 3

Country Vietnam Program NameVietnam Climate Change Development Policy 3

Program ID P131775 L/C/TF Number(s) IDA-50400,IDA-55190ICR Date 09/12/2016 ICR Type Core ICR

Lending Instrument DPL BorrowerSOCIALIST REPUBLIC OF VIETNAM

Original Total Commitment


Implementing Agencies Ministry of Natural Resources and Environment Co-financiers and Other External Partners: No

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B. Key Dates Vietnam Climate Change Development Policy - P122667

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 02/24/2011 Effectiveness: 08/09/2012 08/09/2012 Appraisal: 04/13/2011 Restructuring(s): Approval: 02/02/2012 Mid-term Review: Closing: 09/30/2012 09/30/2012

Vietnam Climate Change Development Policy 2 - P127201






C. Ratings Summary C.1 Performance Rating by ICR Overall Program Rating Outcomes Satisfactory Risk to Development Outcome Moderate Bank Performance Moderately Satisfactory Borrower Performance Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Overall Program Rating

Bank Ratings Borrower Ratings Quality at Entry Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance Moderately Satisfactory Overall Borrower

Performance Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Vietnam Climate Change Development Policy - P122667

Implementation Performance Indicators QAG Assessments

(if any) Rating:

Potential Problem Program at any time (Yes/No):

No Quality at Entry (QEA) None

Problem Program at any time (Yes/No): No Quality of

Supervision (QSA) None

DO rating before Closing/Inactive status Satisfactory

Vietnam Climate Change Development Policy 2 - P127201Implementation

Performance Indicators QAG Assessments (if any) Rating:





DO rating before Closing/Inactive status Satisfactory

Vietnam Climate Change Development Policy 3 - P131775Implementation

Performance Indicators QAG Assessments (if any) Rating:





DO rating before Closing/Inactive status

Moderately Satisfactory

D. Sector and Theme Codes Vietnam Climate Change Development Policy - P122667

Original ActualSector Code (as % of total Bank financing) Energy efficiency in Heat and Power 20 20 General public administration sector 60 60 General water, sanitation and flood protection sector 20 20

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Theme Code (as % of total Bank financing) Climate change 80 80 Natural disaster management 10 10 Water resource management 10 10

Vietnam Climate Change Development Policy 2 - P127201Original Actual

Sector Code (as % of total Bank financing) Energy efficiency in Heat and Power 30 30 General agriculture, fishing and forestry sector 10 10 General public administration sector 25 25 General water, sanitation and flood protection sector 25 25 Irrigation and drainage 10 10

Theme Code (as % of total Bank financing) Climate change 100 100

Vietnam Climate Change Development Policy 3 - P131775Original Actual

Sector Code (as % of total Bank financing) Energy efficiency in Heat and Power 30 30 General agriculture, fishing and forestry sector 10 10 General public administration sector 25 25 General water, sanitation and flood protection sector 25 25 Irrigation and drainage 10 10

Theme Code (as % of total Bank financing) Climate change 100 100

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E. Bank Staff Vietnam Climate Change Development Policy - P122667

Positions At ICR At Approval Vice President: Victoria Kwakwa James W. Adams Country Director Ousmane Dione Victoria Kwakwa Practice Manager/Manager: Iain G. Shuker Jennifer J. Sara

Task Team Leader: Christophe Crepin Christophe Crepin ICR Team Leader: Maurice Andres Rawlins ICR Primary Author: Maurice Andres Rawlins

Vietnam Climate Change Development Policy 2 - P127201Positions At ICR At Approval

Vice President: Victoria Kwakwa Pamela Cox Country Director Ousmane Dione Victoria Kwakwa Practice Manager/Manager: Iain G. Shuker Jennifer J. Sara

Task Team Leader: Christophe Crepin Christophe Crepin ICR Team Leader: Maurice Andres Rawlins ICR Primary Author: Maurice Andres Rawlins

Vietnam Climate Change Development Policy 3 - P131775Positions At ICR At Approval

Vice President: Victoria Kwakwa Axel van Trotsenburg Country Director (Actin g): Ousmane Dione Victoria Kwakwa

Practice Manager/Manager: Iain G. Shuker Jennifer J. Sara

Task Team Leader: Christophe Crepin; Thu Thi Le Nguyen

Christophe Crepin; Thu Thi Le Nguyen

ICR Team Leader: Maurice Andres Rawlins ICR Primary Author: Maurice Andres Rawlins

F. Results Framework Analysis

Program Development Objectives (from Program Document)The Program Development Objective is to support the government of Vietnam in its efforts to address climate change by adopting policies and strengthening institutional capacity to promote climate resilient and lower carbon intensity development.

Revised Program Development Objectives (as approved by original approving authority)No revisions were made to the PDO.

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Indicator(s)Vietnam Climate Change Development Policy 1 - P122667

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Coordinated program with a new legal framework for integrated water management in place and operational.

Value (quantitative or Qualitative)

Water resources management activities are dispersed, poorly coordinated and overlapping; insufficient legal basis for integrated management, including at the basin level

Coordinated program with a new legal framework for integrated water management in place and operational.

See DPO3 Indicators for end of program results.

Date achieved 02/02/2012 12/31/2014Comments (incl. % achievement)

Improved but insufficient legal instruments approved to establish an IWRM-based framework for integrated water management

Indicator 2 : At least 3 irrigation management transfers piloted at secondary level


0 irrigation management schemes transferred atsecondary level

At least 3 irrigation management transfers piloted at secondary level


Date achieved 02/02/2012 12/31/2014 11/08/2012Comments (incl. % achievement)

Three irrigation management schemes being transferred at secondary level.

Indicator 3 : 100 energy auditors completed training courses to support energy efficiency practices in industrial sector, of which 50 fully certified and 50 doing on the job training to become fully certified


No energy auditors certified by thegovernment

100 energy auditors completed training courses to support energy efficiency practices in industrial sector, of which 50 fully certified and 50 doing on the job training to become fully certified



50 energy auditors have completed training.

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Indicator 4 : 1,000 energy managers certified to support energy efficiency practices in industrial sector


No energy managers certified by thegovernment

1,000 energy managers certified to support energy efficiency practices in industrial sector



250 energy managers for industries are already doing the certification process, expected to be completed by December 2012.

Indicator 5 : 1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers


No energy efficiency plans prepared bycertified energy managers

1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers



Action plans are being submitted since the effectiveness of the Circular.

Indicator 6 : Adaptation Methodology to guide prioritization is available and its application initiated


No agreed adaptation framework to prioritizeactions available

Adaptation Methodology to guide prioritization is available and its application initiated



Adaptation Prioritization Framework development initiated.

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Indicator 7 : Low carbon development assessment initiated


GHG database has been developed but nostrategic low carbon development assessment in place

Low carbon development assessment initiated



Low carbon development assessment initiated.

Indicator 8 : 100% of provinces have disaster risk management plans and 2 provinces identified for piloting of monitoring and evaluation


0% of provinces have disaster riskmanagement plans

100% of provinces have disaster risk management plans and 2 provinces identified for piloting of monitoring and evaluation



100% of provinces have disaster risk management plans.

Indicator 9 : Comprehensive legal framework for multi-hazards in place establishing a unifying legal framework for disaster risk action


Dispersed and different legal frameworks forspecific disaster risk hazards in place

Comprehensive legal framework for multi-hazards in place establishing a unifying legal framework for disaster risk action



The development of comprehensive legal framework for multi-hazards establishing a unifying legal framework for disaster risk action initiated.

Indicator 10 : National Platform in place for all stakeholders to coordinate DRR and CCA actions


Disaster Risk Reduction and Climate Change Adaptation are only coordinated on an ad hoc basis between GoV agencies, donors, research institutes,and NGOs

National Platform in place for all stakeholders to coordinate DRR and CCA actions


Date achieved 02/02/2012 12/31/2014 11/08/2012Comments Establishment of National Coordination Platform for DRR and CCA actions is

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(incl. % achievement) authorized.

Indicator 11 : Financial mechanism for using ODA for climate financing through budget support is in place


No financial mechanism for allocating budget from MOF to Line Ministries for climate action

Financial mechanism for using ODA for climate financing through budget support is in place



Principles guiding the set-up of a Financial Mechanism for climate action have been issued by the Prime Minister.

Indicator 12 : Task force facilitates information sharing, coordination of and access to climate finance including market-based instruments.


No government unit responsible for facilitating access to climate change financing

Task force facilitates information sharing, coordination of and access to climate finance including market-based instruments.



Task Force created to facilitate information sharing, coordinate and provide access to climate finance (including market-based instruments).

Indicator(s)Vietnam Climate Change Development Policy 2 - P127201



approval documents)




Indicator 1 : Three legal instruments approved have established an operational IWRM-based framework for integrated water management


Insufficient legal and institutional basis for integrated water resources management

Three legal instruments approved have established an operational IWRM-based framework for integrated water management

See DPO3 indicators for end of program results.

Date achieved 02/02/2012 12/31/2014 06/30/2014Comments The 2012 Water Law is now effective. The Implementation Decree of Water

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(incl. % achievement)

Law and the NAP-WRM have been issued by the PrimeMinister. The Decree on Administrative Sanction was issued by the PM on October 24, 2013.

Indicator 2 : Minimum flows established for the Vu Gia-Thu Bon, the Ba and the Se SanRivers and being used to guide water allocations decisions during the dryseason


Minimum flows established for the Vu Gia-Thu Bon, the Ba and the Se San Rivers and being used to guide water allocations decisions during the dry season



The Prime Minister has issued an instruction to develop an operation manual for hydropower in the Vu-Gia Thu Bon and Ba Rivers based on minimum flows and operating rules are being developed.

Indicator 3 :

Three WUAs functional in three pilot irrigation schemes managing secondarycanals serving 1,500 hectares (sites are Phu Ninh scheme in Quang Namprovince, Ke Go scheme in Ha Tinh province and Cau Son-Cam Son schemein Bac Giang province)


No irrigation management schemes transferred atsecondary level

Three WUAs functional in three pilot irrigation schemes managing secondary canals serving 1,500 hectares (sites are Phu Ninh scheme in Quang Nam province, Ke Go scheme in Ha Tinh province and Cau Son-Cam Son scheme in Bac Giang province)



Indicator was dropped.

Indicator 4 : 4% of energy saving by heavy industryValue (quantitative or Qualitative)

4% of energy saving by heavy industry


Date achieved 02/02/2012 12/31/2014 06/30/2014Comments (incl. %

TA will be provided to MOIT to determine 2014 savings based on data collected and calculations.

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achievement)

Indicator 5 : 100 energy auditors completed training courses to support energyefficiency practices in industrial sector, of which 50 fully certified and 50 doing on the job training to become fully certified



100 energy auditors completed training courses to support energyEfficiency practices in industrial sector, of which 50 fully certified and 50 doing on the job training to become fully certified



MOIT reports that more than 160 individuals participated in energy audit training; of which 50 energy auditors have been certified, and the rest undertaking on-the-job training.







650 energy managers have been certified.

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Indicator 7 : 1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers


No energy efficiency plans prepared bycertified energy managers

1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers



900 energy efficiency plans and implementation reports of large energy end-users of the industrial sector were received by MOIT or provincial DOITs.

Indicator 8 : Adaptation Prioritization Framework in the context of the SEDP is operational at MPI and implementation is initiated under the current 5 year SEDP plan


No agreed adaptation framework to prioritize actions available at MPI

Adaptation Prioritization Framework in the context of the SEDP is operational at MPI and implementation is initiated under the current 5 year SEDP plan


Date achieved 02/02/2012 12/31/2014 06/30/2014Comments (incl. % achievement) Indicator 9 : Low carbon development options have been identified and prioritized


GHG database has been developed but nostrategic low carbon development assessment in place

Low carbon development options have been identified and prioritized


Indicator was dropped.

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Indicator 10 : 100% of Provinces have disaster risk management plans and implementation ison-going


0% of provinces have disaster riskmanagement plans

100% of Provinces have disaster risk management plans and implementation ison-going



100% of Provinces have disaster risk management plans and implementation ison-going.

Indicator 11 : Comprehensive legal framework for multi-hazards in place establishing aunifying legal framework for disaster risk action is operational


Dispersed and different legal frameworks forspecific disaster risk hazards in place

Comprehensive legal framework for multi-hazards in place establishing aunifying legal framework for disaster risk action is operational



The Law on Natural Disaster Prevention was finalized and adopted by the National Assembly on June 19, 2013.

Indicator 12 :National Coordination Platform in place under the NCCC for all stakeholders to coordinate DRR and CCA action, with evidence of improvement in planning, monitoring and reporting


Disaster Risk Reduction and Climate Change Adaptation are only coordinated on an ad hoc basis between GoV agencies, donors, research institutes,and NGOs

National Coordination Platform in place under the NCCC for all stakeholders to coordinate DRR and CCA action, with evidence of improvement in planning, monitoring and reporting



Under the leadership of the Prime Minister and in the context of the NCCC MARD and MONRE jointly organized a high level forum on DRR and CCA with a major event held on October 16, 2013.

Indicator 13 :A Financial Mechanism for climate change action with transparent allocationplanning and reporting process is in place and operational resulting in additional dedicated financing available for climate action

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No additional Financial Mechanism forallocating budget from MOF to Line Ministries for climate change action

A Financial Mechanism for climate change action with transparent allocationplanning and reporting process is in place and operational resulting in additional dedicated financing available for climate action



i) Financial Mechanism created and first year of budget allocated. ii) Climate public expenditure review under implementation at the request of the Prime Minister.

Indicator 14 : Climate Finance Task force facilitates information sharing, decision making, coordination of and access to climate finance


No government unit responsible for facilitating access to climate change financing

Climate Finance Task force facilitates information sharing, decision making, coordination of and access to climate finance


Date achieved 02/02/2012 12/31/2014

Comments (incl. % achievement)

The Inter-ministerial Circular guiding the implementation of the SP-RCC Mechanism to manage the climate change financial resources for selected investments in support of climate change adaptation and GHG emission reduction was jointly issued by three Ministers (MOF, MONRE, and MPI) on March 5, 2013.

