United Nations Development Programme Country: Viet Nam PROJECT … · 2019-10-01 · Project Title:...

UNDP Environmental Finance Services

United Nations Development Programme Country: Viet Nam

PROJECT DOCUMENT

Project Title: Promotion of Non-Fired Brick Production (NFB) Production and Utilization in Viet Nam

UN One Plan III Focus area(s):

Focus area 1: Inclusive, Equitable and Sustainable Growth

Expected OP Outcome(s)/Indicator(s):

Outcome 1.3: By 2016, key national and sub-national agencies, in partnership with the private sector and communities, have established and monitor multi-sectoral strategies, mechanisms and resources to support implementation of relevant multilateral agreements and effectively address climate change adaptation, mitigation and disaster risk management

Outcome Indicator 1: CO2 emissions, total, per capita and per $1 GDP (PPP)

Expected OP Output(s) and Indicator(s):

Output 1.3.3: A national system for Reduced Emissions from Deforestation and forest Degradation (REDD), and Nationally Appropriate Mitigation Actions (NAMAs) for a number of strategically chosen sectors and localities are formulated and operationalized with clear potential benefits

Output Indicator 1: Number of sub-sectors/ cities/ towns/ provinces with NAMAs developed and submitted to an international register

Executing Entity: Ministry of Science and Technology (MoST) Implementing Entity: Ministry of Science and Technology (MoST)

Brief Description

The objective of the Project is to reduce the annual growth rate of GHG emissions by displacing the use of fossil fuels and the usage of good quality soil for brick making through the increased production, sale and utilization of non-fired bricks (NFBs) in Viet Nam. This objective will be achieved by removing barriers to increased production and utilization of NFBs through 4 components: i) strengthening existing policies, guidelines, standards and codes for NFB production and usage and building the capacity of responsible government personnel to enforce a strengthened regulatory framework; ii) building the knowledge and capacity of NFB production stakeholders and potential NFB users on NFB technology application and the use of NFB products; iii) improving access of SMEs and other potential NFB investors to affordable capital financing for NFB projects; and iv) technical assistance in demonstrating the development of NFB production lines and the use of NFB products in new building and construction projects. The Project will be implemented over a 5-year period and is expected to generate GHG emission reductions through the displacement of coal-fired clay brick kilns. Direct GHG reduction estimates are 383 ktonnes CO2. Indirect emission reductions are 13,409 ktonnes CO2 that is cumulative for a 10-year period after the end of the Project.

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Programme Period: 2014 - 2019 Atlas Award ID: 00075827 Project ID: 87517 PIMS # 4546 Start date: 1 July 2014 End Date 30 June 2019 Management Arrangements NIM PAC Meeting Date TBD

Agreed by (Government):

Date/Month/Year

Agreed by (Executing Entity/Implementing Partner):

Date/Month/Year

Agreed by (UNDP):

Date/Month/Year

Total resources required $ 38,880,000

Total allocated resources: $ 38,880,000

GEF $ 2,800,000

Parallel o UNDP ongoing project $ 550,000

Other parallel (In kind & In cash): o Central and Local Govt. $ 8,220,000 o Industrial Association $ 110,000 o Private Sector $ 6,000,000 o Commercial Finance $ 21,200,000


Table of Contents Acronyms ................................................................................................................................... 4

SITUATION ANALYSIS ............................................................................................................. 6

Context and Global Significance .............................................................................................. 6

Barriers and Root Causes ....................................................................................................... 9

Barrier Analysis ..................................................................................................................... 10

Stakeholder Analysis ............................................................................................................. 13

Baseline Analysis .................................................................................................................. 13

STRATEGY ............................................................................................................................. 23

Project Rationale and Policy Conformity ................................................................................ 23

Country Ownership: Country Eligibility ................................................................................... 23

Country Drivenness ............................................................................................................... 23

Design Principles and Strategic Considerations .................................................................... 24

Project Goal, Objective, Outcomes and Output/Activities ...................................................... 25

Key Indicators, Risks and Assumptions ................................................................................. 37

Cost Effectiveness ................................................................................................................. 39

Sustainability, Replicability and Impacts ................................................................................ 39

PROJECT RESULTS FRAMEWORK ...................................................................................... 42

TOTAL BUDGET AND WORK PLAN ...................................................................................... 47

MANAGEMENT ARRANGEMENTS ........................................................................................ 52

Project Organization Structure............................................................................................... 52

General ................................................................................................................................. 57

MONITORING FRAMEWORK AND EVALUATION ................................................................ 59

LEGAL CONTEXT ................................................................................................................... 62

Annex I: Risk Analysis ....................................................................................................... 65

Annex II: Detailed CO2 Calculations and Assumptions .................................................... 67

Annex III: Annual Targets………………………………………………………………………...83

Annex IV: Agreements ......................................................................................................... 86

Annex V: Terms of Reference for Project Staff and Consultants .................................... 89

Annex VI: Preliminary Design Parameters of NFB Pilots .................................................. 93

Annex VII: UNDP-GEF Environmental and Social Screening Procedure (ESSP) .............. 94


ACRONYMS Acronym Meaning

AAC Autoclaved aerated concrete bricks

BAU Business-as-usual

CBB Concrete brick block

CDM Clean Development Mechanism

CEB Compressed earth block

CME Coordinating management entity (for CDM-PoA)

CP Country Programme

CPAP Country Programme Action Plan

DoC Provincial Department of Construction

DoIT Provincial Department of Industry and Trade

DoST Provincial Department of Science and Technology

ECC Energy Conservation Centers (Hanoi, Haiphong, Danang, Cantho & HCMC)

EE&EC Energy Efficiency & Energy Conservation

EIAs Environmental Impact Assessments

EOP End of Project

FCB Fired clay brick

FY Fiscal year

GDP Gross Domestic Product

GEF Global Environment Facility

GHG Greenhouse Gases

GIZ German International Assistance

GoV Government of Viet Nam

GJ Gigajoules

HUT Hanoi University of Technology

IBST Institute for Building Science and Technology

IEA International Energy Agency

INTRACO Investment and Trade Consultancy Company Limited (proposed CME for CDM-PoA)

kgoe Kilogram oil equivalent

kWh Kilowatt hours

LGF Loan guarantee fund

MDG Millennium Development Goals

MFI Micro-finance institution

MJ Megajoules

MoC Ministry of Construction

MoF Ministry of Finance

MoIT Ministry of Industry and Trade

MoNRE Ministry of Natural Resources and Environment

MoST Ministry of Science and Technology

MPa Megapascal (a unit of pressure)

MTDF Medium Term Development Framework

mtoe Million tonnes of oil equivalent


Acronym Meaning

NAFOSTED National Foundation for Science and Technology Development

NATIF National Technology Innovation Fund

NFB Non-fired brick

NFBD Non-fired brick development

NGOs Non-Government Organizations

NPD National Project Director

NPFE National Portfolio Formulation Exercise (under GEF)

PIR Project Implementation Report

PMU Project Management Unit

PoA Programme of Activities under CDM

ProDoc UNDP Project Document

PSC Project Steering Committee

R&D Research and Development

SBU Standard brick unit

SME Small and medium enterprises

STAMEQ Standard, Metrology and Quality under DoST

TJ Tera joules

toe Tons of oil equivalent

ToR Terms of Reference

TTC Technology Transfer Centers (located in provincial centers)

UNDP United Nations Development Programme

UNFCCC United Nations Framework Convention on Climate Change

VAA Viet Nam Architect Association

VABM Viet Nam Association for Building Materials

VEPF Viet Nam Environmental Protection Fund

VFA Viet Nam Farmer’s Association

VFCEA Viet Nam Federation of Civil Engineering Association

VIBCA Viet Nam Building Ceramic Association

VietinBank Viet Nam Trade and Industrial Bank

VIGLACERA Viet Nam Building Glass and Ceramic Corporation

VoV Voice of Vietnam

VSBK Vertical shaft brick kiln

VTV Viet Nam Television

VWU Vietnam Women’s Union

VYU Youth Union of Vietnam

WB World Bank

1. Currency Equivalents1

Currency Unit = Vietnamese Dong, VND 1 USD = VND 20,564

1 www.oanda.com (exchange rate effective January 1, 2013)

http://www.oanda.com/


SITUATION ANALYSIS

Context and Global Significance

1. Viet Nam’s GDP growth since 2008 has been on the order of 6%2. A consequence of this

healthy economic growth is the rapid urbanization of Viet Nam, where the brick manufacturing, a key sub-sector of the construction material industry, has also risen dramatically. The overall demand for building bricks has increased by 6% annually from 2005 until 2011, and is expected grow at a similar pace for the next 10 years. More than 87% of the building bricks used in Viet Nam, however, are fired clay bricks (FCBs)3. The annual production of 20 billion fired-clay standard brick units or SBUs4 during the 2008-2010 period consumed more than 2.2 million tonnes of coal equivalent (tce) annually, corresponding to an annual emission of 6 million tonnes of CO2

5. According to the Viet Nam Association for Building Materials (VABM), more than 40 billion SBUs will be required by 2020.

2. While the rapid growth of the brick making industry has contributed to poverty reduction in

Viet Nam, there are still more than 10,000 traditional brick kilns still in operation where the majority of brick producers are in the business for immediate economic gain and using inexpensive traditional production methods. The issues of traditional brick making and the continual growth in the number of FCB kilns, however, include adverse environmental and social impacts such as:

Inefficient consumption of coal and wood energy due to limitations of traditional kiln

design to use waste heat to pre-heat new bricks;

Higher levels of local air pollution and harmful emissions;

Generation of more waste causing serious pollution to local areas;

The reduction of 3,000 ha of arable land annually from the mining of agricultural topsoil as material for brick making; and

Poor working conditions notably during operations at traditional kilns during the monsoon season.

3. While the Government of Viet Nam (GoV) has made progress in reducing the impact of FCB kilns through regulating the number of new fired kilns proposed for construction and encouraging efficient but intermediary technologies such as the Vertical Shaft Brick Kiln (VSBK), the GoV wants to promote the use of “non-fired bricks” (NFBs) as a green building material in an effort to:

Reduce pressures on agricultural land to be mined for clay as material for brick making and to improve food security for Viet Nam;

Utilize fly ash as a material for NFBs to reduce growing stock piles of fly ash from coal power production;

Reduce fossil fuel consumption and GHG emissions generated from brick manufacturing activities; and

2 General Statistics Office of Viet Nam 3 Information from the Viet Nam Association for Building Materials (VABM) 4 This is in reference to a standard size of building bricks with dimensions of 220mm x 105mm x 60mm per SBU.

This would include fired clay bricks and NFBs. 5 http://english.vietnamnet.vn/fms/environment/55542/vn-boosts-green-building-materials.html

http://english.vietnamnet.vn/fms/environment/55542/vn-boosts-green-building-materials.html


Modernize the industrial sector in line with other modern and rapidly developing countries where the market share of NFBs is close to 90%.

4. NFB manufacturing actually started in Viet Nam in the 1970s with the production of concrete

bricks, silicate bricks and compressed earth block (CEB). Two NFB technologies, primarily concrete block bricks (CBBs) and autoclaved aerated concrete (AAC) bricks, have been serving niche building material markets in Viet Nam, mainly in large urban centers such as Ho Chi Minh City (HCMC) and Hanoi. Some natural non-fired materials such as laterite, aslar stone, rubble stone, and lime have been used in Viet Nam since the 1960s.

5. FCB production involves two key processes: (i) forming of clay bricks; and, (ii) the firing and sintering of clay bricks in a kiln. The sintering process requires thermal energy inputs such as coal, furnace oil or other fossil fuels. The production of NFBs, in contrast, does not involve the inputs of intensive thermal energy; bonding of the basic materials of NFB is facilitated through hydration, the chemical reaction between anhydrous mixture of fly ash, lime or cement, gypsum, stone dust and other kind of building material waste, with water. The net result of a shift to NFB production is the substantial saving of thermal energy required for FCB production less the electricity from the national grid to power NFB machinery and equipment and less the energy required for cement production. For Viet Nam, a shift to NFB production will translate into substantial energy savings in the order of 30 to 70% that will reduce and eventually eliminate the use of the use of coal in conventional brick production. NFB production will also make use of various waste by-products from industrial activities such as power coal fly ash that are continuing to grow in stockpiles and causing environmental problems in the areas where they are being stored. Figure 1 provides a process diagram of an NFB plant.