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approval documents)




Indicator 1 : Three new high level legal IWRM instruments are operational with priority actions taken.


Insufficient legal and institutional basis for integrated water resources management needed for CCA

Three new high level legal IWRM instruments are operational with priority actions taken.

Three new high-level legal IWRM instruments operational with priority actions taken: (a) New Law on Water Resources, (b) National Action Plan for Water Resources Management, and (c) Implementation Decree of the Law on Water Resources.


Fully Achieved. The GoV adopted the new Law on Water Resources in 2012, and the Law is made operational through an Implementation Decree of the Law on Water Resources issued in November 2013 by the GoV. The implementation Decree provides instruction for applying new concepts in the Law such as water user consultations and water fees, and makes the legal provisions more specific. Within Vietnam’s legal system, Laws are the highest form of legal direction, and require Decrees, which are further supplemented by Regulations and Decisions, for their implementation; see Annex 6 for document on Vietnam legal framework. The third legal instrument is the National Action Plan on Water Resources Management (NAP-WRM), issued through a Prime Ministerial Decision in January 2014, and is also important for helping to implement the new Law. The Action Plan includes a list of priority projects for implementation between 2014 and 2020, and specifies the mechanisms for implementation of the plan by different state agencies, and provides details on financing the implementation of the plan in Section IV of the Plan document. Implementation of the projects has started. One of the first priority actions taken as a result of these instruments was the establishment of minimum flow regulations for major rivers which is a mandate of the new Law. The GoV established and issued minimum flow values for the Red River, Vu Gia-Thu Bon, Ba, Sesan, Seprok, Kon-Ha Thanh, and Tra Khuc River Basins. Other priority actions from the NAP-WRM that are being implemented include:

i. Undertaking of national water censuses for 2015; ii. Inventory, assessment and mapping of water resources in river basins,

the areas of water shortage and critical areas – ongoing activities include inventorying of surface and underground water in Hanoi, and

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inventorying of surface water at the Vietnam-Laos border areas; iii. Development of sector and local master plans on water resources;iv. Development of a management information system and database on

water resources and water resources monitoring in river basins;v. Development of water protection corridors – the DWRM is developing

the first draft Circular on setting water protection corridors; vi. Assessment of water use and discharge of water waste into water

flows.

Indicator 2 : Minimum flows established for the Vu Gia-Thu Bon and Ba Rivers and used to guide water allocations during the dry seasons.


No minimum flow values exist.

Minimum flows established for the Vu Gia-Thu Bon and Ba Rivers and used to guide water allocations decisions during the dry seasons

Minimum flow values were established for the Vu Gia-Thu Bon and Ba Rivers, and are used to guide water allocations decisions during the dry seasons

Date achieved 02/02/2012 12/31/2014 07/15/2016


Fully Achieved. Minimum flows for the Vu Gia Thu Bon and Ba Rivers were established. These minimum flow values are included in Prime Ministerial Decision 1537 issued in July 2015 and Decision 1077 issued in May 2014 for guiding water flows from inter-reservoirs on the Vu Gia Thu Bon and Ba Rivers during the dry season. The Prime Ministerial Decisions provide the legal mandate for the use of the minimum flow values to guide water allocation decisions during the flood and dry seasons, and so the indicator is considered to be achieved. The setting of minimum water levels provided in the Prime Minister’s Decisions is needed to help address increasingly serious conflicts of water used upstream by hydro-power plants and downstream for agriculture and livelihood activities. Since completion of the DPO, minimum flow values have also been established for other rivers. For example, flows for the Thu Bon River were included in the Instruction 205/UBND-KTN on January 15, 2016 by the Quang Nam people’s committee on water discharge in reservoirs as a “solution to prevent from drought and respond to climate change in dry season.” Similar solutions have been produced by other provinces - Gia Lai, Kon Tum, Phu Yen and Da Nang; see Annex 6 for document references on these.

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Indicator 3 : 4% energy savings by heavy industries compared to baseline (forecast under business as usual scenario)


2010 (end of VNEEP 1)level of energy use byheavy industry (6,701kToe1 BAU2 per JICA's "A Study on National Energy Master Plan)

4% energy savings by heavy industries compared to baseline (forecast under businessas usual scenario)

Approximately 5% estimated energy savings pending final assessment.

Date achieved 02/02/2012 12/31/2014 09/12/2016


Likely exceeded (actual value achieved pending final assessment). The General Directorate of Energy (GDE) estimated 5% energy savings were achieved meaning that the target is expected to be met or surpassed. The MOIT, with technical support of DANIDA is undertaking an assessment of energy efficiency savings by heavy industries. Assurances were provided to the Bank by the MOIT that the energy assessment and report would be completed by April 2016. However, due to a number of delays resulting from securing adequate data, the completion of this report is delayed.

Indicator 4 : 100 energy auditors completed training to support energy efficiency practices in industrial sector, of which 50 fully certified and 50 doing on-the-job training to become fully certified.



100 energy auditors completed training to support energy efficiency

250 energy auditors fully certified by the MOIT

Date achieved 02/02/2012 12/31/2014 07/11/2016


Exceeded by 150%. The value of 250 fully certified energy auditors was provided by the GDE of the MOIT. The GDE is legally required through Circular 39 issued in October 2011 to record and archive a list of all certified energy auditors. This is 2.5 times higher than the training goal and 5 times higher than the certification goal.





2,500 energy managers certified by the MOIT

Date achieved 02/02/2012 12/31/2014 07/11/2016


Fully Achieved. The value of 2,500 certified energy managers was provided by the GDE of the MOIT. The GDE is legally required through Circular 39 issued in October 2011 to record and archive a list of all certified energy managers. The GDE confirmed that the certified energy managers belong to the private sector.

1 Kiloton of oil equivalent2 Business as usual

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Indicator 6 : 1000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers.


No energy auditors or managers certified by thegovernment

1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers.

1,725 energy efficiency plans and implementation reports (prepared by certified energy managers) received from large energy end-users of the industrial sector

Date achieved 02/02/2012 12/31/2014 07/11/2016


Fully Achieved. The value of 1,725 energy efficiency plans and implementation reports received from large energy end-users of the industrial sector was provided by the GDE of the MOIT. The GDE confirmed that these plans, due to their highly technical nature, are prepared by energy managers.

Indicator 7 : An Adaptation Prioritization Framework is operational within MPI SEDP annual cycles and initial implementation reflected in MPI SEDP annual guideline frameworks and budget reports.


No agreed tool in place within the MPI SEDP process to plan and prioritize climateadaptation action

An Adaptation Prioritization Framework is operational within MPI SEDP annual cycles and initial implementationreflected in MPI SEDP annual guideline frameworks and budget reports.

Adaptation Prioritization Framework is operational and being used in planning including annual SEDP

Date achieved 02/02/2012 12/31/2014 07/01/2016


Fully Achieved. The Adaption Prioritization Framework (APRF) was made operational within MPI SEDP annual cycles by the issuance of MPI Decision 1485 of October 2013 which adopts the APRF as a tool for used in socio-economic development planning. The APRF has been incorporated by MPI in the 2014 and 2015 socio-economic development plan (SEDP) annual guideline frameworks. It helped MPI and DPIs in identification of the climate change priorities for the 2016-2020 SEDP. The APRF has also been used to develop the Decision Support Tool to guide the identification of no-regret investment for financing under the Mekong Delta Adaptation and Livelihoods Project (with IDA funding). This indicator was modified during the preparation of DPO2, and further modified during the preparation of DPO3, and then fully achieved.

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Indicator 8 : Provinces have disaster risk management and reduction (DRR) plans under implementation as reflected in the Government Report on Evaluation of 5 years implementation of the National Strategy for DRM


No province has disaster risk management and reduction plans in place

Provinces have disaster risk management and reduction (DRR) plans under implementation as reflected in theGovernment Report on Evaluation of 5 years implementation of the National Strategy for DRM

All 63 of provinces had DRR plans under implementation


Fully Achieved. The National Strategy for DRM Implementation report from 2009 to 2013 documents the implementation progress of DRR plans in all 63 provinces. The next implementation report is expected in 2017.

Indicator 9 : A comprehensive unified legal framework to address climate hazards is operational enabling a stronger focus on DRR.


Addressing disaster risk hazards relies on dispersed and diverse legal frameworks

A comprehensive unified legal framework to address climate hazards is operational enabling a stronger focus on DRR.

The new Law on Disaster Prevention and Control provides a comprehensiveunified legal framework to address climatehazards is operational and enables a stronger focus on DRR


Fully Achieved. A new Law on Natural Disaster Prevention and Control was adopted by the VN National Assembly in June 2013. The new Law provides an overarching framework for many small pieces of DRR legislation, and provides clear structure and guidance to aspects of DRR planning and integration, financing, and coordination that were previously absent from the DRR policy framework. Guidance is provided under the Law for the content of disaster prevention and control plans for communes, districts, provinces, ministries/ sectors and at the national scale, as well as for “how,” and “who” is responsible for the integration of natural disaster prevention and control contents into sectoral development, socio-economic development plans and master plans. Financing of DRR is outlined in the Law, giving guidance for financing from the State budget, and also promoting private sector financing. The operationalization of the Law is supported by Decree No. 66/2014/ND-CP regulating the detailed guide to the implementation of some articles of the

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Law.

Indicator 10 : Additional financial resources are mobilized for climate action, planned according to priorities and a multi-sector allocation process, and reported subsequently.


No additional FinancialMechanism for allocatingbudget for climate changeaction

Additional financial resources are mobilized for climate action, planned according to priorities and a multi-sector allocation process, and reported subsequently.

The adoption of Circular 03/2013/TTLT-BTNMT-BTC-BKHDT provided clear guidance on management of the climate change financial mechanism facilitating the increase in budget allocation from VND 315 billion in 2013 to VND 3,000 billion in 2015 to climate change.

Date achieved 02/02/2012 12/31/2014 09/01/2015


Fully Achieved. A joint circular issued by the Ministry of Natural Resources and Environment (MONRE), Ministry of Finance (MoF), and MPI in March 2013 provided guidance on management of a new Climate Change Financing Mechanism, including priority planning and sectoral allocation. The state budget funds allocated to climate change projects/programs was increased from VND 315 billion in 2013 to VND 3,000 billion in 2015 specifically under the climate change Financing Mechanism Decision on additional resources under the financing mechanism was made by the National Climate Change Committee chaired by the Prime Minister with the participation of line ministries’ ministers. The circular specifies the reporting regime of activities financing under the climate change financing mechanism. This indicator was modified during the preparation of DPO2, and further modified during the preparation of DPO3, and then fully achieved.

G. Ratings of Program Performance in ISRs

Vietnam Climate Change Development Policy - P122667

No. Date ISR Archived DO IP

Actual Disbursements(USD millions)

1 06/13/2012 Satisfactory Satisfactory 70.00

Vietnam Climate Change Development Policy 2 - P127201No. Date ISR

ArchivedDO IP Actual

Disbursements

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(USD millions) 1 12/31/2012 Satisfactory Satisfactory 70.00


No. Date ISR Archived DO IP

Actual Disbursements(USD millions)

1 09/30/2015 Moderately Satisfactory Satisfactory 70.00

H. Restructuring (if any) Not applicable.

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1. Program Context, Development Objectives and Design

1.1 Context at Appraisal

1. This programmatic development policy operation (DPO) series consisted of three operations to provide support to climate change policy reforms in Vietnam . The support to policy reforms provided by the DPO series were in the context of efforts being made by the Government of Vietnam (GoV) to take action on building the country’s resilience to climate change, and on contributing to mitigation of climate change through reducing greenhouse gas (GHG) emissions.

2. Vietnam is one of the most vulnerable countries to the effects of climate change. Vietnam’s extensive coastline, vast deltas and floodplains, and location on the path of typhoons and the Southeast Asian monsoon imply that many parts of the country such as the low-lying Red River and Mekong Deltas are exposed to sea level rise (SLR) and weather extremes brought on by climate change. Over the past 50 years, Vietnam has experienced a 20-cm rise in sea level and a 0.5°C increase in average temperature. The GoV’s 2012 climate change and sea level scenarios for 2100 project an additional 2-3°C mean temperature rise and a 57-73 cm sea level rise.3,4 Figure 1 shows the scope of some of the serious climate change impact challenges that Vietnam faces. 5 Vietnam is also sensitive to climatic changes as its economy, especially the agriculture sector, is dependent on climate; natural disasters already result in annual economic losses equivalent to 1.5% of gross domestic product (GDP).6 Impacts on the availability of water resources are of major concern as increase in drought incidence in certain areas directly affects agriculture, water supply in both rural areas and cities, and hydropower generation. Further, Vietnam is also expected to experience increased saltwater intrusion and coastal erosion which will negatively impact agricultural productivity, aquaculture production, and increase the vulnerability of coastal cities.7 In addition, the

3 Ministry of Natural Resources and Environment (MONRE), 2011, “Vietnam National Strategy on Climate Change”.4 MONRE 2011, “Update to the Climate Change and Sea level Rise Scenarios”.5 McElwee et al. 2010, “The Social Dimensions of Adaptation to Climate Change in Vietnam”. Development and Climate Change Discussion Paper No. 17 Washington DC: World Bank6 GDP figures are for the period 2001-2010. Data from MONRE 2011 National Climate Change Strategy7 World Bank (WB), 2013, “Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case for Resilience”.

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Figure 1: Distribution of climate hazards in Vietnam

Source: McElwee et al. 2010

country’s limited resilience and risk mitigation strategies reduced its adaptive capacity to respond to climate change impacts.8

3. Vietnam’s total GHG emissions are projected to triple by 2030 relative to 2010, with energy becoming the largest source of emissions. Total emissions were projected to have reached 169.2 million tons of CO2-equivalent in 2010 (Figure 2), with the energy, industrial, and transport sectors accounting for the bulk of the increase in GHG emissions, overtaking the agricultural sector. By the year 2030, energy demand will almost triple relative to 2010. In addition to high energy demand, energy intensity showed an increasing trend: the energy intensity of Vietnam’s economy grew from 387 kilograms of oil equivalent (kgoe) per US$1,000 of GDP in 1998 to 573 kgoe in 2007 (in 2000 dollars) which was higher than the energy intensities of China, Indonesia, Malaysia, Thailand, and South Korea.9

4. The GoV made significant steps in 2008 to take action on climate change including on climate policy reform. Recognizing that the high vulnerability to climate change was a challenge to the economic growth path pursued after the Đổi Mới process, the GoV established a National Target Program to Respond to Climate Change (NTP-RCC) in 2008, which focused on increasing adaptive capacity to climate change. The NTP-RCC covered the period 2009 – 2015, and its main objective was the integration of climate change actions into development strategies, programs and plans in all sectors via a unified platform.

5. Further steps were taken by the GoV in 2009 to improve coordinated action on climate change through the establishment of the Support Program to Respond to Climate Change (SP-RCC). In 2009, the Vietnam government established the SP-RCC10 to support the implementation of the NTP-RCC by serving as a platform for coordinating climate change policy 8 A 2011 World Bank report on Climate Resilient Development in Vietnam noted that although the Vietnamese government and other stakeholders have adopted various strategies and instruments to manage climate risks, these have not been complete and not always cost-effective.9 WB, 2011. Climate resilient development in Vietnam: Strategic directions for the World Bank.10 The SP-RCC was designed as a partnership between the GoV and donors in support of the development and implementation of climate change related policies and strategies consistent with the NTP-RCC.

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Figure 2: Vietnam GHG Emissions Predictions

Source: Vietnam 2nd National Communication to UNFCCC, 2010

dialogue among sectors and ministries and prioritizing and formulating climate change actions. SP-RCC serves as a forum for policy discussion with interested development partners. International donor support under the SP-RCC in the form of central budget support came initially from Japan and France11; the World Bank was asked to join in the first place, but actually only joined the climate budget support a bit later through this DPO series in 2011. SP-RCC also supports line ministries in coordinating technical assistance from development partners especially for the development of policy actions included in the program.

6. Rationale for Bank Assistance. Climate change was a priority for the World Bank in the FY12-16 Country Partnership Strategy (CPS) and, with that, engagement dialogue with the Government and development partners - through analytical work and technical assistance - was growing. This included an assessment report of various strategies on how the World Bank could prioritize and implement assistance on Vietnam’s climate change agenda published in 2011.12 The report highlighted key areas of support to Vietnam that included, inter alia, improving water resources management and natural disaster risk management for adaptation, and improving energy efficiency for mitigation. It also supported the dialogue with the Government and Development Partners about joining the emerging policy development platform and contributed to the structuring of the policy program (SP-RCC) further. Such an engagement was innovative at that time, and World Bank knowledge and experience with DPOs was considered an important value-addition by both the Government and the DPs. Priority areas of technical assistance and advisory services were also identified to complement the NTP-RCC of the Government, leading to the development of the World Bank technical assistance (TA) program Vietnam Climate Change Partnership (VNCLIP) financed by a Trust Fund supported by the UK Department for International Development (DFID). Guided by the findings and conclusions of this assessment report, the Bank developed a programmatic series of three single-tranche DPOs to contribute to climate change related policy reform in Vietnam. The policy areas supported by the DPO series were supportive of the Bank’s FY12-16 CPS which aimed to promote investments and policies that increased the sustainability of Vietnam’s development, and efforts to improve resilience in the face of economic and climate shocks.

1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved) 7. The original PDO was to support the government of Vietnam in its efforts to address climate change by adopting policies and strengthening institutional capacity to promote climate resilient and lower carbon intensity development.

8. The operation was implemented across three pillars focused on: Adaptation (Pillar A); Mitigation (Pillar B), and Cross-cutting climate change polices and institutional readiness to formulate, prioritize, finance, implement and monitor cross-cutting climate change policies (Pillar C).

11 Funding through Japan International Coordination Agency (JICA) and Agence Française de Développement (AFD) of Japan and France respectively.12 World Bank, 2011. ‘Climate-Resilient Development in Vietnam: Strategic Directions for the World Bank.

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9. The following program results and indicators were agreed in during appraisal and included in the program document for DPO 1:

Table 1 : Original Program Results and Indicators by Pillar

Pillar Results IndicatorsA Strengthened legal and

organizational arrangements for programmatic, integrated and adaptive approach to water resources management.

1) Coordinated program with a new legal framework for integrated water management in place and operational

2) At least three irrigation management transfers piloted at secondary level

B Practices to strengthen energy efficiency are implemented in large energy users of the industrial sector

3) 100 energy auditors completed training courses to support energy efficiency practices in industrial sector, of which 50 fully certified and 50 doing on-job training to become fully certified

4) 1,000 energy managers certified to support energy efficiency practices in industrial sector

5) 1,000 energy efficiency plans and implementation reports of large energy end-users of the industrial sector are received by Ministry of Industry and Trade (MOIT) or provincial Departments of Industry and Trade (DOITs), of which 600 have been prepared by certified energy managers

C Scientific analytical and methodological basis and monitoring capacity guiding the development of priority actions and targets for climate change has improved.

6) Adaptation Methodology to guide prioritization is available and its application initiated

7) Low carbon development assessment initiated

8) 100% of provinces have disaster risk management plans and 2 provinces identified for piloting of monitoring and evaluation

9) Comprehensive legal framework for multi-hazards in place establishing a unifying legal framework for disaster risk action

10) National Platform in place for all stakeholders to coordinate disaster risk reduction (DRR) and climate change adaptation (CCA) actions

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Pillar Results Indicators

C Climate finance is planned according to priorities and a multi-sectoral allocation process and reported subsequently

11) Financial mechanism for overseas development assistance (ODA) for climate financing through budget support is in place

12) The Climate Change Task force facilitates information sharing, coordination of and access to climate finance including market-based instruments

1.3 Revised PDO and Key Indicators, and Reasons/Justification 10. The PDO remained consistent throughout the DPO series.

Program Results Indicator Changes from the Original Results Framework (refer to Table 1)

11. Indicator 1 “Coordinated program with a new legal framework for integrated water management in place and operational” was modified. The indicator was modified to “Three new high level legal integrated water resources management (IWRM) instruments are operational with priority actions taken” by DPO3. The modification of the indicator improves on the measurability of the indicator by specifying the number of IWRM policy instruments, and thereby the ability to assess whether the PDO was achieved. The addition of ‘Priority actions’ was to indicate planning by the GoV to support the operationalization.

12. Indicator 2 “At least three irrigation management transfers piloted at secondary level” was dropped. At the time of the preparation of DPO2, only it was requested to remove benchmarks or to recast them as prior actions. It was on this basis that Indicator 2 related to irrigation (a DPO1 benchmark that was not recast as prior action because of insufficient readiness of the Government) was dropped in DPO3 to further improve the results framework.

13. The indicator “Minimum flows established for the Vu Gia-Thu Bon and Ba rivers and used to guide water allocations decisions during the dry season” was added under Pillar A in DPO2 to help assess outcomes in water resources management (WRM) linked to the new Law and the national action plan (NAP). Establishment of minimum flows is a crucial step in demonstrating the improved ability of the GoV to protect the basic rights to water of lower river communities and some basic levels of environmental health, thereby also restoring the natural resilience of the river systems, an important adaptive action in a changing climate. This was added to help capture evidence of the Law leading to changes on priority actions and also to contribute to the outcome on addressing climate change.

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14. The indicator “4% energy savings by heavy industries compared to baseline (forecast under business as usual scenario)” on energy efficiency was added under Pillar B in DPO2. This new indicator was added at the request of the Regional Operations Committee (ROC) Chair to measure the impact of Vietnam National Energy Efficiency Program (VNEEP) activities, policy actions and projects on energy savings achieved by targeted industries.

15. Indicator 7 “Low carbon assessment initiated” was dropped. In accordance with guidance on the use of benchmarks (see above), the indicator on low carbon assessment was dropped from the policy and results framework as it was related to a benchmark no longer part of the policy matrix.

16. Indicator 10 “National platform in place for all stakeholders to coordinate DRR and CCA actions” was dropped. Following a series of high-level discussions, the Government decided not to proceed with establishing a formal separate Platform, and on this basis the indicator was dropped from the policy and results framework. Coordination of the DRR and CCA was however guided and facilitated by the GoV through the National Climate Change Committee chaired by the Prime Minister with line ministries’ ministers as members.

17. Indicator 11 “Financial mechanism for overseas development assistance (ODA) for climate financing through budget support is in place” was modified in DPO2 and DPO3 to reflect not only that a financial mechanism was in place, but that additional financing was mobilized, which would reflect how the system was working.

18. Indicator 12 “Task force facilitates information sharing, coordination of and access to climate finance including market-based instruments” was dropped in DPO3 . It was noted that the policy and results framework could be improved by framing program results as outcomes rather than outputs, and listed results items which are inputs, or identical to the prior actions should be removed. In this case the Task Force was seen as an input to the expected end of program result of “Financial resources for climate change action are mobilized and planned according to priorities and a multi-sector allocation process and reported subsequently” under Pillar C. It was on this basis that the indicator was dropped from the policy and results framework.

1.4 Original Policy Areas Supported by the Program (as approved):

19. The CC DPO program throughout the series supported a set of policy actions intended to help develop the policy and institutional frameworks for addressing climate change in Vietnam. Under the GoV’s leadership, policy actions were jointly discussed and agreed with the GoV and development partners (DPs) involved in the SP-RCC via sector working groups led by MONRE and line ministries, including Ministry of Agriculture and Rural Development (MARD), MOIT, MPI and Ministry of Finance (MOF). The policy areas supported by the DPO series are summarized below.

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20. Pillar A: Adaptation. The water sector was chosen as a focal area for adaptation policy reforms due to the urgency of its adaptation challenges and interlinkages with most other adaptation sectors including agriculture which accounted for 80 percent of surface water use in 2009. Much of Vietnam is projected to become wetter in the rainy season and drier in the dry season. An average increase for the country was projected to be about 7 percent by 2100. Rainfall during the dry season is expected to decrease in most zones, thus creating potential for more severe droughts. Seasonally, water could become more of a limiting factor if rainfall becomes more concentrated in the rainy season and if the dry season becomes more pronounced13. In addition to climate-related pressures on the sector, management inefficiencies in the water sector challenged Vietnam’s ability to meet future projected water uses. Despite an elaborated policy framework comprising over 300 regulations, water sector management in Vietnam was challenged by unsustainable exploitation and use of water resources, water pollution, disconnect between the national policies and practice at the local levels, and overall lack of policy and institutional coordination within the water sector. Accordingly, issues to be addressed under Pillar A were the need for (i) improving the planning for water resources use by different sectors; (ii) improving the use of climate change information in planning and decision-making for water resources management; and (iii) improving coordination of water resources management between and within river basins.

21. Pillar B: Mitigation. There is general recognition and consensus that reducing emissions by following a scenario of low-carbon economic development can reap benefits for the country, such as reduced energy use, lower cost, newer and more competitive technology, and reduced air pollution. Analyses of theoretical mitigation potential options showed that interventions to improve energy efficiency produce a double win of generating both GHG reduction benefits (4 MtCO2e per year) and a profit through energy savings. Accordingly, the GoV under the MOIT has articulated its pathway for transitioning to a low carbon economy through (i) developing an energy policy framework that promotes and enables energy efficiency measures, and (ii) engaging in an ambitious 10-year (2006-2015) energy efficiency program14 with specific targets for energy reduction. Policy support provided through this DPO series for selected policies of the framework were intended to help enable technical capacity increases within the heavy industry sector for EE, and contribute sector wide to energy savings from 2012 to 2015 (compared to forecast energy demand in the national electricity development plan period 2011 - 2020). Accordingly, the key issue addressed under this Pillar was the need to enhance human resource capacity of heavy industry to implement the Law on energy efficiency and conservation in order to scale up energy efficiency activities in Vietnam. Scarcity of local experts with energy efficiency technical skills was identified as a main weakness of Phase 1 of the VNEEP15.

13 WB, 2011, “Climate resilient development in Vietnam: Strategic directions for the World Bank”.14 The VNEEP is a ten year program, which was approved in April 2006 by the Prime Minister of Viet Nam. It is a targeted national program that aims to institute measures for improving energy efficiency and conservation across all sectors of the Vietnamese economy, with energy saving targets of 3-5% during the period 2006 – 2010, and a further 5-8% during the period 2011 - 2015.15 The VNEEP was designed to reduce the national total energy consumption by 3% to 5% between 2006 and 2010 (Phase 1), and by 5% to 8% between 2011 and 2015 (Phase 2), by developing a comprehensive set of activities to improve energy efficiency and conservation in all economic sectors.

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22. Pillar C: Cross-Cutting Climate Change Policies and Institutional Readiness to Formulate, Prioritize, Finance, Implement and Monitor Cross-Cutting Climate Change Policies. Planning for climate change was important in the Vietnam context where several sectors tied to economic development were already being affected by climate change. Different actions were needed, but in the context of limited resources the actions selected should be prioritized. And there was the need to ensure that development is climate informed to avoid making sectors more vulnerable to climate change. Building on a number of key initiatives such as the development of climate action plans by line ministries, the main issues addressed under Pillar C included (i) the need for a framework for strategically planning and implementing climate actions; (ii) the need for a mechanism for multi-sectoral and multi-stakeholder coordination and cooperation on climate change and disaster risk actions; and (iii) the need for a process for strategically mobilizing, allocating and channeling resources for climate change action in order to increase the scope of the GoV’s climate change program of activities.