6. While there are currently 70 NFB production facilities in Viet Nam that have capacity of over

4.3 billion SBUs annually, NFBs have not evolved into a mainstream construction product as they only account for 13% of all brick sales, all this despite CBB prices being roughly 80 to 85% below that of FCBs. According to VABM, total brick production in 2011 was equivalent to 24.0 billion SBUs, of which 20.9 billion SBUs were fired clay bricks, 3.1 billion SBUs were non-fired bricks. As of 2012, CBBs were the most common NFBs with over 2.7 million SBUs produced with AAC bricks being the next most common NFB product with 0.2 billion SBUs.

7. A primary reason for the low market share of NFBs is the lack of confidence in NFB

products by the primary consumers of NFBs, local architects, engineers and building developers. This has contributed to reduced demand for NFBs, deterioration of existing NFB production lines, and a general lack of knowledge on NFB product quality and usage. Notwithstanding that some NFB prices such as CBBs are lower than FCBs, the quality of NFBs on the Vietnamese brick market continues to be poor, exacerbating the lack of consumer confidence in NFB products. Furthermore, consumers are unaware of the economic gains from the use of quality NFBs that may result in the use of less mortar, improved quality construction, and lighter buildings. On the supply side, prospective NFB entrepreneurs lack knowledge on the production of quality NFBs, and are unable to provide quality assurances and safeguards while regulators do not have the necessary codes, standards and enforcement resources to ensure the quality production and proper use of NFBs on various construction projects.


Figure 1: Schematic of NFB Production Process (for concrete brick blocks)

8. The GoV has long recognized the need to transform the building materials market in Viet

Nam towards NFB technology. The Prime Minister’s Decision 115/2001/QD-TTg dated 1st August 2001 set targets for NFB production of 20% by 2005 and 30% by 2010. The targets were not achieved largely due to the lack of funds and lack of preparedness of the market to accept new brick making technologies over the traditional ones. In 2008, the GoV issued its “Master Plan of Construction Material Development up to 2020” that included the country’s need to scale-up its production and use of NFBs and to scale back FCB production. As a follow-up, the GoV approved the “Non-Fired Brick Development Programme” (NFBD) on 28 April 2010 that serves as the main baseline plan in Viet Nam in the area of energy efficient brick making. The national targets set by the Prime Minister’s Decision No.121/2008/QD-TTg in this programme are:

Metering balance

Cement Silo

Raw materials yard

Material Bunker Auto-metering

balance

Moulding machine

Pan Mixer

Belt conveyor

Skip

Product

Manual truck

Curing product yard

Lift truck

Product yard

Water, additives

Cement


The share of NFB production will increase to 20-25% by 2015 and 30-40% by 2020;

Utilization of 15 to 20 million tonnes of industrial waste (flyash) from coal-fired power generation and coal kilns in other industries; this will translate into savings of 1,000 hectares of agricultural land per year; and

All traditional FCB making plants will be gradually replaced by NFB production facilities.

9. To achieve these targets, GoV have set up preferential policies on corporate tax, import tax for equipment and materials used in producing NFBs and other financial incentives for producers. The NFBD Programme focuses on the promotion of modern and semi-modern technologies producing the following types of NFBs: (i) concrete block bricks (CBB) made of cement, fly ash, ash, ore tailing, other industrial wastes; and (ii) lightweight concrete bricks or autoclaved aerated concrete (AAC) bricks made of sand, fly ash, cement, aluminum, and ore tailings. The NFBD Programme also aims by 2015 for 70% of all NFBs to be CBBs with AAC bricks comprising the remaining 30% of NFB production. Table 1 provides an estimate of brick production today and its anticipated growth to 2020 based on the targets of the NFBD Programme.

Table 1: Estimated Growth of NFB Market Share

Brick Type Estimated Brick Production (billion SBUs)

2011 2015 2020

Fired Clay Bricks 20.9 24.2 25.2

Non-Fired Bricks 3.1 8.0 16.8

Concrete Brick Blocks 2.7 5.6 11.76

Autoclaved Aerated Bricks 0.2 0.8 3.36

Others 0.2 1.6 1.68

Total6 24.07 32.2 42.0

Barriers and Root Causes 10. Past attempts by the GoV to increase NFB usage in Viet Nam’s construction sector have

failed due to an incomplete regulatory and legal framework to increase the use of NFBs in the construction industry in Viet Nam. While there are central government policies and directives in place to give incentives to NFB plant investment and increased NFB usage, there has been a lack of ability at the provincial levels to implement these policies and directives to facilitate increased usage of NFBs in the Viet Nam market. The result is a paucity of knowledge amongst potential users of NFBs such as engineers, architects and building developers on NFB advantages in building construction. Furthermore, for those who do have knowledge of NFBs, they lack confidence in the quality of NFBs available on the Vietnamese market.

11. Current demand for NFBs comes mainly from Viet Nam’s largest urban areas, namely

Hanoi, Danang and Ho Chi Minh City. This demand has spawned a number of CBB plants that produced 2.7 billion SBUs in 2011. These CBB plants are mainly comprised of more than 50 large to medium enterprises. Most CBBs are produced mechanically using automated vibration-pressing technology mainly to produce solid and hollow bricks with the standard brick unit dimensions of 220mm x 105mm x 60 mm (of which hollow bricks

6 This assumes a 6% growth rate of demand for building materials based on average GDP for Viet Nam until 2020. 7 This is based on the calculation of MoC investment figures for NFB promotion.


comprise more than 75% of demand). The resulting NFB quality, however, is very low to the extent that building developers only have the confidence to use NFBs in low-rise buildings, pavement and wall fence applications.

12. Due to limited financial resources, most CBB producers have imported low quality

technology from China without proper technology transfer in terms of operational training and quality assurances. The poor quality of NFBs has resulted in the lack of consistent demand for CBBs resulting in plants operating at capacities of 50% or less, deterioration of the skills of plant personnel in producing quality NFBs, and the entrepreneur’s inability to invest in production improvements. For example, the lack of quality controls in many of the enterprises results in some CBBs that do not meet minimum compressive strength standards of 3.5 - 5.0 MPa.

13. The GoV also made attempts to promote the use of AAC bricks in 2009 with an investment

programme for 10 AAC plants producing between 100,000 and 300,000 m3 annually8. Unfortunately, these plants are not producing AAC bricks even though all equipment was imported from China by local entrepreneurs in 2010; the problem has been the quality of the AAC bricks which was so poor that the AAC brick production lines ceased operations. The poor quality can be attributed to the fact that AAC operations staff had not received specialized training from AAC suppliers, further exacerbating the operational issues of these plants. A recent review of the AAC programme by the MoC also acknowledges the lack of technical guidelines for building design and construction using AACs and other NFBs.

Barrier Analysis 14. The low market share of NFB products in Viet Nam can be attributed to a number of barriers

as detailed in the following paragraphs. 15. Market barriers: Despite its presence in the Vietnamese market for more than 30 years,

NFBs only have a 13% share of the Vietnamese brick market. This can be attributed to the following market factors:

Lack of reliability of the locally made NFB products that is considered a primary barrier to the growth of the NFB market. Several NFB producers do not have guidelines or mixing procedures for NFBs that results in variable inputs of materials such as cement, resulting in variable quality of NFBs sold and a loss in consumer confidence in NFBs;

Lack of affordable AACs due to their high cost of production that is not competitive with FCBs and other NFB products. This is attributable to inefficient production of AAC brick products that has resulted from a lack of technology transfer on the operation and maintenance of AAC equipment; and

Resistance to change by some FCB kiln entities who have had centuries of practice using clay as a raw material for brick making.

16. Policy barriers: Despite the promulgation of the EE&EC Law in 2010 to improve the energy

efficiency of the construction sector and the issuance of decisions and directives in 2008 and 2010 by the Prime Minister9 to increase the usage of greener building materials and to

8 721 SBUs is equivalent to 1.0 m

3.

9 This is in reference to Decision No. 121/2008 of the Prime Minister on planning development of construction

material production toward 2020; the Law of EE&EC issued by the 12th

National Assembly on June 2010 that has


mitigate the environmental impacts of manufacturing FCBs, the construction sector and building material consumers have been slow to adopt NFB technologies and applications. This can be mainly attributed to a policy and legal framework that is not fully supportive to the shifting of brick making from traditional technologies to NFB technology:

No clear strategies on support to retire traditional clamp kilns and VSBKs;

Lack of standardization policies on NFB technology to be used in the industry. This has resulted in the use and importation of least-cost low quality technologies with little or no technical support;

Incomplete standards governing NFB quality and obligations for quality assurance; and

Insufficient codes on the various uses of NFBs in all aspects of construction. This includes the lack of NFB construction standards that define where and how NFBs can be used for buildings, walls and paving; permissible load bearing strength of NFBs; types and amount of mortar to be used; and construction procedures using NFB materials.

. 17. Institutional barriers: In Viet Nam, local government agencies and provincial and municipal

people’s committees are responsible for implementing central government policies10. While they are aware of their responsibilities in this regard, their capacity to promote NFB production and usage is weak; they lack the resources, capacity and knowledge required to implement a local NFB development programme, and to systematically disseminate information on NFBs to create demand and provide supply.

18. Knowledge and awareness barriers: For the past 30 years, NFBs have generally served a

niche market for building products, and as such, awareness of the advantages and environmental benefits of NFBs within the construction and building sector in Viet Nam is low:

For engineers, architects and building developers, there is little knowledge on the wide range of NFB products which can provide building developers with an improved building product. This includes improved insulation, aesthetics, and less costly foundation designs (based on the availability of light weight NFBs). The prevailing preference amongst most construction practitioners are for FCBs;

For building and construction workers, there is little or no knowledge on the best practices on the use of NFBs in construction and in buildings. This would include the use of certain types of mortar, and required curing of NFBs;

There is a lack of local technical knowledge on planning, designing, constructing, operating and maintaining an NFB plant;

There is a lack of local technical knowledge on how to manufacture NFB equipment for a Vietnamese NFB market;

For potential brick making entrepreneurs and financial institutions, there are very few examples of well-managed and profitable NFB production facilities, and a lack of information on the technical, economic and environmental benefits of NFB investments. In addition, technology transfer between foreign NFB suppliers and local Vietnamese entrepreneurs has not been properly implemented resulting in poor and unprofitable plant performance.

details on the use of EE materials in construction activities; Decision No. 567/QD-TTg on the NFB Development Program approved by the Prime Minister on 28/4/2010; and Directive No.

10/CT-TTg on the increase of non-fired

construction material usage and limitation of fired clay bricks usage and production issued by the Prime Minister on 16/4/2012. 10

This includes DoST, DoC and DoIT.


19. Technical barriers: NFB production in Viet Nam has been limited by a number of issues

related to the technical quality of existing facilities and the lack of development of an NFB industry:

Local investors with limited financial sources typically import least-cost NFB technologies that are of inferior quality, frequently break down halting production, and raise NFB production costs11. Exacerbating these issues is the lack of technical support from suppliers; and

Control over the quality of input materials is not adequate. For some AAC plants, lime is hydrated either too fast or too slow; other plants use lime with too high of an unhydrated content leading to incomplete Ca(OH)2 reactions. In addition, the quality of sand used is still poor with a high content of coarse particles and dirt. The result is the inability of some NFB plants to produce high quality NFB products12.

20. Financial barriers: With few examples of profitable NFB plants in Viet Nam, there are

barriers to raise sufficient financing for NFB plants to meet the GoV’s targets for increased NFB production:

Reluctance by local banks and financing institutions to finance NFB investments until they become more familiar with the technology, can estimate risks and rates of return, and have proven cases of well-managed high output NFB plants13;

Increased bank due diligence on new borrowers resulting from higher ratios of bad loans14, notwithstanding the fact that banks have sufficient funds for lending15;

Potential investors lack experience with NFB technology and currently have a high risk profile as borrowers for NFB plants16;

Many potential investors are SMEs of FCB plants using traditional kilns or VSBKs who may not have access to sufficient collateral for NFB loans17. Moreover, they have limited abilities to apply for bank loans; and

Lack of knowledge and ability of potential SME investors to apply for concessionary financing sources such as VEPF18

.