1.5 Revised Policy Areas (if applicable)

23. Policy areas remained consistent throughout the program. There was no revision.

1.6 Other significant changes

24. There were no other significant changes. The institutional setup and arrangements for the project remained the same throughout the DPO series, including the leadership role played by the National Committee for Climate Change (NCCC) once created, the coordination role played by MONRE, the management role of the program coordinating unit (PCU) situated in MONRE, and the support provided by development partners involved in climate policy reforms. Line ministries were responsible for delivering the policy actions and achievement of the end-of-program indicators. This sustained engagement and consistency helped to ensure that there were no significant changes in the DPO series’ design or content, and that implementation progress was steady.

2. Key Factors Affecting Implementation and Outcomes

2.1 Program Performance

Table 2 : Status of Prior Actions for DPO Series

Pillar Prior Actions Status (Policy action delivered/ not

delivered)DPO 1

A: Adaptation The GoV has developed a National Target Program for Water Resources Management (NTP-WRM) based on the Water Sector Review16.

Delivered

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delivered)B: Mitigation Submitted the Decrees to implement and to enforce the Law on

Energy Efficiency and Conservation submitted17.Delivered

C: Cross-cutting

Updated provincial level climate change scenarios18. DeliveredDeveloped provincial disaster risk management plans for all provinces19.

Delivered

Approved guiding principles related to the Financial Mechanism for using ODA for climate financing through budget support20.

Delivered

DPO 2A: Adaptation The GoV has developed a New Law on Water Resources (LWR)21. Delivered

B: Mitigation Adopt regulations establishing qualifications and certification of energy auditors and energy managers22.

Delivered

C: Cross-cutting

Develop National Climate Change Strategy guiding GoV actions on climate change23.

Delivered

Authorize the establishment of the National Coordination Platform for Disaster Risk Reduction and Climate Change Adaptation24.

Delivered

Develop institutional mechanism to promote climate financing sources25.

Delivered

DPO 3A: Adaptation Adopt the National Action Plan on Water Resources Management

(NAP-WRM) that prioritizes actions and defines responsibilities and timeline for implementation26.

Delivered

Adopt the Implementation Decree of the Law on Water Resources27.

Delivered

B: Mitigation Adopt the Circular guiding the implementation of energy efficiency measures in at least one key energy intensive industrial sector28.

Delivered

C: Cross- Adopt the National Action Plan for Climate Change29. Delivered

16 Letter No 2786/BTNMT-KH, July 28, 201017 Decree Number 21/2011/ND-CP, March, 201118 Report on Updated Climate Change Scenarios19 Official Instruction Number 1820/TTg-KTN, September, 200920 Instruction Number 8981/VPCP-QHQT, December, 201021 Law Number 17/2012/QH13, June, 201222 Circular No. 39/2011/TT-BCT, October, 201123 Decision Number 2139/QD-TTg, December, 201124 Decision Number 6853/VPCP-QHQT, September, 201225 Decision Number 505/QD-BKHDT, April, 201226 Decision Number 182/QD-TTg, January, 201427 Decree Number 201/2013/ND-CP, November, 201328 Circular Number 02/2014/TT-BCT, January, 201429 Decision Number 1474/QD-TTg, October, 2012

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delivered)cutting Adopt the Adaptation Prioritization Framework (APRF)30. Delivered

Adopt the Law on Natural Disaster Risk Management and Reduction31.

Delivered

Establish implementation guidelines for allocation and reporting of financial resources directed at climate change action consistent with Prime Minister Decision 8981/VPCPQHQT dated December 10, 2010 on the Financing Mechanism32.

Delivered

2.2 Major Factors Affecting Implementation:

25. Alignment of the DPO series with the GoV’s priorities for climate change . The policy areas supported by the DPO are directly supportive of and aligned with the GoV’s climate change policy reform program to support the implementation of the National Climate Change Strategy (NCCS) and this highlighted and ensured government commitment.

26. GoV’s strong ownership and leadership of the climate change DPO. The GoV displayed strong leadership on the climate change DPO by establishing MONRE as the lead agency for coordination of the SP-RCC and by having the policy matrix approved annually by the Prime Minister well in advance of the new policy cycle. MONRE helped to promote climate change reform agenda within Vietnam, and in a multi-sectoral manner through working with other key line ministries – MARD, MPI, MOIT, and MOF – which have important roles to play in climate change policy reform. The establishment of the PCU within the DMHCC of MONRE by the GoV, who are also serving as the Standing Office of the NCCC, reflected leadership by the GoV in ensuring that the climate change reform program had an institutional structure in place for coordination, monitoring and reporting of relevant activities. Discussions on policy reform and policy action developments were usually led by line ministry management with participation of other sectors. Development partners were invited to take part in key meetings including the NCCC meetings chaired by the Prime Minister to contribute to the discussions and ensure alignment of support.

27. Strong donor coordination and complementarity of activities under the SP-RCC umbrella promoted the relevance of the DPO series to Vietnam’s CC objectives . Under the GoV leadership, DPs were invited to policy dialogues with line ministries for consultation and contribution to the development of the SP-RCC policy framework, a subset of which was supported under the DPO series. Amongst DPs, Japan International Corporation Agency (JICA), Canadian Aid (CIDA) and Agence Francaise de Developpement (AfD) provided inputs to the

30 Decision Number 1485/QD-BKHDT, October, 201331 Law Number 33/2013/QH13, June, 201332 Joint-Circular Number 03/2013/TTLT-BTNMT-BTC-BKHDT, March, 2013

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design of the DPO series to ensure that there was complementarity of DPs’ support with the World Bank (WB)-supported policy reforms33 as part of the SP-RCC. In addition, Australian Aid and Korean Exim Bank joined the SP-RCC after the WB engagement to complement the policy development agenda strengthening the enabling environment for managing climate change. It was important that there was also action by DPs in support of actual policy implementation. For example, between 2013 and 2015 JICA provided support to MOIT on the establishment of an energy management training center in Hanoi which complements the policy reforms on energy certification (Pillar B) that enabled support to the actual implementation of the certification of energy managers in Vietnam. Technical assistance was also provided by the WB and other DPs to improve the quality of some of the policies developed. For example, the Bank supported a technical consultancy to provide assistance to the GoV on the development of the Law on Water Resources, and in the same manner the United Nations Development Program (UNDP) also provided support for a technical consultancy to provide assistance to the GoV on the development of the Law on Natural Disaster and Control. Other policies supported by Bank TA were for the development of the Adaptation Prioritization Framework (APRF), for the development of the energy efficiency policies, and for the Law on Disaster Risk Management (DRM). This were well reflected in the Program documents throughout the DPO series.

28. A strong analytical base was used to support the determination policy areas and reforms. Advisory services to inform and enhance the quality of institutional dialogue across sectors were developed as a mitigation measure for the challenge of limited institutional capacity within the GoV to build effective capacity to carry inter-sector dialogue identified as a risk to implementation during the appraisal. Advisory services helped build up the policy framework and guide the addressing of challenges in implementation of the reform agenda. Several Advisory Services and Analytics (ASA) products on climate have been undertaken prior and during the DPO series, and these have been used as analytical underpinnings for policy areas included in this DPO series. A list of ASA is included in Table 3, and an expanded list of analytical products supporting the DPO series is included in Annex 7.

29. Other mitigation measures for addressing risks identified during appraisal, also supported the implementation of the DPO series. These include for example, the establishment of a dedicated team of the PCU within MONRE for coordinating the activities of the SP-RCC and focal within line ministries which helped with inter-ministerial coordination. Joint DP annual technical and supervision missions, complemented by several technical support missions carried out by each DP, have represented a significant cumulative set of inputs to help the government in the climate change policy dialogue, and to create a platform of dialogue on climate change issues as evidence by the SP-RCC stakeholders meeting chaired by MONRE Vice Ministers and attended by most Line Ministries, Development Partners, Academe and civil society.

33 Minutes of meetings with the SP-RCC DPs provide evidence of their contribution to the development of the DPO programs 1, 2 and 3. The SP-RCC 2013-2015 matrix identifies the contributions of the development partners in the SP-RCC, and describes how the different DPs achieve coordination, complementarity and reduce overlap.

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Table 3 : List of ASA used to support development of policy actions of the DPO series (more detailed list in each of the DPO Program Documents)

Analytical Underpinnings2015 MPI, Financing Vietnam’s Response to Climate Change: Smart Investment for a Sustainable Future, 96580

2012 WB “Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case for Resilience”, Report Number 78424

2011 WB “DPO Poverty and Social Impact Analysis (PSIA) Preliminary Research and Phase 2”

2011 WB “Gender and Climate Change 3 Things You Should Know”, Report Number 65842

2013 WB “Irrigated Agriculture Management” Report Number 83493

2013 Asian Development Bank (ADB) “Vietnam Country Water Assessment (CWA)”

2012 MONRE “Update to Climate Change & Sea Level Rise Scenarios”

WB 2014 Draft “Low Carbon Options Assessment”, Report 102363

2011 GoV “Power Development Master Plan 7” (PDMP 7)

2012 MPI “Feasibility Assessment of Low Carbon Options”

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:

M&E Design

30. The DPO series developed a result framework adopted by all development partners and by the Government, and promoted a M&E system of the SP-RCC supported by the Government and others DPs. MONRE established a full time PCU within DHMCC tasked with conducting monitoring and supervision, and assisting line ministries and DPs in synthesizing and reporting on results of implementation of the DPO series as part of the SP-RCC coordination. TA and operational support to the PCU was provided by JICA. The PCU established a network of climate change focal points in the line ministries that follow and report on the status of sector-specific climate change policy actions and benchmarks. The policy and results matrix for the DPO Program and details of the program monitoring and evaluation were provided in detail in the program document.

31. There was clear alignment of the PDO with Vietnam’s climate change policy and institutional development goals in 2012. The PDO was to support the government it its efforts to address climate change by adopting policies and strengthening institutional capacity to promote climate resilient and lower carbon intensity development”. Vietnam had expressed its intent to address climate change through its NTP-RCC complemented by a climate change policy

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program. The priority of addressing climate change was also reflected in its World Bank CPF developed with the Government.

32. A minor shortcoming of the PDO is that it could have focused more clearly on outcomes rather than activities. The wording of the PDO “to support” and “to promote” indicates a focus on what will be done in terms of activities, rather than a focus on the intended outcome of the activities.

33. The prior actions and triggers of the DPO series are well linked. Under Pillar A, the prior action was the development of a NTP-WRM, and triggers were the development of the new Law on Water Resources for DPO2 which would build on the development process, content and background work of the NTP-WRM, and the second trigger (DPO3) on the adoption of the National Action Plan on Water Resources Management which would help with the implementation of the new Law. Pillar B which focuses on scaling up of energy efficiency activities in Vietnam, had the adoption of the Implementation and Sanctions Decrees of the Law on Energy Efficiency and Conservation (EE&C) as DPO1 prior action. The triggers identified for DPO2 and DPO3 are well linked to the prior action in that the trigger for DPO2 was the “adoption of regulations establishing the qualification and certification requirement for energy auditors and energy managers” which would help to develop the necessary human resources capacity to implement EE&C Law mandates, and the trigger for DPO3 “Adopt regulations for energy efficiency measures and operationalize in key energy- intensive industrial sectors” would provide guidance for large energy consuming enterprises on how to undertake energy efficiency measures. Under Pillar C, the prior action on the MONRE report on updated climate change scenarios, the second trigger on the development of the NCCS, and the third trigger on finalization of the Adaptation Methodology to guide prioritization and initiate application trigger together contribute to the goal of strengthening the capacity to formulate, prioritize and implement climate change policies. Also under this pillar the prior action on disaster risk management (DRM) implementation at the provincial level and second and third triggers on DRM coordination and the DRM law, together also contribute to the goal of strengthening the capacity to formulate, prioritize and implement climate change policies. The other prior action and triggers under Pillar C together support the goal of strengthening the financing framework to support climate change action.

34. There are both strengths and weaknesses in the program indicators included in the policy matrix. Some indicators are well-linked to the PDO for example the establishment of minimum flows for dry season water allocation planning is a good outcome indicator of the adoption of climate resilient policies in the water sector. Indicators on the certification of energy auditors and managers are found to be good outcome indicators for reflecting institutional capacity enhanced for low carbon development. Similarly, the indicator 10 on the mobilization of additional financial resources planned according to priorities was a good outcome indicator for reflecting strengthened institutional capacity. A weakness however was that there was no distinction between some indicators and their related targets as the wordings of these was sometimes very close. Measurability of some indicators could have been stronger in some cases.

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For example, measurability of indicators 1, 7, and 8 could have been further improved if the term “operational” was defined more clearly in the program document.

M&E Implementation & Utilization

35. The PCU was found to perform its M&E function moderately satisfactorily during implementation and utilized the results to both strengthen current operations and enhance the design of subsequent operations. M&E of the progress of policy actions delivery was documented by the PCU and included in input documents of program progress review meetings held 2-3 times per year for the collaborative review of the progress of the SP-RCC (including the specific policy areas supported by the Bank’s CC DPO series) by the GoV and Development Partners (DPs). However, the quality of the policy actions during their development as well as progress of line ministries in achievement of the DPO’s end-of-program targets were not always fully provided by the PCU, given gaps in coordination and sharing of information from line ministries and the PCU. The concluding sessions for progress review meetings were chaired by the Vice Minister of MONRE and attended by all sector ministries, academe, DPs and civil society. These multistakeholder meetings were a valuable means of fostering M&E utilization insofar as they helped to build GoV ownership of the climate policy reforms, provided a platform for multi-sectoral dialogue within the GoV on climate change policy, and were a platform for dissemination of information on the progress of the program. M&E of the progress of policy actions was documented by the PCU and included in minutes of program progress review meetings. The review of the progress of the policy reforms by GoV and DPs provided the space for reflecting on implementation experiences which could be used for developing lessons that were in turn utilized in the design of subsequent operations and program documents in the DPO series.