11 Inferior equipment includes “vibrant-compressing technology” that produces heavy CBBs with high porosity. The

compressing technology without vibration can prevent this shortcoming; however, the technology is costly and not available in Viet Nam. 12

Concrete blocks need to meet the TCVN 6477:2011 standard that specifies of concrete block strength of 5.0 – 7.5 MPa, and specific weight of 2,310 kg/m

3. AAC brick (or light concrete) products need to meet standard TCVN 7959:

2011 that specifies of AAC strength of 3.5 - 5 MPa, specific weight from 600 kg/m3 to 800 kg/m

3.

13 According to PPG surveys, actual brick production was only 10 to 50% of total designed production capacity

14 According to State Banks of Viet Nam, bad loans increased dramatically in 2011 (4.9%) and 2012 (8.7%).

According to VietinBank, while Vietnamese banks have increased capital mobilization by 11.7% in during the first 9 months of 2012, lending had only increased by 2.5%.

15 This

can be attributed to three reasons: a) enterprises have a high number of bad loans; 2) enterprises reduce

borrowing due to high inventories caused by a sluggish market; and 3) lending interest rate is still too high for borrowing (as of November 2012, the short term interest rate was at 15%). As a result, banks are increasing their purchase of government bonds and avoiding loans to high risk clients.

16 Implementation of NFB plants approved by MoC in 2011 and 2012 was delayed. This included AAC plants that

either stopped operation or operated under 10% of its capacity. 17

Failure to meet collateral requirements would include a demand for loans that are higher than value of collateral asset; an under-valued collateral asset; and lack of legal document approving ownership rights. 18

VEPF reports that disbursement to clean production, EC&EE and technology innovation was less than 10% of all VEPF loans totalling VND 787 billion. This consisted of 787 loans for 133 projects (www.vepf.gov.vn).

http://www.vepf.gov.vn/


Stakeholder Analysis

21. There is a wide range of stakeholders involved with the brick market and the growth in the supply and demand of NFBs in Viet Nam including:

Public sector stakeholders at the central level who set policies to promote and regulate the growth of NFB production and usage;

Public sector stakeholders at the provincial levels who implement central policies and would be tasked to work with the private sector to ensure robust growth in the production and usage of NFBs in their respective jurisdictions;

Private sector stakeholders who will own, finance, design, construct, operate and maintain NFB plants;

Private sector stakeholders who will provide the necessary, specialized services to NFB plant owners and government agencies to ensure the sustainable supply of NFBs. These services would include engineering, equipment manufacturing and installations, plant operations, and the training and certification of personnel; and

Civil social service organizations (such as VABM, and industrial associations, farmer associations, and industrial promotion associations) that will raise the profile of NFB production and usage and its national environmental and social benefits through advocacy, awareness raising and training.

A full list of these stakeholders is provided on Table 5.

Baseline Analysis 22. The baseline scenario of the GoV efforts to increase NFB usage in Viet Nam is

characterized by the following: Formulation and rather lax implementation of a series of policies, directives and

decisions designed to catalyze the development of the NFB market, and limited and non-integrated efforts to facilitate a shift of existing FCB owners towards NFB manufacturing; and,

Continuation of the current NFB developments that are not reaching the targets of Decision No. 567/2010/QD-TTg.

This section on baseline analysis describes GoV’s efforts to develop the NFB industry, the resulting scenario with brick making in Viet Nam, the reasons for the ineffectiveness of the current policies, directives and decisions, and incremental assistance required to meet the NFB targets of Decision No. 567/QD-TTg.

Policies, Directives and Institutional Arrangements 23. Decision No. 115/2001 of the Prime Minister was Viet Nam’s first government backed

incentive programme to facilitate additional investment in NFB plants between 2001 and 2004. National targets of this Decision were a 20% market share of NFBs by 2005 and 30% by 2010; by 2005, these targets were not met.

24. NFB growth was again targeted by the GoV in its “Decision No. 121/2008 of the Prime

Minister” that defined the GoV’s vision of construction material production including targets for FCB and NFB production toward 2020. The GoV’s continued attraction to NFBs had


been the ease of manufacturing NFBs to adapt to its various uses in high-rise construction. Moreover, from an environmental perspective, the GoV recognized the environmental benefits of NFB manufacturing in reducing specific energy consumption (SEC), GHG and black carbon emissions, local air pollution, and land degradation resulting from clay mining of agricultural areas. Targets for FCB production encouraged FCB technologies that would essentially reduce raw material consumption and protect the environment through the replacement of current traditional clamp kilns with tunnel brick kilns (TBKs), or other clean brick making technologies. The Decision’s targets for NFB production include:

Developing production of NFBs from raw materials such as cement, stone, sand and ash;

Producing NFBs using modern technology in large scale plants with a process that will have production flexibilities of producing several sizes of bricks and blocks;

Increasing NFB usage to 20-25% by 2015 and 30-40% by 2020;

Promoting and investing in NFB research and development; and,

Encouraging development of light and super lightweight material production for walls, partitions, fire retardant materials, that have improved sonic, thermal and electric and insulation properties and require less energy to manufacture.

25. After Decision No. 121/2008/QD-TTg, the Prime Minister on April 28, 2010 approved Decision No. 567/2010/QD-TTg on the NFB Development Program, and Directive No.

10/CT-TTg with the following specific objectives:

The production and use of NFBs to replace FCB usage at the rate of 20-25% by 2015 and 30-40% by 2020;

Utilization of 15-20 million tonnes of industrial waste (ash) from coal-fired power generation and other industries19. This would be equivalent to saving over 1,000 hectares of agricultural land annually. Some NFBs in Viet Nam are now made of up to 12% industrial waste by volume, which the GoV wants to promote20; and

NFB production will consist of 75% CBBs by 2015 and 70% by 2020; and 20% light-weight bricks (from AAC) by 2015 and 25% by 2020.

26. Directive No. 10/CT-TTg contained specific fiscal incentives including:

No import duties as specified in Circular No. 157/2011/TT-BTC (issued by MoF on November 14, 2011) for importing raw materials and equipment related to NFB production lines for light-weight NFBs and cement block brick production line with the capacity of more than 7.0 million SBUs annually; and

Preferential taxes for NFB projects under the “Key Mechanical Products Programme” in accordance with Decision No. 10/2009/QD-TTg on 16/1/2009 includes:

Imported construction bricks will be taxed at a ceiling rate according to WTO

guidelines to encourage and protect locally-produced NFBs; and

19 This would include ash, cinder and red mud collected from thermal power stations, metallurgy factories, and stone quarries and bauxite factories 20

The GoV forecasts that industrial waste will grow to about 60 million tons annually during the period 2015 to 2020 with MoIT estimating a large proportion of this waste in the form of fly ash, more than 3.2 million tonnes, coming from coal power generation in 2013. This forecasted waste volume would be a sufficient supply for NFB plants seeking to use fly ash as a substitute brick material


specific NFB production equipment and materials used as listed under Circular No. 157/2011/TT-BTC, can be imported into Viet Nam duty-free provided the imported items are related to the local manufacturing of NFBs production including AAC bricks, cellulous concrete bricks, and block-cement bricks for NFB plants greater than 7.0 million SBUs annually.

27. The mandated increases in NFB usage were strengthened through linkages to:

The EE&EC Law issued by the 12th National Assembly on June 2010 that provides detailed regulations on approved EE technology solutions in the construction sector including the use of NFBs in construction:

In Article No. 6, the strategy, plans and programs of energy use must promote

EE&EC use, prioritize appropriate development of clean energy technology, increase the proportion of renewable energy use; and formulate and implement a roadmap to improve EE&EC performance of construction equipment and construction materials;

In Article No. 15, measures used to improve EE&EC in construction activities should include the use of EC construction materials and NFBs, and the installation of solar energy and biogas;

Decision No. 1427/QDD-TTg on approval of the National Target Programme on EE&EC (VNEEP) during the period of 2012-2015 and signed by the Prime Minister on October 2, 2012. VNEEP has 4 components of which Component No. 3 on EE&EC in buildings has 3 specific EE&EC approaches including:

Application of EE standard regulations in building construction; Application of EC solutions, technologies, equipment and materials; and Use of EE&EC public lighting.

28. Other GoV policies supportive of NFB production include:

Document No. 896 issued on June 1, 2012 by the MoC that provides a roadmap of the removal of clamp kilns as mentioned in Article 6 of the EE&EC Law;

Policies on the use of land for construction material and ceramics production including:

The need for approved state permits to use the land for such purposes that will minimize and limit the usage of rice paddy for non-agricultural purposes including the production of construction materials;

Responsible mining of clay to minimize adverse environmental impacts to adjacent communities;

Application of appropriate natural resource taxes and fees for the use of the land for production of construction materials21; and

Technical standards, specifications and codes for NFB production and quality as set up by the MoC and MoST. Currently, there is a national standard for NFBs, TCVN 6477:2011 which defines standard concrete brick blocks in terms of form, dimension, hollowness and compressive strength. These standards, however, only cover NFBs with

21 This includes a recent increase in the tax rate for brick making clay from 7% to 15%. Provincial and municipal people’s committees have also setup environmental protection fees for clay and controlling the air pollution from traditional clamp kilns.


SBU dimensions and do not cover quality issues of NFBs with dimensions that are different from SBU-sized bricks. The standards also do not cover quality aspects such as dry bulk densities, shrinkage requirements, insulation properties, waterproofing, testing methods and energy intensities of production. The lack of complete NFB standards leads to variable quality of NFBs produced. In addition, there are also no codes covering the various uses of NFB such as load bearing walls, non-load bearing walls, retaining walls, paving units; hence, the construction industry has less confidence in the use of NFBs. The lack of complete standards has led to weak NFB sales. External assistance is required to upgrade TCVN 6477:2011 and other NFB standards to standards that meet international norms.

29. Achieving the targets of Decision No. 567/QD-TTg has fallen under the purview of five

ministries:

MoST has been responsible for the planning and implementing investment plans for research and development (R&D) of NFB production technologies and equipment, providing guidance for NFB technological transfer, and coordinating with MoC in the promulgation of NFB technical standards. The Directorate of Standards, Measurements and Quality (STAMEQ) is the agency responsible for developing Vietnamese technical standards for brick making, which they submit to MoST for promulgation. Current standards on NFB quality and usage have been issued by MoST;

MoC has been responsible for the policies and mechanisms for the promotion of NFBs and defining regulations on their usage. This would include MoC’s oversight of local governments to continue develop and implement a roadmap to reduce FCB brick production and increase the retirement of traditional FCB kilns, planning on increasing lime production to meet increased market demand for lime and NFBs, coordination with non-government entities on the dissemination of promotional information on NFBs, and preparation of policy directions to enhance implementation efficiency of NFB Development Programme up to Year 2020. However, the various provincial-level departments under the MoC such as the Construction Materials Department or the Science and Technology Department have not been able to fulfill these responsibilities due to the lack of local funds (such as their scientific and technological funds, and credit guarantee funds) to promote NFB investments. Furthermore, there is a lack of knowledge amongst domestic non-governmental entities such as the Viet Nam Association of Building Materials (VABM) to assist the MoC in development of NFB policies and standards (that would be recommending NFB standards to MoST) and mechanisms for NFBs promotion, and development of effective FCB kiln retirement plans for local governments. External assistance is required to raise the domestic level of knowledge of NFBs, to provide recommendations for NFB standards for quality, and usage, and to provide guidance to the People’s committees in the preparation of action plans for the migration of FCB kiln owners towards NFB technology22;

The Ministry of Finance (MoF) is responsible for developing guidelines on tax policy for the National NFB Development Programme in coordination with MoC and implementing relevant tax incentive policies. This includes a recent proposal to adjust the natural resource tax rate to 15% for the mining and the use of clay for brick production. While

22 For example, an FCB entrepreneur wanting to switch to NFB technology will find it difficult to obtain information on NFB technology. In addition, a number of SME entrants to the NFB manufacturing market would gravitate towards low cost NFB equipment; a number of the suppliers for inferior equipment do not provide any technical support for their equipment, thus raising the risks of NFB investments in less efficient production lines such as poor operations or longer or more frequent shutdowns.


there are some NFB production incentive policies such as duty free import of NFB making equipment, additional fiscal incentives are still required to make some NFB products such as AAC profitable for private investors. This would include exemptions on corporate income tax that would further reduce the production costs and risk to potential NFB investors23,24;

The Ministry of Natural Resources and Environment (MoNRE) is responsible for policies, laws and regulations on the environmental standards on brick production, the use of agricultural land for FCB production, and the enforcement of these laws and regulations. The lack of capacity of the various provincial levels of the Department of Natural Resources and Environment (DoNRE) is the primary reason for the inability of MoNRE to regulate FCB environmental standards and the mining of agricultural lands for clay for FCBs. External assistance is required to enhance the capacity of local DoNRE to improve their ability to enforce emission standards of brick making activities at the local government levels;

The Ministry of Industry and Trade (MoIT) is responsible for proposing and promoting local NFB equipment manufacturing projects up to 2015 that can qualify for financial incentives under Directive No. 10/CT-TTg;

Provincial and Municipal People’s Committees are responsible for setting up a roadmap and action plan for the reduction of FCB production and local implementation of the NFB Development Programme (in coordination with MoC), implementing disincentives and higher taxes for clay usage for FCB production, and inspecting and monitoring the quality of NFBs produced by NFB plants. While many municipalities are developing these roadmaps, they have not yet commenced the implementation of the action plans. Furthermore, NFB quality control and inspections are not performed due to lack of qualified officials who have specific knowledge on quality control of NFBs. External assistance is required to assist these Committees in the design and implementation of these action plans and in the inspection and quality control of locally produced NFBs.

30. Due to the aforementioned activities of these Ministries, the outcome of the Government’s

policies, standards and directives has not resulted in catalyzing NFB investments in Viet Nam that will meet the targets of Decision No. 567/2010/QD-TTg. The net impact of these policies is the presence of just 70 NFB production facilities throughout Viet Nam with 3.1 billion SBUs manufactured in 2011, comprising only 13% of the brick market (with a target of 25% in 2015 from Decision No. 567/2010/QD-TTg). In a business-as-usual (BAU) scenario, the MoC and MoST will not be able to develop the necessary standards required to catalyze NFB market development in a timely manner to meet the targets of Decision No. 567/2010/QD-TTg. In addition, the general lack of capacity at the local government level and lack of standardization in the NFB market will result in a marginal increase in NFB market share in the brick market at less than 1% annually. An alternative scenario with GEF

23

Complicating implementation of incentive policies is list of key mechanical products which are eligible for receiving financial incentives in accordance with Decision No. 10/QD-TTg on 06/10/2009 of the Prime Minister. MoIT was assigned by the Prime Minister to submit a list of NFB projects and NFB equipment eligible for financial incentives. However, up to now, there has not been any equipment or project that has had access to financial incentives (i.e. investment capital, tax concessions, etc.) as regulated in Decision No.

10/QD –TTg.

24 Without tax concessions, the production cost of AAC will always be higher than that of FCBs because the price of

AAC raw material continues to increase sharply. Since the price of clay has not changed much, the selling price of AAC in some local areas is higher than that of FCBs. The difference of selling prices between these two products is mainly due to the difference in price of raw materials with a very low tax imposed on clayed land for production of FCBs. While the Government’s policy is to eliminate clamp kilns in peri-urban areas, less than half of Viet Nam’s provincial governments have not yet implemented the clamp kiln elimination policy, leading to sluggish sales of locally produced AAC bricks.


envisions assistance being provided to the Government in the re-setting and enforcing of standards for NFB quality, design and implementation of a FCB replacement program, designing and implementing policies to encourage domestic production of NFB equipment to reduce the cost of NFB products and make them more competitive vis-à-vis FCBs, and training provincial and local government personnel on the enforcement of standards and codes for NFBs. The impact of this assistance would be a regulatory framework that would be conducive to accelerating domestic NFB manufacturing and usage to meet Government NFB targets.

Current Brick Production Scenario 31. In Viet Nam, the dominant technologies for FCB production are the clamp kiln and the tunnel

kiln. In 2009, 46% of the FCBs were produced using this traditional technology. Clamp brick kilns are typically small-scale and the most primitive type of brick kiln in Viet Nam. As there is no permanent kiln structure built, the clamp kiln is essentially a pile of molded clay lumps mixed with coal and other combustible fuels. A typical clamp kiln is shown in Figure 2 showing the green bricks being dried under bamboo sheets prior to introduction into the kiln.

Figure 2: Clamp kiln in Ha Nam Province of Viet Nam

32. Tunnel kilns were introduced to Viet Nam in the 1970’s and now produce 46% of FCBs, as

many as the traditional clamp kiln. As of 2009, tunnel kilns were producing 46% of all FCBs in Viet Nam. In tunnel kilns, the bricks are baked while moving through a tunnel on a cart. Tunnel kilns are medium to large-scale production facilities with a high degree of mechanization and are more energy efficient than clamp kilns.

33. The other kilns in Viet Nam that produce the remaining 8% of FCBs include:


The Vertical Shaft Brick Kiln (VSBK) that was introduced in Viet Nam approximately 10 years ago in an effort to provide an energy efficient alternative to the clamp kiln. Fewer than 4% of FCBs are produced from VSBKs. The VSBK kiln is a fixed structure with one or more shafts. Green bricks are loaded from the top of the kiln and pass through the firing zone vertically over a 26 to 30 hour period. The kiln is mechanized and contains measures to improve the energy efficiency of the kiln such as the insulation between the shaft and kiln wall. The VSBK kiln is the most energy efficient kiln technology available in Viet Nam;

The Hoffman kiln which is a fixed structure containing a series of firing rooms to bake the bricks. Fewer than 2% of FCBs are produced using this technology. The entities operating tunnel kilns are generally medium to large enterprises;

Biomass-fired kilns are clamp kilns with modifications designed to allow for better distribution of rice husk due to its lower calorific value. Approximately 2.1% of the FCBs in Viet Nam are produced with biomass and are located mainly in the Mekong Delta River.

Table 2 provides actual FCB production and coal consumption figures for 2009. Annex II contains FCB production and coal consumption figures for 2005-2009.

Table 2: FCB Production and Coal Consumption for 200925

Year Type of burnt

brick kiln

Coal Consumption

tons of coal

Quantity of brick produced

Million bricks

Cubic meter (m3)

bricks produced

2009

Hollow bricks

Tunnel 580,406 4,230.70 5,863,750

Clamp 830,508 4,282.20 5,935,129

VBSK 41,970 395.28 547,858

Hoffman 21,570 190.32 263,784

Biomass 0 205.82 285,267

Solid bricks

Tunnel 990,594 6,993.30 9,692,714

Clamp 1,411,492 6,927.80 9,601,931

VBSK 75,030 580.72 804,878

Hoffman 41,430 297.68 412,584

Biomass 0 296.18 410,505

34. NFBs have existed in Viet Nam since the 1970s but grew modestly in use when the

economies of Southeast Asia experienced spectacular growth through the 1980s and 1990s. This growth accompanied the healthy growth in the number of high rise buildings in HCMC, Hanoi and other large cities of Viet Nam. A small number of buildings financed by direct foreign investment were developed using NFBs as an alternative source of building material, in part due to the higher quality of NFBs in comparison to FCBs, and for the different aesthetic and architecture that NFBs provide when used as a wall building material. As such, a “two-speed” NFB market developed: one niche NFB market for foreign-owned high-rise commercial buildings and the broader NFB market where product quality has been

25 Source: Current Fuel Consumption for Burnt Materials and Development Plan for Unburned Brick Production, issued by the Vietnam Association for Building Materials, October 2010.


variable with poor consumer confidence in NFBs. The environmental benefits and energy savings from the manufacture of NFBs are illustrated on Figure 3, and further elaborated in Para 58 and Annex II of this document.

Figure 3: Environmental Benefits of Non-Fired Bricks

Difficulties in Scaling-Up NFB Production 35. Despite the aforementioned policies, decisions and directives in Paras 23 to 28 to scale-up

NFB production, NFBs only comprise 13% of the brick market in comparison with the target of 25% by 2015. Moreover, the 70 existing NFB plants are only producing at 10 to 50% of design capacity. This is due to a number of factors including lack of NFB-specific knowledge within the organizations such as VABM that play an active role in disseminating information on NFB benefits. This has resulted a lack of NFB knowledge amongst existing and potential NFB entities and entrepreneurs of NFB making equipment; entrepreneur procurement of least-cost NFB equipment with minimal or no training for operational staff; a resulting poor management of production lines and higher operational costs26; production of inconsistent quality NFBs; marginal investment rates of return; and an inconsistent demand for NFBs.

36. There is also an absence of sustained efforts by the Government, notably at the provincial

level with DoST, DoC and DoIT to improve local capacities to plan, design, construct, operate and maintain an NFB plant in place of an FCB plant. In a BAU scenario, NFB plants will continue to be developed without effective guidance from VABM, using the lowest-cost equipment without any formal operational training, and with NFB production at these plants

26 For example, in AAC manufacture, there is a high rate of spoilage due to excessive use of low-quality lime and cement compared to the required norms resulting in uneven quality and higher production costs. In some smaller CBB plants, materials are not properly mixed leading to the production of uneven CBBs, and proper concrete curing is not practiced.

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not likely reach their potential. An alternative scenario with GEF envisions assistance being provided to by DoST, DoC and DoIT to VABM to ensure that the best-value NFB equipment is sourced and potential NFB planners, engineers, operational and maintenance personnel are able to implement an NFB project that will sustainably produce and sell quality NFBs at the plant’s design capacity.

Poor Market Demand for NFBs 37. The market demand for NFBs is also poorly developed contributing to the difficulties of

scaling-up NFB production. Even though NFB prices in some instances are competitive or even lower than FCBs, FCBs still have a dominant 87% share of the brick market. There are several reasons for this including:

Lack of consumer confidence in the quality of NFBs produced;

Resistance by a number of SME entrepreneurs to shift away from the old practices of making FCBs;

Strong preferences by building designers, architects and building developers to use FCBs. They lack knowledge on the design advantages of various NFBs including improved insulation, sonic and aesthetic qualities of a building27;

Lack of promotional capacity within NFB producers; and

Lack of focused market research on NFB usage. 38. In a BAU scenario, there will be an absence of effective guidance from MoC, People’s

Committees and the VABM to improve the knowledge on the engineering and environmental benefits of NFB usage amongst building developers, engineers and architects. This will result in continued apathy towards NFB products and a lack of market penetration of NFBs. An alternative scenario with GEF envisions the transfer of NFB knowledge and awareness to NFB users to create a stronger demand for NFB products, promoting and facilitating FCB entrepreneurs to shift to NFB technology. With the Government’s incentives from Directive No. 10/CT-TTg to create a domestic NFB equipment industry, an alternative scenario with GEF is to assist the MoC and MoIT in the planning of a local NFB equipment manufacturing industry. With the development of this manufacturing industry, future NFB entrepreneurs will be able to access to lower cost NFB equipment to offset the higher costs of imported NFB products, make NFB products more competitive to FCB products, and create employment in Viet Nam. This would serve to increase demand for NFB products in Viet Nam.

Difficulties in Financing NFB Plants 39. For the GoV to scale up its support for increased NFB production (according to Table 1), an

estimated USD 93 million will be required by 2015 with another estimated USD 128 million28 required between 2016 and 2020. Catalyzing this level of investment will require strong GoV support to more than 500 NFB investments in the next 7 years29 plus improved access to robust NFB technologies, increased knowledge of entrepreneurs and financers of NFB technology and increased availability of NFB financing. While commercial banks could

27

For example, the use of AAC bricks requires a specialized mortar for construction that is currently expensive, leading to AAC products at times failing to meet performance requirements. 28 NFB plant capital costs are assumed to be USD 0.192 per SBU based on UNDP surveys in 2012 on the costs of 3 demonstration CBB plants for Component 4 (total capital cost of USD 1.24 million for an annual production of 65 million SBUs) 29

This assumes the average NFB investment is for an NFB plant with annual production capacity of 22 million SBUs


provide loans of up to 70% of the capital cost, concessional financing sources (that could be utilized for the remaining 30%) such as the VEPF will require additional capital and streamlined approval procedures to effectively achieve the goals of the NFBD Programme.