2.4 Expected Next Phase/Follow-up Operation (if any):

36. A second DPO series has been designed which builds on the lessons learned from undertaking this first DPO series and from other engagements throughout the Bank. Based on discussions with the GoV, a proposed amount equivalent to US$90 million will be used to support the first operation in a three-part programmatic DPO series on Climate Change and Green Growth. This follow-on DPO series is a key part of the government’s strategy for continuing and building on the momentum of climate policy reforms and the convergence between green growth and climate change policies that were promoted under the first DPO series. Climate change policy reforms are a slow processes as climate change is a relatively new thematic area for many governments which requires time for learning and building experience and working across sectors. Further, there is need to continue to build confidence within Vietnam that supporting action on climate change through policy reforms does help to ensure sustained economic growth, for example, through a stronger focus on low carbon growth that promotes energy security with co-benefits of reducing GHG emissions. The new DPO series will continue to build the confidence of the GoV on the importance of climate change reforms by strengthening the Government’s climate change and green growth reform agenda that aims to improve the sustainability and quality of the main drivers of growth. It takes place in the context of the

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preparation for the implementation of the Paris Agreement and of the World Bank Group Action Plan on Climate Change.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

37. The relevance of objectives is rated high. The GoV’s NTP-RCC34 and SP-RCC35 signaled its intent to promote and reform policy and institutional development that supports mainstreaming climate change adaptation activities and GHG emission reduction with low carbon growth as a key strategy for this. Mainstreaming climate change adaptation and GHG emissions reduction are highly relevant priorities for Vietnam due to its high exposure and vulnerability to the impacts of climate, and the country’s rapidly expanding economy and increasing energy demands. The DPO series is aligned with Target 2b. of the NCCS on Water Security, Target 5b. on improving energy efficiency for GHG reduction, and Target 10 on diversifying financial resources and boosting effective investment as part of a larger program of support. The SP-RCC program was therefore designed to cover a solid set of policy areas under the pillars of adaptation, mitigation, and cross-cutting policy and institutional framework development; see Table 4. By ensuring a strong alignment of the structure and objectives of the DPO series with the structure and policy areas of the SP-RCC, the Bank team positioned the DPO program as a significant contributor to the climate change adaptation and mitigation priorities of Vietnam and related dialogue between DPs and the Government. The focus on policy actions in the water, disaster risk management and energy sectors was strategic given Vietnam’s key climate change challenges and opportunities as identified in a number of analytical studies. The GoV’s 2011-2015 Socio-Economic Development Plan (SEDP) reflects the same priority areas as the DPO series and further supports the point that the DPO series’ objectives and policy areas were nationally relevant for Vietnam. The DPO series also supported the GoV in meeting its global commitments under the United Nations Framework Convention on Climate Change, and Hyogo Framework of Action on Disaster Risk Mitigation 2005-201536. Therefore, the alignment of the DPO series’ objectives with the climate change priorities of the GoV speak to the national relevance of its objectives.

Table 4 : SP-RCC 2009-2012 Program

Pillar 1: Adaptation Pillar 2: Mitigation Pillar 3: Cross-cutting Policy and Institutional Framework

1. Water2. Integrated Coastal Management

7. Energy Efficiency8. Renewable Energy

12. Mainstreaming Climate Change Policies

34The NTP-RCC covered the period 2009 – 2015, and its main objective was the integration of climate change actions into development strategies, programs and plans in all sectors via a unified platform.35 The SP-RCC was designed as a partnership between the GoV and donors in support of the development and implementation of climate change related policies and strategies consistent with the NTP-RCC.36 Governments around the world have committed to take action to reduce disaster risk, and have adopted a guideline to reduce vulnerabilities to natural hazards, called the Hyogo Framework for Action (HFA). The HFA assists the efforts of nations and communities to become more resilient to, and cope better with the hazards that threaten their development gains, http://www.preventionweb.net/english/hyogo/framework/.

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http://www.preventionweb.net/english/hyogo/framework/

3. Natural Resource Management4. Infrastructure5. Health6. Agriculture & Food Security

9. Forest Management and Development10. Waste management11. Agricultural Production and Food Security

13. Financial framework to support climate action14. Awareness raising and disseminating climate change information

38. The DPO series was well aligned with, and supported the Bank’s Strategy for engagement with Vietnam. The Bank’s FY12-16 CPS with Vietnam supports investments and policies for increasing the sustainability of Vietnam’s development, and for improving resilience in the face of external economic shocks, natural hazards and the impact of climate change. Policy actions in this DPO series do support sustainable development and poverty reduction. The theory of change here is that climate change acts as a threat multiplier on the poor through its impacts on the natural resource base on which the poor depend heavily for livelihoods and income, and the exposure of the poor to climate-related hazards such as flooding and drought. By increasing the resilience of people and natural systems to climate change impacts, we are in effect reducing the threats to their lives and livelihoods. Further, actions to mitigate climate change for example through increasing energy efficiency can realize significant economic gains. For example policy actions for creating the enabling environment for improving energy efficiency (Pillar B) can lead to energy savings in the heavy industry sector which can contribute to economic growth. Also, policy actions to improve planning for the management of water resources in the context of climate change (Pillar A) and actions to improve planning for disaster risk reduction at the provincial levels (Pillar C) do contribute to improving resilience to climate shocks. The Mekong Delta Integrated Climate Resilience and Livelihoods Project (P159976) and Vietnam Energy Efficiency for Industrial Enterprises (P151086) are two projects just approved by the Bank that were influenced by the DPO series.

39. The relevance of design and implementation is rated substantial. The policy areas and policy actions included in the DPO series were well aligned with the objectives of the DPO series, and were sufficient for achieving the PDO. As indicated in Section 2.3, there were some identified weaknesses in some of the indicators of the results framework, for example the similarity in the wording of the indicators and the targets, and the improvement to measurability of some indicators that could be made if “operational” was defined.

40. The choice of the DPO instrument, and implementation as a series of three DPOs for financing Vietnam’s climate reforms was a good one for a number of reasons . (i) The DPO series created a platform for continuous dialogue and technical support to the GoV on climate change. (ii) The DPO series helped the government to map out the series of incremental actions needed to achieve climate change policy reforms, thereby understanding the types of investment required for capacity building, tools, and institutional development and strengthening that were needed to support the reform process. (iii) Incremental actions also allowed the GoV to assess progress and challenges during reforms, and to make necessary adjustments to improve the implementation of reforms. This was especially important as climate change was a complex and relatively new issue for sustainable development in Vietnam, and the implementation of policy and institutional actions required flexibility to revise and adapt actions according to needs. The prior actions and triggers were well linked, and were of appropriate ambition and achievable within the timeframe of the DPO series.

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3.2 Achievement of Program Development Objectives

41. The project development objective was rated substantial. Achievement of the PDO objectives are rated as follows: (i) addressing climate change –substantial; (ii) adopting policies for climate resilient and low carbon development - substantial; and (iii) institutional strengthening for climate resilient and low carbon development - substantial. This DPO series was about enhancing the planning and organizational capacity of the GoV to enable them to address the needs for climate change adaptation in different sectors, and to contribute to climate change mitigation through energy efficiency. The actions taken by a country to address climate change differ based on circumstance and need, and accordingly this DPO focused on sectors which are important in Vietnam in the context of climate change and its national development priorities – water, disaster management and energy - and the need for enabling policies and enhancing capacities in these sectors in order to address climate change. The outcome of addressing climate change was therefore contingent on achieving the other two outcomes in the PDO. The paragraphs below describe how the outcomes on adopting policies for climate resilient and low carbon development, and institutional strengthening for climate resilient development were achieved, and thereby achieving the outcome of addressing climate change.

42. The NCCS and National Action Plan on Climate Change (NAP-CC) were two key policies adopted by the GoV for promoting climate resilient and low carbon development across sectors in Vietnam as a result of the DPO series. The adoption of the NCCS can be considered a key milestone for Vietnam, as it signaled an evolution of the GoV’s focus on climate change as an adaptation issue to include mitigation as an issue to be addressed. Importantly, the NCCS helped make the connection between climate change and development, and acknowledged that a mitigation focus supported by a low carbon economy, could be economically beneficial for the country. The Strategy laid out ten cross sectoral strategic tasks which promoted mainstreaming of climate change response into sector, regional and provincial strategies and action plans; promoted local level action on climate change; promoted the use of science in planning; and encouraged international collaboration on climate change. As the NCCS was designed to address the most important climate challenges that Vietnam faces, the tasks and sub-tasks identified in the Strategy were prioritized according to country need. They therefore reflect the increasing capacity of GoV institutions for planning and prioritizing climate actions. The NAP-CC was issued by the Prime Minister to operationalize the NCCS, and included the timeline for 64 specific programs, projects and tasks to be implemented through 2020, assigning lead implementing government ministries for each program, and the sectoral collaboration needed.

43. Improved capacity to plan and finance climate action is reflected in the mobilization of additional funds for climate action. The management of investment financing included in the circular on guiding the implementation of the financial mechanism was applied to the allocation of VND 315 billion per year for 16 projects in 2013 and 2014, and VND 3,000 billion for more than 40 additional projects in 2015. Institutional capacity for financing climate change was strengthened with the establishment of the National Climate Change Committee and the Climate Finance Task Force within MPI.

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44. Institutional capacity of the GoV for promoting climate resilience was strengthened through the adoption of the APRF as a mechanism for the integration of climate change priorities into development planning. Technical support was provided under the DPO series to MPI that led to the development of the APRF as a decision and capacity supporting tool, designed to incorporate relevant climate change adaptation actions into the normal project design and appraisal procedures of Vietnam’s socio-economic development planning in a relatively simple and practical way. There are a few local level examples of the use of the APRF to support development planning. For example, the Da Nang Department of Agriculture and Rural Development (provincial arm of MARD) has applied the APRF to help select 18 climate change related projects based on the Agriculture Rural Development sector framework on climate change response capacity of the sector. A number of other provinces for example, Thua Thien Hue and Quang Ninh, have used the APRF criteria for confirming climate change priority objectives. The Bank TA program under VNCLIP37 and GFDRR supported MPI in developing a comprehensive consultation plan prior to adoption of the APRF and in providing training on the APRF to planners at central and provincial levels in prioritizing investments taking into account the climate change adaptation co-benefit; this has led to strengthening of these institutions for climate resilient development planning.

45. Strengthening of the legal and organizational framework for IWRM was enabled by continuous and evidence-based policy dialogue with the GoV – under the DPO series – on the importance and urgency of making the water sector more resilient to climate change, and technical assistance provided for the development of the new policies, which led to the adoption of several new key IWRM policies. The three approved policies captured under the end-of-program indicator create an enabling environment for coordination on the management of water resources by establishing clear roles and responsibilities for major state actors involved in water resources management; establishing new actors such as the River Basin Organizations for enabling intra-province management of water resources38; facilitating development of plans at multiple scales; specifying priority projects for implementation; and promoting the inclusion of data and information on climate change into planning. These policies supported GoV efforts to implement minimum flow regulations for major rivers which indicates that aspects of the new policies are being implemented. Establishment of minimum flows is a crucial step in demonstrating the improved ability of the GoV to protect the basic rights to water of downstream river communities and some basic levels of environmental health, thereby also restoring the natural resilience of the river systems, an important adaptive action in a changing climate.

37 TA on Climate Change under VNCLIP (P125358)38 People’s Committees (PCs) are mandated under the LWR to coordinate WRM at the provincial, district and commune levels, along with River Basin Organizations (RBOs) who work at the river basin scale, each with discrete mandates. The establishment of the RBOs will address management of water catchments that may straddle two or more provinces by providing a coordination mechanism for such provinces. None of the River Basin Organizations have yet been established, but discussions with MONRE and a recent press release from MONRE indicate that plans are underway to establish these.

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46. Institutional strengthening – an aspect of which is coordination – was improved by the establishment of the high-level national coordination forum for Disaster Risk Reduction and Climate Change Adaptation (DRR CCA), and leadership by the NCCC on DRR CCA. The forum was the first event of this type in Vietnam, and was organized by MARD in collaboration with MONRE and other ministries that are members of the NCCC.

47. The legal and organizational framework for addressing climate change hazards and DRR was improved by the adoption of the new Law on Disaster Risk Management and Reduction; TA was provided to MONRE for developing the Law. The new Law addresses gaps in the previous DRR framework relating to lack of clear structure and guidance and aspects of DRR planning and integration, financing, and institutional coordination. A Central Steering Committee for Natural Disaster Prevention and control was established in March 2015 and is an indication of strengthened institutional capacity supported by the new Law. DRR policy coordination is also improved under the Law, through bringing together many small pieces of DRR legislation under a single framework, thereby helping to improve the comprehensiveness of the legal framework. The development of provincial disaster risk emergency planning, the establishment of an M&E system to monitor the implementation of the National DRM Strategy, and capacity building for community-based disaster risk management, and adoption of the new Law, are likely to support the further implementation of provincial DRR plans.

48. Low carbon development in the energy sector in Vietnam was promoted by the strengthening of institutional capacity for improving energy efficiency. Three circulars supported by this DPO series promoted the development of capacity within large energy users in the heavy industry sector for assessing opportunities for energy efficiency measures, planning for implementing energy efficiency, implementation of energy efficiency measures, and assessment of energy savings; these support Vietnam’s plans for transitioning to a low carbon economy through improvements in energy efficiency. Achievement of targets under Pillar B (200 energy auditors fully certified by the MOIT; 2,000 energy managers certified by the MOIT; and 1,725 energy efficiency plans and implementation reports received from large energy end-user of the industrial sector) indicates that there is now increased capacity for implementing energy efficiency measures and thereby supporting low carbon development.

49. A summary of the policy actions and indicators and their contribution to the PDO is provided in Table 5 below.

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Table 5 : Summary of Policy Actions of the DPO series, program outcome indicators, achievements at completion of the DPO series, and their links to PDO outcomes

Policy Actions of the DPO Series Program Outcome Indicators Achievements at Completion PDO OutcomesNew Law on Water Resources adopted by National Assembly

National Action Plan on Water Resources Management adopted by GoV

Implementation Decree of the new Law on Water Resources issued by GoV

Three new high level legal IWRM instruments are operational with priority actions taken.