40. As previously mentioned, production at existing NFB plants is only at 10 to 50% capacity. This is due to a number of factors with the outcome that there is a poor perception of NFB investments amongst potential financers. Access to finance for NFB entrepreneurs is difficult for a number of reasons:

Financial institutions do not have sufficient knowledge of and confidence in NFB technology to provide loan finance;

NFB investments are not profitable based on the operational performance of existing NFB plants where production capacities are often under-utilized;

There is limited financial encouragement to shift from FCB entities to NFB production, as these owners usually have few assets or low amounts of available capital available to modernize to an NFB production line30; as such, they cannot obtain a loan unless they have access to a loan guarantee. At this time, there is no dedicated loan guarantee fund for SME NFB investors;

NFB entrepreneurs have limited access to VEPF or other concessional sources of finance since the application for VEPF is time consuming with a high transaction cost notwithstanding their low official lending rates31. In addition, there is a lack of clear guidelines on how to access these sources of finance making their application procedures arduous and complicated; and

The lack of capacity at the provincial and municipal People’s Committees, provincial-levels of DoC, DoST, DoIT and VABM to provide the necessary outreach to potential NFB entrepreneurs on financing options for NFB plants.

41. In a BAU scenario, there will be a continued lack of knowledge of NFB investments within Viet Nam’s financial sector, placing further risks that the NFB market penetration targets of Decision No. 567/2010/QD-TTg will not be achieved. In addition, there will be a continuation of a lack of outreach from provincial and municipal People’s Committees, provincial government departments and the VABM to disseminate information on financing options for NFB plants. An alternative scenario with GEF envisions assistance being provided to MoST to build the knowledge of the financial sector in Viet Nam towards the attractiveness of NFB investments and the capacity of the financial sector to engage FCB entrepreneurs to convert to cleaner NFB technologies.

42. In summary, it is unlikely that the NFB industry will meet the 30-40% target by 2020 without removing the aforementioned barriers. Under the business-as-usual scenario, the share of NFBs in the overall building bricks market will only increase by less than 1% per year, meaning that it would increase from 10% in 2010 to less than 15% (instead of the 20% target) in 2015 and less than 20% (instead of the 40% target) in 2020.

30

UNDP brick survey results from September 2012. 31 This includes the Vietnamese Environmental Protection Fund (VEPF), the National Scientific and Technological Development Fund (NAFOSTED), the National Technological Innovation Fund, Loan Guarantee Fund for EE&EC projects, the provincial and municipal scientific and technological funds and loan guarantee funds


STRATEGY

Project Rationale and Policy Conformity

43. The proposed project fits into the GEF-5 Climate Change Strategic Objective 2: Promote market transformation for energy efficiency in industry and the building sector. The Project will contribute to the reduction of GHG emissions through the transformation of the building brick market towards the increased application of non-fired bricks (NFBs) in building construction. This will be achieved through the promotion and facilitation of local manufacturing of bricks using NFB technology and utilization of NFBs in building construction. Moreover, the application of NFB technology will also contribute to the improvement of energy efficiency in Viet Nam’s brick making industry, with the co-benefit of reducing GHG emissions from that sector. It will also lead to (albeit indirectly) the reduction in the energy consumption of, and GHG emissions from, the building construction sector on account of new buildings that will be constructed (and possibly existing buildings that will be retrofitted) with NFBs.

44. The main programme that is designed to work towards the transformation of brick making

into a modern energy efficient industry in Viet Nam is the “Master Plan of Construction Material Development up to 2020”. To boost NFB production, GoV approved the “Non-Fired Brick Development Programme” (NFBD) on 28 April 2010 with national targets set by the Prime Minister’s Decision No. 567/2010/QD-TTg.

Country Ownership: Country Eligibility 45. The GoV ratified the UN Framework Convention on Climate Change on 12 May 1994.

Country Drivenness 46. The proposed project is consistent with the second priority identified in the GEF National

Portfolio Formulation Exercise (NPFE) and is in line with the major national policies and programmes on energy conservation and energy efficiency (EC&EE) and environment friendly technologies, including the application of NFB technology to brick making in Viet Nam. Among these are:

Circular No. 01/2004/TT-BCN issued July 2, 2004 on Guidelines of EE&EC in production enterprises;

Decision No. 80/2006/QD-TTg issued on 14 April 2006 on Approval of the Electricity Saving period 2006-2010;

Law on Technology Transfer approved by the National Assembly on 29 November 2006;

The Law on Environmental Protection, Article 84, point 3 on Management of GHGs and ozone layer-depleting gases: the State encourages production, business and service establishments to minimize GHG emissions;

Decision No. 121/2008 of the Prime Minister on the “Master plan of construction materials development up to 2020” of construction material production toward 2020;

Decision No. 121/QD-TTg issued on 29 August 2008: Approval of the Master Plan on Construction Material Development up to Year 2020;

Decision No. 567/2010/QD-TTg issued on 28 April 2010: Approval of the Non-Fired Brick Development Programme up to 2020, approved by the Prime Minister on 28 April 2010;


Law on Energy Efficiency and Conservation approved by the National Assembly on 17 June 2010;

Directive No. 10/CT-TTg on increase of non-fired construction material usage and limitation of FCB usage and production issued by the Prime Minister on 16 April 2012;

Decision No. 1427/QD-TTg dated 2nd October 2012, National Target Program for Energy Efficiency and Conservation (NTP-EE&C) period 2012-2015 approved by the Prime Minister; and

Decision No.1216/QĐ-TTg dated on September 05, 2012 on “the National Strategy on Environment Protection to 2020, with Vision to 2030”.

Design Principles and Strategic Considerations

47. The barrier removal activities of this proposed GEF project are designed to catalyze and sustain investments in the installation of non-fired brick making plants, and meet the GoV’s targets in Decision No. 567/QD-TTg for increasing the share of NFBs in Viet Nam’s market for building materials. The Project activities are designed to create the enabling conditions to increase the NFB market share that will improve:

Investor confidence through access to quality NFB equipment and plant assembly expertise, improved operational and management skills of plant managers and personnel, and the improved production of NFBs that will meet international NFB quality standards;

Government regulation of the industry to international norms for NFB products and related equipment that will increase consumer confidence; and

Knowledge of engineers, architects and building developers on the advantages of NFB products that will mainstream demand for NFBs as building materials.

With the GEF project in place over an implementation period of 5 years, there will be a greater likelihood of the GoV meeting its targets for increased NFB market share by the end of 2018, the scheduled end of the GEF project.

48. With regards to technical assistance to demonstrate NFB technology and improve production at existing NFB plants, the Project activities will be guided by the following strategic considerations:

Proposed GEF-incremental activities will be geared towards maximizing direct and indirect GHG reductions;

Project TA will be weighted towards pilot concrete brick block (CBB) plants as they are more scalable and replicable than other NFB technologies;

The higher probability that existing clamp kiln and VSBK owners would shift to CBB technology (instead of AAC technology) due to their scalability, lower capital cost and simpler operation;

AAC plants have higher capital costs and a smaller target for market share by the GoV. As such, TA for AAC bricks will be limited to existing AAC plant owners and operators, and efforts to improve the efficiency of AAC plant productivity and energy consumption. The outcome of these efforts may improve the attractiveness of AAC investment opportunities that will work towards GoV’s NFB targets of Decision No. 567/QD-TTg; and,

The Project will provide the necessary TA to ensure the NFB demonstrations are operated as designed and to build investor confidence that NFB rates of return are


attractive and beneficial to the continued modernization of Viet Nam’s industrial sector. This will involve the recruitment of companies or individuals from Viet Nam or another country that will ensure successful demonstrations of NFB technologies.

49. In consideration of the more than USD 221 million to be raised for financing NFB plants until

2020, the Project will make strong efforts as early as possible to strengthen linkages with all possible financing sources, on the basis of successful NFB demonstrations providing positive perceptions as good investments and generators of GHG emission reductions.

Project Goal, Objective, Outcomes and Output/Activities 50. The proposed project is intended to address the above barriers and assist the NFBD

Programme through an integrated set of four components comprising: (1) policy support for NFB technology development, (2) technical capacity building on NFB technology application and operation, (3) sustainable financing support for NFB technology application, and (4) NFB technology application investment and replication.

51. Component 1: Policy support for non-fired brick (NFB) technology development. This

component will address the strengthening of MoST and MoC standards and local government capacity to implement central government policies and to regulate the growth of NFB production and usage. The expected outcome from the outputs that will be delivered by the activities to be carried out under this component is the approval and enforcement of an improved legal framework to encourage NFB production and use in building construction, technical standards, and enhanced government capacity and knowledge to regulate development of NFB manufacturing and usage. The following outputs will contribute to the achievement of this outcome:

Output 1.1: Strengthened legal framework to promote NFB production and utilization.

While there are a number of supportive NFB policies already in place, this output is designed to strengthen MoST and MoC policies to induce transformative progress towards NFB investment. This will entail the implementation of the following activities:

o A review for NFB incentive policies on the reduction or exemption of sales tax on

cement and other NFB raw materials, and elimination of sales tax on NFBs. The policy could also involve higher permitting costs or higher taxes for FCB kilns that will raise the cost of using agricultural land as a raw material source for clay bricks. The review can provide recommendations to MoST, MoC and MoF on the extent of these reductions that will reduce NFB investment risks and catalyze NFB investments;

o Formulation of a policy framework for technology transfer for MoST with strengthened versions of existing technology transfer policies. This will clarify the roles and responsibilities of the central government agencies and provincial and local agencies on specific actions to be taken to transfer NFB technology. This activity will also assist in ensuring that all provincial and local authorities implement technology transfer in a timely manner that will meet the Government’s NFBD Programme timeframe;

o Review and recommendation of new or modifications to existing policies that make references to compulsory testing of NFBs to strengthen them thereby ensuring quality assurance of NFBs on the market. These policies will cover testing of NFBs at the plant, the frequency and types of testing required, laboratories where NFBs


can be tested, the conditions for use of mobile NFB testing equipment, fees for testing of NFBs and remedial actions in the event NFBs do not meet specifications; and,

o Formulation of a policy framework for MoC for the structured NFB information dissemination from central government policies to provincial government NFB promotional programmes. The framework will also define the roles and responsibilities of the respective agencies in information dissemination including funding, preparation of circulars, and types of media to be used.

GEF assistance is required for implementing these activities.

Output 1.2: Strategies to implement FCB kiln replacement programme. This output is

designed to strengthen the current process of formulating and implementing People’s Committee strategies based on a MoC roadmap to effectively replace existing FCB kilns. This will entail the implementation of the following activities:

o Assist MoC in the analysis of the market of operational FCB kilns throughout Viet

Nam segregated into clamps, VSBKs and tunnel kilns with expected retirement dates, along with a setting of priorities and timeframes to retire existing FCB kilns and replace them with NFB operations;

o Assist MoC in the setting of priorities based on provinces with existing or numerous clamp kilns to be retired and where potential NFB demand would be the strongest; and,

o Work with MoC to formulate strategies for targeted People’s Committees on enforcing the legal framework, a timeframe for implementation on the replacement of FCB kilns. Further assistance can be provided on identification of general sources of raw materials for NFB manufacture; sources of financial support including local funds for science and technology; and specific information dissemination activities to promote NFB technology and utilization.

GEF assistance is required for implementing these activities.

Output 1.3: Recommended policies and standards to encourage domestic production of NFB equipment and technology. A report will be prepared and submitted to VABM, MoST, MoC and MoIT that assesses local manufacturing capacity, and provides policy recommendations for the local manufacture of standardized NFB-making equipment and components. GEF assistance is required to prepare this report.

Output 1.4: NFB product standards and building codes. The activities leading to this

output will assist MoC to augment the current national standard for NFBs as well as regulations, standards and codes based on best international practices that will define and in effect encourage the use of NFBs in buildings and other construction uses. For example, national standards for NFBs TCVN 6477:2011 will be expanded to include NFBs outside of SBU dimensions for form, dimension, hollowness and compressive strength, and quality aspects such as dry bulk densities, shrinkage requirements, insulation properties, waterproofing, and testing methods. Building codes for the use of NFBs will be formulated for load bearing walls, non-load bearing walls, retaining walls, paving units, and other building uses. GEF assistance is required to implement these activities.


Output 1.5: Energy efficiency and emission standards for NFB production. The energy consumed per SBU will be an effective measure against which to compare the energy efficiency between FCB and NFB manufacturing processes. These EE standards will be set up by investigating energy intensities of FCB and NFB processes from other countries and comparing it with Viet Nam, and recommending protocols to MoST and MoNRE for monitoring energy consumption from operations of the NFB projects. GEF assistance is required for the analysis of energy intensities of NFB demonstration plants and the setting of these standards and monitoring protocols.

Output 1.6: Trained government personnel for promotion and improved regulation of the

growth of NFB production and utilization. This activity is designed to provide the necessary resources for the training and building of capacity of government personnel primarily at the provincial and local levels (i.e. DoST, DoIT, DoC, TTCs, ECCs and STAMEQs) to implement and enforce the various policies, standards and codes. This will entail the implementation of workshops and seminars to address the following topics:

o Promotional policies, guidelines, standards and codes; o Approaches for assistance to SMEs in the retirement of FCB kilns; o Accessing and financing NFB plant technology; o NFB production optimization; o Energy consumption and GHG reductions resulting from the market transformation

under the NFBD Programme; and, o The formulation of awareness raising and promotional programmes in mass media

to disseminate the GoV’s policies towards the increasing use of NFBs in construction32.

GEF assistance is required for the technical assistance to prepare and conduct capacity building workshops;

52. Component 2: Technical capacity building on NFB technology application and

operation and use of NFB products – This component will address the lack of technical capacity amongst the private sector in Viet Nam to plan, implement and operate a NFB plant, and the lack of critical demand for NFB products. The expected outcomes from the outputs that will be delivered by the activities to be carried out under this component will be the increased availability of technically skilled and qualified local suppliers and service providers who are able to plan, design, engineer, install, maintain and operate NFB plants to produce consistent NFB products that meet international quality standards; entrepreneurs and producers who are capable of producing NFBs that meet product standard quality; and the enhanced knowledge of engineers, architects and building developers on the various advantages and uses of NFBs in construction, to increase demand of NFBs for use in the construction industry. The following outputs will contribute to the achievement of these outcomes:

Output 2.1: Established strategic partnerships for NFB technology transfer. This output

will involve the implementation of activities such as the screening and sourcing of international NFB advisors by VABM who can work closely with local NFB suppliers, service providers and entrepreneurs to finalize the partnerships. This will result in an increase in the number of strategic partnerships between the numerous potential NFB

32 This may include an analysis of target audiences, choice of media to disseminate messages (including television, radio, websites and promotional campaigns), and feedback mechanisms to increase effectiveness of the programs.


entrepreneurs, international NFB suppliers operating in Viet Nam and local service providers for the transfer NFB technology. GEF support is required to screen and source international NFB advisors who will work with local NFB businesses;

Output 2.2: Completed technical courses on planning NFB investments. This output will

involve carrying out activities such as the design and conduct of training courses on the planning of NFB investments. This will require:

o The provision of technical assistance from international NFB suppliers and

manufacturers to the VABM, local engineering and consultancy services and the potential NFB plant owners on best practices of planning NFB plants. International and local NFB experts will prepare guidelines, courses and proposals to cover project set-up, cost-benefit analysis, energy saving potential and GHG emissions reduction of the NFB plant and financial plans;

o Preparation of planning proposals targeting potential financing partners such as the GoV, interested investors (local and foreign), international donors and international climate funds;

o Delivery of technical courses on the aforementioned best practices and preparing planning proposals.

These activities will also form part of the VABM’s technical capacity building to enable it to become a credible service provider to the NFB industry, and will be closely linked with Output 4.1. GEF support is required for the necessary TA to deliver these technical courses on NFB investments to VABM and potential NFB plant owners and financers and preparing the planning proposals for potential financing partners;

Output 2.3: Entrepreneurs with firm plans to expand local manufacture of NFB-making

equipment and associated components. This output will be delivered through technical assistance activities such as the evaluation of the feasibility of, and the requirements for expanding the existing businesses for the local manufacture of NFB equipment and associated components. Recommendations for local manufacturing of NFB equipment for domestic use (and possibly for the export market) will be prepared and submitted to VABM, MoST and prospective financing partners. GEF support is required for the necessary TA to prepare this evaluation and for technical assistance to potential NFB plant manufacturers on preparing plans and documentation for required equipment and capital outlay for an NFB production line;

Output 2.4: Completed training courses on the design, construction, production

operation and maintenance of NFB plants. This output will involve:

o Preparation of material for comprehensive training courses on the design, construction, economic feasibility evaluation, operation and maintenance of NFB plants for local equipment suppliers, manufacturers, repair and maintenance service providers and NFB operations plant personnel. The training course component on production operations will emphasize adherence to set government standards for quality of locally manufactured NFBs, and specific energy consumption standards for NFB production;

o Delivery of NFB training courses for improving the ability of NFB plant managers and personnel in designing, constructing, operating and maintaining NFB system equipment and components. The training courses will be a part of a NFB certification programme that will form part of the required capacity building for VABM, NFB


entrepreneurs and suppliers, and service providers to enable them to deliver these courses after the completion of the GEF Project.

GEF support is required for the necessary TA to prepare and deliver training courses and certification programme on the design, construction, operation and maintenance of NFB plants.

Output 2.5: Completed seminars on the use of NFB as a construction material. This

output will involve:

o The assistance of a marketing professional in studying the building material demands of the Vietnamese construction sector;

o Preparation and delivery of seminars targeting VABM and other targeted end-users such as builders, architects, and masons and house builders on the advantages of NFBs enabling them to make an informed choice on their use in construction;

o Preparation and dissemination of NFB awareness raising posters and brochures during various training and awareness raising programs. VABM can be the initial distributor of these promotional materials to various end-users and various government and non-governmental agencies for display and distribution specifically during national and international exhibitions on building materials and construction.

GEF support is required for the necessary TA to determine the building material demands of the Vietnamese construction sector; prepare and deliver NFB seminars and awareness raising materials.

Output 2.6: Technical assistance to VABM to promote NFB usage and facilitate NFB

investments. VABM will be the recipient of technical assistance to continue NFB promotion after the completion of the Project. They currently require technical assistance to evolve into an organization to facilitate NFB investments, and to be a focal point for MoC and the Government of Viet Nam to attract and regulate private sector investments and increase NFB production. Technical assistance to VABM will include assistance to:

o Upgrade and maintain a VABM website to provide information on opportunities to

invest in NFB manufacturing; o Disseminate information on NFB standards and codes; o Build their capabilities to become a NFB investment facilitation center; and, o Improve their capabilities to report on progress of NFB market transformation during

and after the Project. GEF support is required for the technical assistance to VABM to upgrade and maintain their website, to build their capabilities to become a NFB investment facilitation center, and to improve their capabilities to monitor and report on the progress of NFB market transformation.

53. Component 3: Sustainable financing support for NFB technology application. This

component is primarily designed to address the barrier concerning the lack of access to finance for potential NFB project proponents. This would include the strengthening of linkages between potential NFB investors and existing financial sources including funds for energy conservation (EC), the National Technology Innovation Fund (NATIF) managed by MoST, government concessional financing (such as the Viet Nam Environmental Protection Fund (VEPF), local commercial banks who finance EC&EE investment projects such as


VietinBank and Techcombank, and loan guarantee funds under NAFOSTED. The expected outcome from the outputs that will be delivered by the activities to be carried out under this component is the improved availability and sustained access to financial sources to potential investors and SMEs for NFB production plants and manufacturing facilities for NFB equipment. The following outputs will contribute to the achievement of this outcome:

Output 3.1: Completed study on the viable financing sources for scale-up of NFB

investments. With over USD 221 million required for financing NFB plants before 2020, an investigation of viable financing sources to meet this financial target will be conducted. The financing sources to be studied may include those listed above as well as donor funds33. The study will need to address the use of funds as loans and loan guarantee funds (LGF) since many of the potential entrepreneurs are likely SMEs who are unable to obtain financing due to lack of collateral assets. The study will also provide an overview of the expected availability of the various sources of finance based on expected retirement dates of FCB kiln operations. GEF support is necessary for the TA to complete this study for MoST of viable financing sources for NFB scale-up;

Output 3.2: Completed workshops for financing institutions on NFB investments. The

delivery of this output will involve the conducting of workshops for the training of loan officers on evaluating the financial viability of NFB projects. This would include officers from VietinBank and other commercial banks, VEPF, NAFOSTED, NATIF, the Vietnam development bank who manage and operate the loan guarantee fund for energy saving projects, and provincial level science and technology funds and credit guarantee funds. Workshops can focus mainly on helping financial institutions and banks to develop their loan procedures and loan guarantees for financing NFB production projects. The workshops will also serve as campaigns addressed towards enhancing the financial institution interest in providing financing to NFB SMEs. This will also involve securing support from these institutions in financing pilot projects under Component 4. GEF support is required for TA in the preparation and delivery of these workshops and associated capacity building activities;

Output 3.3: Established Business Links on NFB Manufacturing. The delivery of this output will involve establishing links between VABM, MoST, prospective SMEs and financial institutions identified from Output 3.1. This will be accomplished through the organization of workshops, exhibitions and seminars. GEF support is required for TA in the organization and conduct of these workshops, exhibitions and seminars;

Output 3.4: Action Plan for Financing NFB SMEs – With knowledge on the availability of

NFB financing, market surveys of NFB growth, the retirement of FCB kilns, and experience in the development and operation of pilot NFB plants (Component 4), an action plan on NFB financing to meet the NFB targets defined in Decision No. 567/QD-TTg can be prepared. The action plan will be prepared for implementation by MoST with the support of VABM outlining the essential steps and actions to be taken to facilitate financing approvals of NFB plants for SMEs including time lines. GEF support is required for the necessary TA to prepare the action plan with MoST and VABM.

33 This may include World Bank, ADB, JICA, GIZ, SDC, other bilateral donors, the Green Credit Trust Fund from the Swiss Government for clean production projects for Viet Nam, the EIB Environment Credit Program (EECP), Carbon Funds and other buyers of carbon credits (Certified Emission Reductions, CER).


Output 3.5: Operational financing scheme for NFB projects – This output is intended for assisting potential NFB investors in accessing a functional financing mechanism that involves four capital sources:

o NFB project owner equity: Potential NFB investors will be assisted securing financial

support from local financial institutions. This is in the light of the fact that most financial institutions will only finance up to 70% of the capital cost which will force potential NFB investors to finance the remaining 30% through their own equity. The average NFB capital investment in Viet Nam is anticipated to be in the order of USD 350,000;

o Financial institutional sources: The potential NFB investors will be assisted to access commercial or governmental concessional lending sources (such as VEPF). Technical assistance will be provided in the screening of potential NFB investors who would best qualify for loans34. However, given that many of the applicants will be SMEs with FCB kilns and no prior history of bank loans, technical assistance will be provided to them in the design of a financing package through a combination of concessional and commercial lending sources35;

o Loan guarantee sources: Guidance will be provided to potential SME NFB investors in applying for loan guarantees from the LGF in the event they do not have sufficient collateral. They can obtain the loan guarantee from LGF managed by NAFOSTED. The process can take up to 6 months;

o Carbon finance: If appropriate, guidance will be provided to potential SME NFB investors to register under a CDM-PoA for NFB manufacture that was registered in May 2012 with INTRACO serving as the CME36. However, with low carbon prices, there may not be any impact from carbon financing until there is a recovery of carbon prices.