Minimum flows established for the Vu Gia-Thu Bon and Ba rivers and used to guide water allocations decisions during the dry season

The New Law on Water Resources, the National Action Plan for Water Resources Management, and Implementation Decree of the Law on Water Resources are operational in VN with the priority actions taken including establishment and use of minimum flow values for the Vu Gia-Thu Bon and Ba Rivers; undertaking of national water census for 2015 and 2020; inventory, assessment and mapping of water resources in river basins, the areas of water shortage and critical areas; development of sector and local master plans on water resources; development of a management information system and database on water resources and water resources monitoring in river basins; development of water protection corridors; assessment of water use and discharge of water waste into water flows.

Climate change is addressed through:

Policies adopted for climate resilient development

Institutions strengthened for climate resilient development

Decrees to implement and to enforce the Law on Energy Efficiency and Conservation issued by the Prime Minister

Regulations establishing qualifications and certification of energy auditors and energy managers issued by MOIT

Circular guiding the implementation of energy efficiency measures in at least one key energy intensive industrial sector issued by MOIT

4% energy savings by heavy industries compared to baseline (forecast under business as usual scenario)

100 energy auditors completed training to support energy efficiency practices in industrial sector, of which 50 fullycertified and 50 doing on-the-job training to become fully certified


5% energy savings by heavy industries estimated and pending verification

250 energy auditors fully certified by the MOIT

2,500 energy managers certified by the MOIT

1,725 energy efficiency plans and


Policies adopted for low carbon development

Institutions strengthened for low carbon development

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Policy Actions of the DPO Series Program Outcome Indicators Achievements at Completion PDO Outcomes1,000 energy efficiency plans andimplementation reports of large energy end-users of the industrial sector are received by MOIT or provincial DOITs, of which 600 have been prepared by certified energy managers

implementation reports received from large energy end-users of the industrial sector

Provincial level climate change scenarios updated in MONRE Report

National Climate Change Strategy guiding GoV actions on climate change issued by the Prime Minister

National Action Plan for Climate Change issued by the Prime Minister

Decision issued adopting a climate change adaptation prioritization framework for socioeconomic development planning.

An Adaptation Prioritization Framework is operational within MPI SEDP annual cycles and initial implementation reflected in MPI SEDP annual guideline frameworks and budget reports.

Adaptation Prioritization Framework is operational and being used in planning including its use by MPI in the 2014 and 2015 SEDP annual guideline frameworks; its use by MPI and DPIs in identification of the climate change priorities for the 2016-2020 SEDP; its use in developing the Decision Support Tool to guide the identification of no-regret investment for financing under the Mekong Delta Adaptation and Livelihoods Project (with IDA funding).


Policies adopted for climate resilient and low carbon development

Institutions strengthened for climate resilient and low carbon development

Official Instruction issued endorsing the Implementation Plan of the National Strategy for Natural Disaster Prevention, Response, and Mitigation to 2020 which is a consolidation of 63 Provincial Disaster Action Plans and evidence of their development.

Law on Natural Disaster Risk Management and Reduction approved by the National Assembly

Provinces have disaster risk management and reduction (DRR) plans under implementation as reflected in the Government Report on Evaluation of 5 years implementation of the National Strategy for DRM.

A comprehensive unified legal framework to address climate hazards is operational enabling a stronger focus on DRR.

All 63 of provinces had DRR plans under implementation

The new Law on Disaster prevention and Control provides a comprehensive unified legal framework to address climate hazards is operational and enables a stronger focus on DRR


Policies adopted for climate resilient development

Institutions strengthened for climate resilient development

Guiding principles related to theFinancial Mechanism for using ODA for climate financing through budget support

Additional financial resources are mobilized for climate action, planned according to priorities and a multisector

The adoption of Circular 03/2013/TTLT-BTNMT-BTC-BKHDT provided clear guidance on management of the climate


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Policy Actions of the DPO Series Program Outcome Indicators Achievements at Completion PDO Outcomesissued by the Prime Minister

Climate Finance Task Force established to guide decision making within MPI

Implementation guidelines for the Support Program to Respond toClimate Change financialresources management mechanism for the climate change actionsconsistent with Prime Minister’s Instruction Number 8981/VPCPQHQT issued by the Ministry of Natural Resources andEnvironment, Ministry of Finance, and Ministry of Planning and Investment.

allocation process, and reported subsequently

change financial mechanism facilitating the increase in budget allocation from VND 315 billion in 2013 to VND 3,000 billion in 2015 to climate change.

Policies adopted for climate resilient and low carbon development

Institutions strengthened for climate resilient and low carbon development

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3.3 Justification of Overall Outcome Rating

50. The overall rating for this development program is satisfactory. The rating is based on substantial achievement of the three main program objectives, high relevance of objectives, and substantial relevance of design and implementation. As detailed in Sections 3.1 and 3.2, there were only minor shortcomings in efficacy and relevance.

51. The ratings for relevance of objectives are high, and for design and implementation substantial. The program was designed to closely follow the GoV’s climate policy reform framework which focuses on the three pillars of adaptation, mitigation and cross-cutting. As such the policy actions promoted in the framework were closely aligned with the priority policy actions identified by the GoV in the water and energy sectors, and on mainstreaming resilience into development and increasing capacity for mobilizing climate finance. The GoV’s priorities for building resilience and enhancing climate mitigation capacity remained constant throughout the period of the DPO series, and so there were no major adjustments made to the design of the program. As Vietnam is in relatively early stages of action on climate change, the use of the DPO instrument was strategic for (i) facilitating incremental action on development of the climate policy framework; (ii) monitoring progress on the development of the framework; and (iii) building an institutional and knowledge platform for continued climate policy reform by the GoV.

52. Achievement of each of the three program objectives is rated substantial. The achievements highlighted above indicate improvements in Vietnam’s enabling environment for climate resilient development and low carbon development in order to address climate change. With the exception of the energy savings indicator which is expected to be met and for which data will be forthcoming, all of the outcome indicators were achieved. A variety of significant policies were adopted, all of these benefiting from continuous and evidence-based policy dialogue with the GoV under the DPO series. In addition strong analytical inputs were provided through TA, and many of these reflecting actions to improve institutional capacity through improving sectoral coordination and cooperation, capacity development, multi-sectoral and evidence-based planning, clear roles and responsibilities, and mechanisms for monitoring, review and reporting.

3.4 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

53. The DPO series stimulated GoV interest and action on the poverty reduction and climate change agendas. A key recommendation from the poverty and social impact analysis (PSIA) which was one of the first of its kind to be undertaken in relation to the preparation of a DPO series, was quantitative work to better understand the impacts of climate change on poverty

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and poverty reduction efforts39, for example the impact of climate events/shocks on household consumption or the impact of water user fees on households’ income elasticity. Following this recommendation, a study was commissioned by the GoV supported by the Bank in 2014 to explore the broader effects of climate change on poverty reduction using quantitative and qualitative methods, and to formulate policy recommendations to address climate change and an uncertain future. The study represents a major pioneering effort by the Bank and GoV to establish linkages between climate change and poverty reduction, in order to simultaneously address these two key issues. At the end of the study40, the GoV was expected to be better equipped to: (i) better understand the poverty-related and distributional impacts of climate change on the livelihoods of the poorest 40 percent; and (ii) design policy options for poverty reduction that consider climate change impacts. The results of the study are expected to also provide guidance to MONRE in coordinating a pro-poor climate reform agenda under the auspices of the SP-RCC Policy Matrix.

54. Gender analysis was undertaken for the preparation of some of the prior actions to ensure that there was gender mainstreaming into the climate policies. The PSIA helped to inform gender issues in relation to the policy actions, and opportunities for mainstreaming gender. In the area of disaster risk management, gender analysis was undertaken and gender action plans were completed to support gender mainstreaming. On water and cross-cutting climate issues, the technical study to support the NAP-WRM included an analysis of gender and water issues, and specific recommendations for mainstreaming gender into the NAP-WRM were provided.

(b) Institutional Change/Strengthening

55. The DPO series helped support the role of MONRE as a leader within Vietnam on climate change41while ensuring participation of line ministries and inter-ministerial coordination Policy actions were designed to support MONRE in leading on a multi-sectoral and cross–cutting agenda, and consultations and technical support provided for the development of the policy actions, helped to ensure that there was engagement among several ministries. Coordination within the line ministry and amongst line ministries and GoV agencies on sectoral policy reform was enhanced. Leadership and coordination of development partners working in Vietnam by MONRE is also facilitated by the SP-RCC framework, with which the DPO series was aligned.

56. Institutional strengthening through capacity development occurred as a result of the DPO series. Technical assistance, in the form of studies undertaken and expert advice, was provided to the GoV to support the development of policy actions, for example on the development of the APRF, and the PSIA focusing on enhancing the pro-poor aspects of the financial mechanism; see list of analytical products included in Table 3. These products have not only filled data and information gaps within Vietnam, but also increased the capacity of government staff to plan and undertake technical work, and apply these results in policy 39 McElwee and Nghiem, 2011. “Report of Preliminary Research of PSIA in Support of Climate Change Development Policy Loan in Vietnam”.40 “Climate Change and Poverty in Vietnam”, P152574 completed in June 2016. 41 Responsibility for leading on climate change issues in Vietnam was granted to MONRE by the Prime Minister and the NCCC.

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development. Through the DPO series GoV ministries have also developed tools that can enable them to implement their respective operations more efficiently. For example, the APRF provided an approach for mainstreaming climate change adaptation considerations into development planning usually led by MPI. The circular guiding the implementation of the financing mechanism enables MOF, MPI and MONRE to more efficiently plan, secure financing, and allocate finances for climate change action.

57. The GoV has overall stepped up its role in the international dialogue on climate change. The GoV has increased visibility in the United National Framework Convention on Climate Change (UNFCCC) process, strengthened its participation in the Partnership for Market Readiness, and has been proactive in engaging in the development of several National Adaptation Mitigation Actions (NAMAs)42. Several ministries collaborated to host a side event at the UNFCCC Conference of the Parties (COP) 21 in November 2015 in Paris. The Government has followed quickly after Paris to engage in an implementation readiness plan under the Prime Minister.

4. Assessment of Risk to Development Outcome

58. Risk to Development Outcome: Moderate. Assessments of specific types of risk considered in determining the overall risk are presented below.

59. Technical risks are rated substantial. Technical risks mainly have to do with the technical capacity of line ministries to implement policy reforms. This risk is however offset by (i) the GoV through continued development of its capacity with technical support provided by DPs such as JICA, AfD and the Bank under the SP-RCC framework; and (ii) through the follow-up DPO series which is now being implemented, and the continued technical capacity building with ministries to implement policy reform.

60. Macroeconomic risks are rated moderate. The domestic risks include structural reform inertia, possible delays in the necessary fiscal consolidation and risks of renewed overheating of the credit market. Vietnam’s macroeconomic prospects could also be dimmed by potential external shocks associated with volatile global financial conditions and possible slow-downs in demand in key export markets. These risks are at least partially mitigated by the ongoing macroeconomic policy dialogue with the authorities (in coordination with the International Monetary Fund (IMF)) and a parallel multi-sector DPO series (Economic Management and Competiveness Credit) which is reinforcing priority structural reforms.

61. Financial risks are rated moderate. The sustainability of policy outcomes relies on the commitment of the GoV to make domestic financing available for implementing policies. Decreases in financial flows to climate change going forward are mitigated by a number of measures introduced in this DPO series which include the use of the APRF to help integrated climate considerations into development planning so that climate action is not perceived as

42 World Bank 2014. Vietnam Climate Change Engagement Note: pp. 2

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separate from development priorities, and also the establishment of the Climate Finance Task Force as a permanent government body to help mobilize funding for climate action. Additional financing planned for climate change and green growth under the new SEDP 5 years contribute to the positive assessment.

62. Institutional arrangement and coordination risks are rated substantial. Institutional arrangements and coordination among line ministries/agencies/sectors are usually week especially on cross-cutting issues/challenges like climate change. This risk is mitigated by the establishment of the Climate Finance Task Forces and the DRR CCA forum to provide mechanisms for institutions to be formally coordinated and to be able to report to each other. The follow-on DPO series is also paying close attention to the need to strengthen institutional coordination. Further, the SP-RCC is a mechanism for facilitating such institutional coordination, and the continuation of this to 2020 helps mitigate these risks.

63. Political and governance risk and risk of government’s commitment are rated moderate. There is a risk that a change in leadership following the Vietnamese Party Congress in early 2016 could lead to a delay in furthering climate change and green growth policy reforms that would help to sustain the outcomes of this DPO. However this risk is mitigated in part by the sustained interest and commitment by various government ministries to action on climate change prior to and over the implementation of the DPO series, which is likely to drive the commitment to action on climate change even with a change in the Central Committee. Also the strong alignment of the policy reforms under this DPO series with the GoV’s climate change policy development and reform process with the support of development partners will help mitigate these risks. The development of the new phase of the SP-RCC in 2016 in which reforms will continue in the water, energy, disaster reduction, and climate finance sectors will help to mitigate the risk of low commitment.

64. Institutional support, environmental and social risks, and risks of natural disasters exposure are rated low.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry: Moderately Satisfactory

65. The Bank made an overall very positive contribution to the climate change reform agenda in Vietnam through this DPO. The content and design of the DPO program benefitted from extensive consultations with government ministries and agencies, development partners working in Vietnam, and Bank staff from a number of different sectors which helped to ensure its relevance, alignment with the government’s climate change agenda (NTP-RCC), and coordination with the work on climate change by other development partners in Vietnam - JICA and AFD and others43. The program was also built on a strong foundation of analytical work (see

43 Consultations with stakeholders were held from 06 to 10 December, 2010. Minutes of meetings with

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Table 3) including two poverty and social impact assessments of the proposed policy actions which helped to ensure its technical soundness, practicality, and alignment with broader development and poverty reduction goals, and technical assistance to the GoV on the design and content of the policy actions. Strong alignment with the Bank’s country strategy with Vietnam, and the Bank’s corporate strategy helped to ensure that the program was well placed to make a positive contribution to the Bank’s mission in Vietnam and globally. A minor shortcoming at quality at entry was that the PDO was not sufficiently climate change outcome focused. There were also some weaknesses in the policy matrix in terms of the measurability challenge of some indicators and the lack of distinction between some of the indicators and their related targets. The Bank Performance in ensuring quality at entry is therefore rated Moderately Satisfactory.