The outcome from the delivery of this output will be the availability of financing for NFB projects and NFB manufacturing plants for SMEs as well as larger enterprises with collateral that can be promoted by MoST and VABM. GEF support is required for necessary TA to improve access to NFB project financing for potential investors.

54. Component 4: NFB technology application, investment and replication. This component will address the lack of knowledge and awareness of NFB technology through the demonstration of new NFB production lines through actual investments in NFB applications, including their identification, feasibility studies, engineering design, viable financial arrangements, installation, operation and maintenance, documentation, dissemination, technical support, monitoring, evaluation and replication. This component will also demonstrate the use of NFBs in various applications in construction, particularly in building construction where the demand for NFBs is the highest. The expected outcomes from the outputs that will be delivered by the activities to be carried out under this component are: (1) Boosted confidence in the financial and technical feasibility and economic and environmental benefits of NFB production among financial institutions, brick manufacturers, and regulatory bodies; and (2) Increased overall market share of NFBs. It is

34 These are generally business entities with proven corporate successes, good projects, valuable collateral assets, and good loan pay back history 35

With the recent down turn in the Vietnamese economy, financial institutions have recently been only lending up to 50% with interest rates predicted to be in the range of 10% to 13% during the next 5 years. This raises the importance of the profile of the NFB investor to be able to repay loans on a timely basis 36 http://cdm.unfccc.int/ProgrammeOfActivities/poa_db/YOF4P9EDIMQ8673J0NUL2SCR1VW5ZT/view

http://cdm.unfccc.int/ProgrammeOfActivities/poa_db/YOF4P9EDIMQ8673J0NUL2SCR1VW5ZT/view


expected that MoST, MoC and VABM will work closely with Project personnel on the activities of this component. The following outputs will contribute to the achievement of these outcomes:

Output 4.1: Bankable Feasibility Analyses of Selected Demonstration NFB (CBB) Sites.

Selection criteria for the selection of three pilot CBB sites will be formulated37. On the basis of these selection criteria, three pilot NFB CBB sites will be chosen and feasibility analyses prepared for the NFB plant entrepreneurs. A study for each site will contain the technology background, site description, plant layout and design, sources of raw material, implementation plans for plant assembly and commissioning, proposed plant operations, an environmental impact assessment, capital cost estimates, financial cash flows resulting from plant costs and revenues, and recommended financing schemes for the demonstration NFB plants. GEF support is required for the necessary TA in the preparation of the bankable feasibility analyses;

Output 4.2: Financing for Demonstration NFB Projects. The delivery of this output will

involve assisting participating NFB entrepreneurs in preparing applications for the financing of the operation and maintenance of each demonstration site. Such activity will also involve establishing collaboration agreements with financing banks and financial institutions to streamline the process of financing application wherever possible. The experiences of financing these NFB demonstrations will be disseminated in Output 3.5. GEF support is required for the necessary TA to obtain approved financing for NFB demonstrations;

Output 4.3: Completed preparations for implementing NFB projects. The delivery of this

output will entail the provision of technical assistance and guidance for new NFB entrepreneurs to prepare for design and construction of a demonstration NFB plant that includes:

o Preparing detailed engineering plans for the NFB plant to a level where the designs

can be used in tender documentation; o Settling land-related costs such as rent, land clearance, resettlement activities, and

compensation for loss of trees; o Preparation of tender documents for construction, equipment, installation and

commissioning, all of which will contain technical specifications and design, implementation schedule, quality assurance, and contract terms; and,

o Tendering for the construction phase process (announcement, information, tender opening, evaluation, negotiation, tender award and contract signing).

GEF support is required for TA in the preparation of detailed engineering designs, tender documents and the tendering process for demonstration NFB projects;

Output 4.4: Installed and operational NFB demonstration plants. This output is intended to be a showcase of the viability of designing, engineering, installing and operating a

37 The purpose of selection criteria for the pilot NFB plants is to ensure that the development and operation of the

pilot plant can demonstrate the potential of NFB plants as good investments. As such, selection criteria for pilot NFB sites needs to include the owner’s site being located near to good road access and demand centers for NFBs, site having proximity to good power and reliable power supplies, plant site land is owned or has a long term lease, plant owner and operator with good track record in operating industrial businesses, and plant owner of entrepreneur has access to a line of credit that is available to build and operate the plant.


state-of-the-art NFB plant. Assistance will be provided to ensure proper quality controls over construction, installation and commissioning work of the NFB plant as per contract specifications. This will safeguard the integrity of the demonstration plants from which the implementation and construction process for NFB plants can be replicated. GEF support is required for assistance to ensure quality controls during implementation and commissioning of the NFB demonstration plants.

Output 4.5: Trained personnel to optimize NFB production. This will involve training

demonstration plant personnel in the establishment of specific conditions and criteria for the operation, maintenance and NFB production efficiencies of the demonstration NFB plants. Guidance on specific management of the operations and supervision of plant personnel will be required to optimize production and to minimize energy consumption in the manufacture of NFBs. Plant managers and plant personnel at the demonstration plants will have had operations and maintenance training from the Project (Output 2.4). Conversely, activities from the demonstrations will provide feedback to improve the training provided in Output 2.4. In addition, plant managers will learn to manage their operational capital to safeguard plant operations by planning for possible negative cash flows if NFB sales are insufficient to cover minimal plant operational costs; and creating an emergency fund or insurance in the event of potential breakdowns that are not covered by supplier guarantees. The outcome of this activity would be the emergence of plant managers and operational staff capable of maximizing NFB rates of return for investors. GEF support is required for the necessary TA to optimize NFB plant production.

Output 4.6: Monitoring and evaluation reports on the operational and financial performances of the demonstration NFB projects. This important activity will monitor NFB production and energy consumption, compile this information into a format that can confidently quantify the GHG reductions from NFB operations. The activity will involve:

o Collection of baseline energy consumption and production surveys from FCB kiln

operations; o Survey of NFB equipment operation, energy consumption (from raw material

extraction, transport and electricity consumption) and NFB production; o Preparation of evaluation reports on the 3 NFB demonstration plants including

lessons learned on their implementation; o Implementation of a reporting mechanism to MoNRE on NFB plant energy

consumption and GHG emissions (from raw material extraction to electricity used for NFB production); and

o Implementation of an NFB information dissemination programme with the intention of increasing the likelihood of NFB replication.

GEF support is required for all activities to prepare reports for the monitoring and evaluation of NFB production efficiencies and energy consumption;

Output 4.7: AAC plants with improved production efficiencies. Given the GoV’s targets to increase AAC production and products, an energy and production audit of an existing AAC plant will be conducted to identify opportunities and design recommended actions to improve its production and energy efficiency. Improvements in the targeted existing AAC plant will be on the use of industrial waste flyash from coal-fired power plants, preparation of raw materials, production process and efficiencies, quality control to reduce current spoilage rates of AAC plants, and energy consumption per AAC brick


sold. Assistance will be provided to AAC plant management and operational personnel to undertake the recommendations of the energy and production audit and improve the production and energy efficiency of the AAC plants. GEF support is required for all activities to audit and improve AAC production efficiencies and reduce energy consumption;

Output 4.8: Completed demonstration on the use of NFB products. Products from the

demonstration CBB plants and improved AAC plants will be sold to various building and construction projects to demonstrate the use and benefits of NFB products. The buildings and construction projects selected will demonstrate the full cycle of building development integrated with building material designs that include the use of CBBs and AAC bricks. The use of these NFBs will be demonstrated for the benefit of building developers and construction personnel. In particular, a demonstration on the use of lighter AAC bricks will assist in reforming building codes to consider the advantages of lighter structures and reduced foundation costs. Moreover, other aspects of NFB products advantages such as improved insulation and aesthetics can also be demonstrated. The demonstration of NFB use will be enhanced through demonstrating the life-cycle of NFB products in the buildings. With the support of MoC, VABM is expected to take a leading role in this activity. VABM will provide TA services to local building material producers and suppliers in the design of NFB production facilities and the preparation of a bankable design and feasibility study to obtain the necessary financing, especially loans, for their NFB manufacturing investments. Since this is a programme designed to meet a national priority, oversight of this process will be undertaken by the Ministry of Science and Technology (MoST) and Ministry of Construction (MoC). The VABM is currently supported financially by its member companies and MoST and will be able to financially support post-project TA for incoming entrepreneurs. The NFB project is designed to ensure that the VABM will not only have the technical capacity to provide technical services to future NFB manufacturing ventures of its member companies but also to financially support the provision of such services. In this regard, it is also expected that funding for such service will become part of its regular annual operating budget. GEF support is required to assist in the demonstration of NFB product use.

Output 4.9: Plans for replication NFB plants. Technical assistance will be provided for

the implementation of more than 24 NFB plants after the successful implementation of demonstration NFB plants with a capacity of up to 0.965 billion SBU per year. The technical assistance will utilize all lessons learned from the demonstration CBB and AAC plants. As another measure to facilitate NFB investments, the Project will consider partial support to engineering service providers for the preparation of bankable feasibility studies by new NFB entrants. With the support of MoST, VABM is expected to take a leading role on the activities of this output. GEF support is required for the necessary TA for planning replication NFB plants.

A significant portion of the technical assistance of Component 4 will be on the development of the feasibility studies, engineering designs and construction and equipment installation support, which will be outsourced to local firms with foreign staff to bring in the best international practices for NFB plant development and production; this will assist local firms in building their capacity to become service providers to other NFB plants, proposed and existing. All activities will mainly involve the promotion of concrete brick blocks (CBBs), due to their relatively lower capital cost in comparison to AAC brick plants. The exception to this


is Output 4.8 which will require technical assistance for improving efficiencies at existing AAC plants. Preliminary sizing of pilot NFB plants are provided in Annex VI.

55. Without these planned interventions (such as successfully developed and implemented NFB

demonstrations, and improvements in AAC production and energy efficiencies), the risk of GoV not meeting its NFB targets for under Decision No. 567/QD-TTg becomes higher. Figure 4 is a flowchart of how the Project will be implemented. Figure 5 is an indicative implementation schedule.

Figure 4: Project Flowchart

Overall

outcome:

Reduced

GHG

emissions

Outcome 1: Improved NFB

legal framework, and enhanced

government capacity to

regulate NFB developmentSlow

growth of

NFB

usage in

Viet Nam

Lack of

technical

capacity to

support

NFB growth

targets

Lack of

harmonious

policies to

promote NFB

production and

usage

Technical assistance/

Awareness raising / training programs

Outcome 4: Boosted confidence in NFB

technology application resulting in an

increased market share of NFBs

GEF Project Post-GEFPre-GEF

Outcome 2: Increased availability of

technically skilled and qualified local

service providers for NFB plants, and

enhanced stakeholder knowledge on

NFB usage

Poor

access to

financing

for NFB

projects

Project

Objective:

Increased

share of

NFB in

Viet Nam Outcome 3: Improved

availability and sustained

financial support for NFB

technology applications


Figure 5: Indicative Implementation Project Schedule

Component

1. Policy support for non-fired brick (NFB) technology development 1.1 Strengthened legal framework to promote NFBs 1.2 Strategies to implement FCB kiln replacements 1.3 Recommended policies and standards on domestic production of NFB equipt 1.4 NFB product standards and building codes 1.5 Energy efficiency and emission standards for NFB production 1.6 Trained government personnel for improved regulation of NFB growth

2. Technical capacity building on NFB technology application and operation and

use of NFB products 2.1 Established strategic partnerships for NFB technology transfers 2.2 Completed technical courses on planning NFB investments 2.3 Entrepreneurs with firm plans to expand local NFB equipt manufacturing 2.4 Completed training courses on design, construction and operation of NFB plants 2.5 Completed seminars on the use of NFB as a construction material 2.6 Technical assistance to VABM

3. Sustainable financing support for NFB technology application 3.1 Completed study on viable financing sources for NFB investments 3.2 Workshops for financing institutions on NFB investments 3.3 Strengthened business links 3.4 Action plan for financing NFB SMEs 3.5 Operational financing scheme for NFB projects