(b) Quality of Supervision: Satisfactory

66. The Task Team provided close and regular supervision of the DPO program during its implementation. As the DPO series was aligned with the SP-RCC, review of the DPO took place under the framework of the review of the SP-RCC and thereby benefitted from inputs from government counterparts, and well as the development partners playing an active role in the implementation of the SP-RCC. Monitoring of the process and progress towards achievement of the policy actions was facilitated by close interaction between the Bank office in Vietnam and the GoV. The establishment of the PCU as an entity within MONRE to manage the implementation, monitoring and reporting of policy actions, was significant for ensuring quality of M&E of the progress of policy actions. However, there were still some gaps in information sharing between line ministries and PCU with regards to line ministry’s progress on achievement of DPO’s end-of-program targets. A monitoring framework (included in Annex 6) was designed for the PCU which helped to ensure that there were periodic updates supported by evidence. The PCU prepared an updated status of the monitoring framework in advance of supervision missions, in order to give the development partners sufficient opportunity to review the implementation of the policy actions. Supervision missions44 were well documented in systematic management letters to the Government and joint Aide Memoirs with other DPs. Having a co-task team leader assigned from the Vietnam office in the third operations of the DPO series, combined with a very close coordination between the co-TTLs and significant investment of time, further improved the strength of the communication between the Bank, DPs and the GoV, and real time support to the GoV. Quality of Supervision is therefore rated Satisfactory.

(c) Justification of Rating for Overall Bank Performance

Rating: Moderately Satisfactory.

67. The MS rating is in line with the evaluation criteria and ratings of moderately satisfactory for performance during project preparation and quality of entry, and satisfactory performance during the supervision phase.

MONRE, development partners and Bank staff can be accessed here 44 A number of supervision missions were held during the life of the operation: February 06-17 2012; April 18-May 05 2012, April 1-12 2013; October 15-24 2013; September 28 – October 11 2014; June 29 – July 03 2015. Aide memoirs for these missions and ISRs are filed in the Bank’s document repository- WBDocs.

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5.2 Borrower Performance(a) Government Performance: Satisfactory

68. Throughout the DPO series the GoV demonstrated sustained commitment to achieving the policy actions of the series. Active leadership and participation in the SP-RCC process signaled the GoV’s interest in climate policy development and reform. The GoV also showed strong leadership on the development of the reforms (policy actions) through ensuring that there was wide consultation among ministries and non-governmental stakeholders on the policy actions before their approval. One notable example of this in the development of the APRF for which several consultative workshops were held to inform its design. Such consultation contributed to the quality of the policy reforms, and the building of ownership of the reforms among different sectors, and promoted cross-sectoral dialogue on climate change. Several of the policy actions for example the approval of the NAP-WRM and the establishment of the Climate Finance Task Force promoted inter-sectoral coordination, and indicated the GoV’s understanding of the need for increased coordination on the climate agenda, and progressively putting in place measures to make this happen. Public stakeholder consultation was facilitated by the GoV in the undertaking of the PSIA, and stakeholder consultation continued throughout the life of the DPO program with key ministries, research institutions, civil society organizations and development partners 45. The consistent participation of the GoV in meetings with development partners of the SP-RCC, the high level involvement of Vice Ministers in these meetings, and the consistency of representation are evidence of strong commitment to the policy reform process.

(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory

69. MONRE provided strong and consistent leadership for the DPO program. The establishment and the maintenance of the PCU within MONRE signaled strong commitment. The role played by the PCU in M&E was a significant driver of the good implementation of the project; see Section 2.3. The Department of Meteorology, Hydrology and Climate Change (DMHCC) as the PCU of the DPO, performed satisfactorily in terms of implementation of the DPO program. Progress of line ministries in achievement of the DPO’s end-of-program targets and requests for information were not always fully provided by the PCU, given gaps in coordination and sharing of information from line ministries and the PCU. For example working with MOIT was challenged by slow response times of the energy efficiency (EE) department for information request, and low proactivity.

(c) Justification of Rating for Overall Borrower Performance

Rating: Moderately Satisfactory.

70. The overall rating reflects the satisfactory performance of the Government and the overall moderately satisfactory performance of the implementing agencies.

45 Development partners included JICA, AfD, Canadian International Development Agency (CIDA), WB, Australian Department of Foreign Affairs and Trade (DFAT), and Export-Import Bank of Korea (K-Eximbank)

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6. Lessons Learned

71. An effective cross-sector platform is needed to achieve significant progress on policy and institutional reforms that address climate change. Climate change affects several sectors of a country’s economy simultaneously, and likewise the effects of response to climate change are interlinked among sectors. For example an increase in energy price through the introduction of a carbon tax will impact agriculture and food prices and transport, and water price. It is therefore strategic in planning responses to climate change, to work across sectors in order to effectively manage these interlinkages. The SP-RCC is a cross sector platform for climate change in Vietnam, which aided the GoV in planning and monitoring the process of climate change policy reforms, prioritizing policy development and reform in specific sectors, and reducing the number of gaps that could diminish the overall quality of the policy process. Effectiveness of the framework was made possible by assigning the DMHCC in MONRE to oversee its implementation; assigning the NCCC to provide quality assurance; and overall guidance and annual monitoring and discussion in joint meetings of the GoV and DPs to assess progress, address implementation challenges, and modify the program accordingly.

72. Convergence of programs and resources between line ministries, across development partners, and between the national and sub-national levels of Government is also necessary for achieving progress on climate change reforms. Related to the lesson above, the SP-RCC framework promoted convergence of programs and resources. The framework provided the structure for the GoV to efficiently engage in a number of sectors simultaneously, assign action on climate change reform to specific line ministries, and hold these ministries accountable for climate change reform actions. International finance mobilization and coordination was also facilitated under the framework.

73. Sustained programmatic engagement is essential to achieve progress in the context of an innovative, multi-sector, multi-thematic and complex reform agenda, which brings additional complexity in the design of the DPO series but at the same time high payoff as it pursues a more holistic approach. The experience of undertaking this DPO series underscored the need for incremental steps, and the marking of incremental achievements to further move forward from planning to financing and implementation. The relatively large number of steps involved in policy development and reform in Vietnam added significant time between policy development and policy implementation. For example, development of a policy action including technical assistance, and consultations within government and with non-governmental stakeholders to inform the policy action (PA) took between 12-18 months. The legal structure in Vietnam like in most other countries has several layers, for example circulars are developed to implement decrees/ decisions, and decrees/ decisions are developed to implement laws; decrees/ decisions developed by ministries are submitted for approval by the Prime Minister which overall lengthens the reform process. Because of the relative newness of the multi-sectoral policy reform approach, the reform process had to be structured in phases that would allow for systematic and periodic review and evaluation, and necessary revision to produce a comprehensive set of policies. Further a phased approach (e.g. DPO 1 to 3 as a programmatic engagement) allowed the GoV to source domestic financing for the policy reforms.

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74. High level of engagement with the government, supported by strategic and targeted technical assistance and knowledge is essential to achieve reforms on climate change. Policy actions of the DPO series benefitted substantially from ASA provided to improve the design and content, and overall quality of the policy, and innovation in policy actions supported by consultations across sectors. For example, ASA support provided to policy actions contributed to the development of the climate change financial mechanism which was an innovative tool for planning and allocating climate financing in Vietnam. In the case of establishing minimum flows, which was a target of Pillar A, the technical support to MONRE on this topic contributed to their achievement of this target. Establishing minimum river/ stream flows to meet ecological needs is a highly technical/ complex process requiring technical knowledge of fluvial systems.

75. Systematic integration of climate change considerations into sectoral and provincial development plans require a framework that helps the government to prioritize climate action. Prioritizing climate action is an essential part of managing climate change, as it is impractical and impossible to address all needs simultaneously. This operation demonstrated that a planning supporting tool such as the APRF is important to guide planners in integration of climate change considerations into sectoral and provincial level development planning.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/Implementing agenciesThe evaluations of the Bank and the borrower are broadly in agreement and the Bank has no comments on issues raised (see Annex 4) in either the borrower completion report or its comments on the Bank ICR.

(b) Co-financiersThere were no co-financiers for the DPO series.

(c) Other partners and stakeholders

The Bank has no comment on issues raises by stakeholders and other partners (see Annex 3 and Annex 5.

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Annex 1 Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members P122667 - Vietnam Climate Change Development Policy

Names Title Unit Responsibility/Specialty

Lending Hisham A. Abdo Kahin Lead Counsel LEGES Legal counsel Beatriz Arizu de Jablonski Consultant GEEDR Technical guidance and support Desmond Michael Cleary Consultant EASVS - HIS Technical guidance / support

Sladjana Cosic Social Development Specialist GSURR Technical guidance and support

Christophe Crepin Sector Leader GENDR Task Team Leader

Stefan Csordas Jr Professional Officer EASER - HIS Technical guidance and support

Adriana Jordanova Damianova

Lead Environmental Specialist GENDR Technical guidance and support

Jane Olga Ebinger Chief Technical Specialist GCCVP Technical guidance and support

Marianne Fay Chief Economist GCCCE Technical guidance and support

Robert J. GilfoyleSr. Financial Management Specialist

GGODR Technical support

Douglas J. GrahamSenior Environmental Specialist

GENDR Technical support

Steven M. JaffeeLead Rural Development Specialist

GFADR Technical guidance and support

Florian KittKnowledge Management Officer

EASER - HIS Technical guidance and support

Keiko Kubota Lead Economist GMFDR Technical guidance and support

Tuan Anh Le Social Development Specialist GSURR Technical guidance and support

Mark R. Lundell Country Director AFCS2 Technical guidance

Thu Thi Le Nguyen Environmental Specialist GENDR Technical guidance and support

Dzung Huy NguyenDisaster Risk Management Specialist

GSURR Technical guidance and support

Ngozi Blessing Obi Malife Program Assistant GENDR Operations and Administrative

support

Cuong Hung Pham Sr. Water Resources Spec. GWADR Technical guidance and support

Nat Pinnoi Senior Carbon GCCCF Technical guidance and support

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Finance Specialist Laura E. Tlaiye Adviser CMD Technical guidance and support

Ky Hong Tran Senior Energy Specialist GEEDR Technical guidance and support

Zoe Elena Trohanis Sr. Urban Spec. GSURR Technical guidance and support

Xiaolan Wang Senior Operations Officer GSURR Technical guidance and support

Supervision

P127201 - Vietnam Climate Change Development Policy 2


Lending Hisham A. Abdo Kahin Lead Counsel LEGES Legal counsel

Laura AltingerSenior Environmental Economist

GMFDR Technical guidance and support

Beatriz Arizu de Jablonski Consultant GEEDR Technical guidance and support

Pierre Audinet Senior Energy Economist GEEES Technical guidance and support

Desmond Michael Cleary Consultant EASVS - HIS Technical guidance and support

Sladjana Cosic Social Development Specialist GSURR Technical guidance and support

Christophe Crepin Sector Leader GENDR Task Team Leader Quyen Thuy Dinh Program Assistant EACVF Technical guidance and support

Robert J. GilfoyleSr Financial Management Specialist

GGODR Technical guidance and support

Douglas J. GrahamSenior Environmental Specialist

GENDR Technical guidance and support

Keiko Kubota Lead Economist GMFDR Technical guidance and support

Thu Thi Le Nguyen Environmental Specialist GENDR Technical guidance and support

Dzung Huy NguyenDisaster Risk Management Specialist

GSURR Technical guidance and support

Ngozi Blessing Obi Malife Program Assistant GENDR Operations and Administrative support

Cuong Hung Pham Sr Water Resources Spec. GWADR Technical guidance and support

Tiziana Smith HQ Consultant ST EASVS - HIS Technical guidance and support Laura E. Tlaiye Adviser CMD Technical guidance


Supervision



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Lending Hisham A. Abdo Kahin Lead Counsel LEGES Legal counsel

Anjali AcharyaSenior Environmental Specialist

GENDRTechnical guidance and support

Laura AltingerSenior Environmental Economist

GMFDRTechnical guidance and support

Pierre Audinet Senior Energy Economist GEEES Technical guidance and support

Desmond Michael Cleary Consultant EASVS - HIS Technical guidance and support Christophe Crepin Sector Leader GENDR Task Team Leader Quyen Thuy Dinh Program Assistant EACVF Administrative support

Defne Gencer Senior Energy Specialist GEEDR Technical guidance and support

Robert J. GilfoyleSr. Financial Management Specialist

GGODRTechnical guidance and support

Toru Konishi Senior Economist GWADR Technical guidance and support Hien Thi Thu Le Team Assistant CEAR3 Administrative support Deepak K. Mishra Lead Economist GMFDR Technical guidance and support

Thu Thi Le Nguyen Environmental Specialist GENDR Task Team Leader

Hien Thi Thu Nguyen EACVF Huong Thi Mai Nong Associate Counsel LEGES Legal counsel

Ngozi Blessing Obi Malife Program Assistant GENDR Operations and Administrative support

Miguel-Santiago da Silva Oliveira

Sr. Financial Management Specialist


Cuong Hung Pham Sr. Water Resources Spec. GWADR Technical guidance and support

Tiziana Smith HQ Consultant ST EASVS - HIS Technical guidance and support


Ashraf Bakry El-AriniClimate change and environment specialist

GENDRTechnical guidance and support

Beatriz Arizu de Jablonski Sr. Energy Specialist GEEDR Technical guidance and support

Desmond Des ClearyWater Resources Management Specialist

GWADRTechnical guidance and support

Cung Van PhamSr. Financial Management Specialist


Nina Masako Eejima Senior Counsel LEGES Legal counsel Supervision

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(b) Staff Time and Cost

LEN(USD)

SPN(USD)

Total(USD)

P122667 - Vietnam Climate Change Development Policy

479,267.87 25,400.00 504,667.87


135,601.23 0.00 135,601.23


267,722.54 124,884.44 392,876.08

Total 882,591.64 150,284.44 1,032,876.08

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Annex 2. Beneficiary Survey Results

A beneficiary survey was not undertaken.

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Annex 3. Stakeholder Workshop Report and Results

A stakeholder workshop for the SP-RCC was undertaken in October 2014, and a Donors’ report on the achievements of the SP-RCC has been produced as a Donor Statement; full statement is included in Annex 6 “supporting documents”. Extracts from the Donor Statement that are directly relevant to the ICR are included below.

I. Significant SPRCC achievements made over the past five years Over the past six years, the SPRCC has proved to be a useful and effective platform for policy dialogues, and has achieved a number of important results, as follows.1. Major Outputs (1) On the mainstreaming front: It is very clear that the Climate change challenges are

nowadays much higher in the political and development agenda in Vietnam and better integrated in major sectoral policies than in 2008 when SPRCC was established. We believe that SPRCC policy dialogues have contributed to these processes of all along the way. Good progress of mainstreaming has been made in areas such as water, energy and disaster risk management (DRM). And the planning process for the Socio- Economic Development Plan (SEDP) 2016-2020 will provide an opportunity to make progress in mainstreaming, financing and advancing Climate Change-Response in all areas.

(2) On the adaptation front: SPRCC has promoted the activities in pro-active disaster preparedness and climate monitoring, water security and suitable pro-active response to sea level rise in vulnerable areas etc. In particular, the Law on Disaster Prevention and Control was developed and enacted in 2013, and so was the Law on Water Resources in 2012. Another notable activity was the 2010 launch of the Climate Change Adaptation (CCA) and DRM forum, which has been acting as one leading platform for local, national and international stakeholders on CCA and DRM to showcase their efforts for the common cause of mitigating the damage caused by natural disasters and Climate Change (CC) on, especially, the vulnerable and the poor.

(3) On the mitigation front: In the energy sector, a number of rules and regulations for the implementation of the Law on Energy Efficiency and Conservation have been developed and adopted under SPRCC, such as the Guidelines for implementing energy efficiency in the industry sector, evaluation and certification of energy manager and energy auditor, etc.

Major Outcomes/Impacts (4) Establishment of a Financial Mechanism initiated jointly by MoF/MPI/MONRE: the

Financial Mechanism was established by three ministries of MoF/MPI/MONRE. This is a new and innovative scheme to finance CC projects at a provincial level, which is an important contribution to introduce the country system to finance climate change.

II. Challenges & Lessons learned based on operations over the past six years 1. The establishment of the Financial Mechanism was a great progress, as mentioned

above, which is worthy of the highest praise as this is new and the first scheme to finance urgent projects at a provincial level to respond to climate change. This mechanism represents a key first step leading to the development of an enhanced climate change financing system for Vietnam, which include dedicated channels that provide incentives. In order to improve the efficiency and impact of the mechanism, the budget allocation system, planning, monitoring and reporting procedures should be reinforced. This would increase transparency and credibility of the Financial Mechanism and may attract additional funding.

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Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR

The full Borrower’s ICR is attached as a separate file to this report.

Assessment of the operation’s objective, design, implementation, and operational experience.

1. The operation’s objective is quite clear and feasible. During the design of the operation, the key implementers did not have a clear understanding about the objectives for policy reform. They thought that the operation was a part of the NTP-RCC. Early and frequent communication on the purpose and design of the operation helped to ensure that the objectives became clearer to implementers. The feasibility of the operation has been reflected in that most of the targets set in the DPOs have been achieved. However, it was felt by one government official that the targets for the policy reform outcomes, which correspond to targets of the government’s policies, were too high. On example of this was the targets set for energy savings in the National Target Program on Energy Efficiency (NTP- EE); these are not feasible and too ambitious. Government officials thought that the scope of the operation designed under three pillars (Adaptation, Mitigation and Cross-Cutting) was sufficient to help the government to solve the climate change problems. Prior actions were discussed and advised by the government quite carefully through discussion with the donor, which helped to achieve the outcomes in the respective areas.

2. In terms of the design of the operation, which relates as well to the Support Program for Responding to Climate Change (SP-RCC) design, one official shared that it would have been better to have investment projects in the Program to support implementation of the policy commitments directly. This arrangement may have been more effective than channeling resources through the state budget. And may have better supported implementation of climate actions

3. Coordination of government ministries on policy reforms needed to be better. Even though responsibilities to ministries were assigned based on their respective functions and mandates the division of labor was not very clear. The coordination in some cases was not very good because of some specific person in an agency, but not because of wrong division of labor between ministries. It is recommended that the World Bank provides technical assistance to help in policy commitments implementation.

4. On gender, some officials think that the project has mentioned about gender. Others do not understand gender issues in the project and whether it should be included in the project or not.

Assessment of the outcomes of the operation against the agreed objectives.5. Among 61 CC projects selected to be funded, there is still no project on EE and

mangrove forest plantation. And because of insufficiency of the Operations, recently the government NTP-RCC and NTP- Green Growth have been restructured into 8 green growth and RCC goals.

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6. The project has helped the government to solve some of the climate change (CC) problems, especially in responding to climate change, improving the legal framework on CC and raising the awareness of CC and how to respond to communicate CC problems to government officials. A large number of legal documents (laws, decrees, circulars, decisions) have been newly issued or revised as the policy commitments under the project.

7. Since the project implementation, the coordination between ministries in policy making and implementation has become better. For example, the coordination between ministries in preparing for the Event on side of COP 21 in November 2015 so far has been good. The ministries involved in the process understand better their responsibility and how to work together.

Evaluation of the borrower’s own performance during the preparation and implementation of the operation.

8. MONRE is the Standing agency for the National Program on CC. Therefore, it is consistent that MONRE is coordinating agency for the SP-RCC, and therefore lead for this policy operation. In order for MONRE to fulfil better the leadership role, some suggested (i) to establish a Steering committee, chaired by a Vice Prime Minister, or (ii) to have contract staff to help in coordination, and (iii) to introduce appropriate incentives to the project participants. For another project management mechanism, some respondents recommend to assign MPI or MOF to coordinate the project to ensure the links of budget allocation to policy commitments implementation. Some respondents think it is enough to get good project management if there is a Contract Coordination Office, sponsored by all donors.

9. The key challenges suffered by the government project implementers were: (i) difficulty in getting good coordination between units in a agency and between ministries; (ii) lack of resources for policy commitments implementation; and (iii) lack of incentives for project implementers. To improve the inter- department coordination, MPI has established a working group on CC. For MONRE, they highly evaluated the support from the contract staff (financed by JICA) in the SP-RCC Coordination office for getting the coordination. To avoid the challenges, awareness of coordination to government officials should be raised. Most of the respondents think that after the project, the Government can plan, identify priorities and finance CC activities better.

Evaluation of the performance of the Bank during the preparation and implementation of the operation.

10. The financial support provided by the WB implement CC activities through Budget Support was appreciated. The support from WB to implement the Climate public expenditure review (not a part of this DPO operation) helped to raise the awareness of the CC problems and the CC activities to many government officials. The General Directorate of energy efficiency has highly appreciated the technical assistance from WB for preparing the Circulars on renewable energy, energy consumption norms.

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11. In order for WB to support better the Government, the resources should be linked closer to policy commitments implementation. WB has cooperated well with ADB and JICA in implementing the CC actions which have served the shared objectives. To enhance the cooperation between WB with ADB and JICA, a Joint CC policy Forum can be organized like ISGE before and the CC actions should be identified clear with what donors are the key supporters and what donors are collaborators.

Future activities for consideration.12. For the future activities, a follow up project should support renewable energy,

mangrove areas or to take the areas from 8 goals of Green Growth and CC Strategy. However, the design should be changed to have a close link of policy commitments to budget allocation or to finance investment projects, which links to policy implementation

13. It is recommendation that to achieve the project outcomes better, it is necessary to have reasonable incentives to the direct participants in the project implementation.

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Annex 5. Comments of Key Development Partners working on the SP-RCC

Comments of Agence Francaise de Développement (AfD)

AfD participates in the Climate budget support programme (SPRCC) since its beginning in 2009. During the period 2010-2015, AfD has provided 5 tranches of financing to the programme with a total of 100 MEUR.

SPRCC programme has succeeded in establishing an official platform for policy dialogue in Vietnam on Climate Change and a specific financing mechanism to allocate budget resources to Climate projects. The programme should get improvements on the following aspects:

1. The resource allocation, including the Technical Assistances provided by the Development Partners and the Vietnamese budget allocation, to Line Ministries to implement Policy Actions need to be strengthened.

2. It is necessary to improve inter-ministerial consultation, which in turn would provide the basis for setting measurable and ambitious objectives in key sectors of climate impacts and for designing sectoral development plans and programs that complement one another.

3. The PCU and MONRE have to better ensure the monitoring and prepare documentation for the joint missions by the Co-financiers.

4. The Development Partners have also to consider how to organize themselves to work on a complex agenda such as climate change.

AfD continues to participate in the preparation of SPRCC programme for the new period 2016-2020, covering the climate change and green growth strategies, as well as the implementation of Paris Agreement in Vietnam. AfD looks forward to renewing its commitments for the SPRCC programme and closely working with the Co-financiers World Bank and JICA on this programme.

Comments of Japan International Cooperation Agency (JICA)

JICA does not have any comments on the evaluation report.

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Annex 6. List of Supporting Documents

1. Program Document DPO1, December 20112. Program Document DPO2, October 20123. Program Document DPO3, May 20144. Letter dated July 28, 2010 to MPI, submitting for Prime Minister Approval a National

Target Program for Water Resources management based on the Water Sector Review (Letter No. 2786/BTMT-KH, July 28, 2010).

5. The Law on Water Resources Order No. 15/2012/L-CTN of July 2, 2012.6. Decision Number: 182/QD-TTg dated January 23, 2014 of the Prime Minister approving

national action plan to raise the efficiency of management, protection and general use of water resources for the period 2014-2020

7. Decree No: 201/2013 / ND-CP on Detailed Regulations for Implementation of a number of Articles of the Law of Water Resources

8. Decision Number: 1077/QD-TTg 2014 on Issuance of Operating Processes for Reservoir Operations on the Ba River

9. Decision Number: 1537 /QĐ-TTg on Issuance of Reservoir Operations on the Vu Gia-Thu Bon River

10. Decree No. 21/2011/ND-CP of March 29, 2011, detailing the Law on Economical and Efficient Use of Energy and measures for its implementation

11. Circular No: 02/2014/TT-BCT 2014 on Solutions for Economical and Efficient Use of Energy in Industries

12. Decision No: 2139/QĐ-TTg 2011 On approval of the National Climate Change Strategy13. Decision No.: 1474/QD-TTg on Issuance of National Action Plan on Climate Change for

the Period 2012-202014. TORs for PCU to support the SP-RCC15. Decision on Establishment of the PCU to support the SP-RCC16. SP-RCC Policy Matrix Monitoring Sheets17. Plan for WRM for Ha Tinh Province18. Tien Giang report of implementation of WRM plan19. Lien, 2009. Legal Interpretation and the Vietnamese Version of the Rule of Law20. Evidence of using the regulation on water flows and water reservoir operations in the dry

season.21. SP-RCC Donor Statement for NCCC Meeting on 8th October 2014

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ANNEX 7. Analytical underpinnings of the DPO series

TA for rural water supply (P123908) TA for mainstreaming climate change in development (P126010) GFDRR - Vietnam DRM Capacity Building (P122619) TA for GEF Vietnam Demand Side Management and Energy Efficiency Program

(P105834) Multi-donor Trust Fund to support Public Financial Modernization in Vietnam (P110525) TA on Climate Change under VNCLIP (P125358) WPP TA for WRM in Mekong Delta (including adaptation) (P113949) Adaption and Low Carbon Development Studies (P126889) PSIA focusing on enhancing the pro-poor aspects of the financial mechanism (P125598) Irrigated Agriculture and Irrigation Systems Management Reform (P131190) Vietnam Climate Innovation Center (P129222) Vietnam Climate Public Expenditure/ Investment Review (CPEIR) (P144625) GFDRR grants (600k and 900k) directed at hydromet strategy implementation and the

provincial disaster risk management plans. Study on water use competition and conflict in the Mekong Delta Vietnam Energy Efficiency and Cleaner Production Financing Program (IFC) System Efficiency Improvement, Equitization and Renewables (SEIER) TA component

to MOIT TA for urban resilience measures to climate change for Can Tho TA to develop guidance on urban resilience to climate change 2015 MPI, Financing Vietnam’s Response to Climate Change: Smart Investment for a

Sustainable Future, 96580 2012 WB “Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case for

Resilience”, Report no. 78424 2011 WB “DPO Poverty and Social Impact Analysis (PSIA) Preliminary Research and

Phase 2” 2011 WB “Gender and Climate Change 3 Things You Should Know”, Report no. 65842 2013 WB “Irrigated Agriculture Management” Report no. 83493 2013 Asian Development Bank (ADB) “Vietnam Country Water Assessment (CWA)” 2012 MONRE “Update to Climate Change & Sea Level Rise Scenarios” WB 2014 Draft “Low Carbon Options Assessment”, Report no.102363 2011 GoV “Power Development Master Plan 7” (PDMP 7) 2012 MPI “Feasibility Assessment of Low Carbon Options” 2011 WB, Vietnam Development Report 2011: Natural Resources Management, Report

no. 66634 2012 WB, Climate-resilient development in Vietnam: strategic directions for the World

Bank, Report no. 67708

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MAP

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