4. NFB technology application investment and replication 4.1 Bankable feasibility analyses of selected demonstration NFB (CBB) sites 4.2 Financing for demonstration NFB projects 4.3 Preparations for implementing NFB projects 4.4 Installed and operational NFB demonstration plants 4.5 Trained personnel to optimize NFB production 4.6 Monitoring and evaluation reports on demonstration NFB projects 4.7 AAC plants with improved production efficiencies 4.8 Completed demonstration on the use of NFB products 4.9 Plans for replication NFB plants

Commencement of GEF Project Completion of GEF Project

Intense ActivityIntermittent Activity

2016 2017 2018 20192014 2015


Key Indicators, Risks and Assumptions

Indicators 56. The most direct impact of the proposed Project as it relates to core GEF objectives is the

reduction in CO2 emissions from pilot NFB projects in Component 4 to demonstrate a shift away from the carbon intensive FCB manufacturing processes. In addition, there are other key impact indicators to gauge the success of the Project and improve sustainability of a market transformation from FCBs to NFBs including the:

Number of NFB plants that are compliant to new NFB quality control regulations and standards (Component 1);

Number of building projects that are using new building codes that define and mandate the use of NFBs (Component 1);

Number of building developers and owners that use NFBs as building construction material (Component 2);

Number of visitors to NFB website and facilitation center at VABM (Component 2);

Number of SMEs and NFB entrepreneurs with confirmed financing through Project financing schemes for NFB projects (Component 3); and

Number of replication NFB plants planned at the EOP (Component 4). 57. The successful implementation of the proposed project will also contribute towards the

achievement of national targets set forth in the National Programme for NFBD, resulting in:

Direct cumulative CO2eq emission reductions of 383 ktonnes CO2;

Cumulative direct post-project of 1,270 ktonnes CO2; and,

Indirect emission reductions (top-down) of 13,409 ktonnes CO2eq and 1,531 ktonnes CO2eq (bottom-up) between 2019 and 2028, 10 years after the completion of the Project.

58. GHG emission reductions are based on studies conducted during the PPG phase of the Project, the details of which are contained in Annex II and Annex VI. The shift of brick production away from FCBs towards NFBs will result in GHG emission reductions of more than 50% if one compares the energy intensities of FCBs manufactured from the dominant tunnel and clamp kilns (0.317 to 0.407 kg CO2/SBU) in comparison to CBB manufacturing (0.100 and 0.149 kg CO2/SBU for hollow and solid CBBs respectively). Unit energy consumption and emissions for both FCB and NFB technologies are provided on Tables 3 and 4 respectively. In summary, GHG emission reduction calculations are based on:

Unit baseline energy consumption and emissions for the current FCB technologies (weighted average for clamp, tunnel, VSBK, Hoffman and biomass kilns38) as shown in Table 3;

The implementation of three CBB investment projects resulting in a total production of 65 million SBUs/year commencing by the early part of Year 3 of the Project;

TA during Years 1 and 2 to improve annual production of an existing AAC plant to 100 million SBUs annually;

TA during Years 4 and 5 to assist entrepreneurs in the feasibility and sourcing of financing for 24 NFB plants (20 CBB and 4 AAC plants with a total annual production of 800 million solid SBUs.

38

This is based on 2012 UNDP survey of brick kilns as well as data from the MoC and VABM.


Table 3: Baseline Unit Energy Consumption and GHG Emissions

Energy consumption per SBU in 2009

(MJ/SBU)

CO2 emissions per SBU in 2009

(kg CO2/SBU)

Tunnel 3.16 0.317

Clamp 4.22 0.407

VBSK 2.59 0.254

Hoffman 2.89 0.282

Biomass - -

Weighted average (based on the FCB production data per technology in 2009):

3.554 0.3485

Table 4: Unit Energy Consumption and GHG Emissions of Selected NFB Technologies

Energy consumption per SBU in 2009

(MJ/SBU)

CO2 emissions per SBU in 2009

(kg CO2/SBU)

AAC using sand aggregate 1.152 0.184

AAC using fly ash aggregate 1.284 0.189

Concrete solid block brick 0.675 0.149

Concrete hollow block brick 0.475 0.100

59. Without GEF support to cover the incremental cost associated with the removal of barriers,

those hurdles would remain in place. These include: deployment (how the new NFB technology will be applied in brick manufacturing by overcoming technical, financial, and policy barriers); diffusion (how to promote and create awareness among the brick industry, building designers, architects and contractors on the benefits of NFB production and utilization, and to disseminate technical know-how and skills in the development and application of the NFB technology in production and utilization of NFBs in construction); and transfer (how the NFB technology or equipment and components of the technology will be marketed in Viet Nam by addressing technical, market, financing, institutional and policy barriers).

60. Without this proposed project, the country would have very limited application of this technology and limited success in establishing a suitable environment for widespread adoption of NFB technology in brick manufacturing. Among the initial steps towards realizing such technology, this project will focus on the deployment, diffusion and transfer of NFB technology in the brick manufacturing sector in Viet Nam. With GEF support for the incremental cost needed for removal of the aforementioned barriers, the NFB market will expand towards the Government’s targets for a larger share of the building materials market, which will subsequently contribute to the reduction of investment costs in the long-term. While contributing to the mitigation of climate change globally, as a result of the project, a significant GHG reduction will be realized from the implementation of three investment projects in the brick manufacturing sector and realization of 24 replications at the end of the Project.


Risks 61. Risks identified in the implementation of the Project includes:

Delays in the endorsement and enforcement of new regulations that might lead to a lack of interest by local manufacturers towards a cleaner production technology and delay the implementation of investment projects;

The financial incentives and loans from existing funds might not be available in the early stages of the Project, delaying progress in demonstrating pilot NFB plants as well as the applicability and sustainability of the model financial scheme;

NFB plants do not provide rates of return to satisfy investors; Owners of FCB kilns do not convert to NFB technologies. Risks and countermeasures to identified risks are analyzed in detail in Annex I.

Assumptions 62. The main assumptions for this Project are the:

Continued growth of Viet Nam’s economy that includes the continued growth of its real estate sector. The current growth of real estate sector has slowed down over the past 2 years but is expected to pick up as demands for increased and improved housing in urban areas increases;

Continued willingness amongst Viet Nam’s brick making SMEs and entrepreneurs to transform the industry to NFB technologies. To sustain their willingness to change, the Project will need to augment the GoV’s policies and set up the required support systems that will allow the brick industry to confidently invest and sustain production of NFBs at low costs to maximize return on investment;

Availability of sufficient capital for scale-up of NFB investments to meet the target for 2020. The estimated capital required for this scale of NFB investment until 2020 is in the order of USD 220 million. The Project will facilitate the availability of capital for scaling up investments.

Cost Effectiveness

63. The GHG reductions expected from this Project are 15.062 million tonnes CO2eq cumulative

to 2028, 10 years after Project completion. The cost of emission reductions resulting from this Project are USD 0.19 per tonne of CO2 reduced.

Sustainability, Replicability and Impacts Sustainability

64. The Project will ensure sustainability of project results by:

Strengthening the regulatory framework including a number of standards and codes pertaining to the construction and operation of NFB plants, and for the use of NFB products in buildings. This will provide more confidence to all NFB stakeholders especially to potential NFB investors;


Increasing the number of stakeholders who will have the knowledge to

o Develop and plan NFB investments; o Design, engineer and maintain NFB plants; and o Operate NFB plants and sustain production of quality NFB products This will improve the performance of NFB investments and likely sustain investments in NFB plants after completion of the Project;

Improving access to financing for all potential NFB investors. This would include NFB entrepreneurs who will be seeking concessional loans to reduce their investment risks, and SMEs who own FCB kilns who will need to access loan guarantees to be able to invest in a small NFB plant;

Setting up the necessary support systems that will encourage NFB investment. In particular, the Project will assist VABM to become a focal point as a NFB facilitator where VABM will have the knowledge and linkages to financers, service providers and NFB equipment suppliers.

Through these Project actions, the likelihood of sustainability of NFB market transformation is increased.

65. The Project will develop capacities of the full range of stakeholders involved with NFB promotion, supply and demand. This will have the impact of increasing the number of knowledgeable provincial government officials, local entrepreneurs and NFB plant personnel on the advantages of NFBs. With stakeholder knowledge of the advantages of NFB usage, increased NFB demand should be sustained facilitating a sustained increase in the supply of NFBs.

Replicability

66. To encourage replication of the initial NFB investments, suitable mechanisms will be set up

where interested NFB investors including SMEs can be directed to an investment facilitation center which can be housed within the VABM. The capacity of the VABM and other organizations will be built as deemed appropriate to facilitate, support and assist potential NFB investors and developers in providing NFB technical information, listing of approved suppliers of NFB equipment, listing of approved NFB service providers (for planning, designing, engineering, constructing, operating and maintaining NFB production plants), obtaining access to various financing sources, and providing guidance for the completion of all necessary applications for regulatory permits.

Impacts 67. There are positive social and environmental impacts of the proposed shift to NFB

manufacturing that will enhance the sustainability of NFB market transformation and the replicability of NFB plants throughout Viet Nam. These impacts include:

Improved working conditions for brick workers. Current labor conditions in most FCB facilities are poor, and worsen during the wet monsoon seasons. The firing process presents a safety hazard for workers. Since a large proportion of brick laborers are


women, the shift to NFB production will translate into improved working conditions as NFB manufacturing is done mostly under covered conditions, and is safer without a firing process; and,

Improved air quality and reduced emissions. By shifting to the NFBs, the bonding of the brick materials no longer relies of thermal inputs, thus reducing GHG emissions and local particulate matter from coal combustion. Air quality will markedly improve with the shift to NFB plants.

68. One potential negative impact from the shift to NFB plants through the retirement of FCB

kilns is the disruption of employment of the FCB entrepreneurs and workers. The Project is designed to reduce and even eliminate the potential negative impact of retiring FCB kilns through increasing access to NFB finance for FCB entrepreneurs that will facilitate their shift to NFB technology supported by focused re-training of FCB workers in NFB plants.


PROJECT RESULTS FRAMEWORK

Primary applicable Key Environment and Sustainable Development Key Result Area (same as that on the cover page, circle one): 1. Mainstreaming environment and energy OR 2. Catalyzing environmental finance OR 3. Promote climate change adaptation OR 4. Expanding access to environmental and energy services for the poor.

Applicable GEF Strategic Objective and Program: GEF-5 CCM Strategic Program SP2: Promote market transformation for energy efficiency in industry and the building sector

Applicable GEF Expected Outcomes: Appropriate policy, legal and regulatory frameworks adopted and enforced, sustainable financing and delivery mechanisms established and

operational, and GHG emissions avoided

Applicable GEF Outcome Indicators: Energy efficiency policy and regulation in place, investment mobilized, and energy savings achieved

Outcomes Indicator Baseline Targets

End of Project (EOP)

Source of verification Risks and Assumptions

Project Objective: 39

Reduce the annual growth rate of GHG emissions by displacement of fossil fuel use and the usage of good quality soil for brick making through the increased production, sale and utilization of non-fired bricks (NFBs) in Viet Nam

Cumulative direct and direct post-project CO2 emission reductions resulting from the NFB plant investments and technical assistance by EOP, Mtons CO2.

Cumulative direct energy

saving (TOE) from displacement of coal through the demonstration NFB plants (3 CBB plants and one AAC plant) by EOP

0 0

0.088 40

1.270

41

30,782

Project final report as well as annual surveys of energy consumption & reductions for each NFB project

Project final report as well

as annual surveys of energy consumption & reductions for each NFB project

Economic growth in the country will continue that includes the recovery of the real estate market in Viet Nam

Willingness of current brick

SMEs and entrepreneurs to transform the industry to NFB technologies is ensured.

Outcome 1:42

Approval and enforcement of an improved legal framework to encourage NFB

Number of approved and enforced policies to encourage the increase in the production and usage of NFBs and decrease the use

0

10

Official documentation on policies and draft NFB incentive policies

Continued government support for strengthening current NFB legal framework as well as regulations, standards and codes

39

Objective (Atlas output) monitored quarterly ERBM and annually in APR/PIR 40 This is the direct emission reduction during the course of the 5-year Project. 41

This is the direct post-project emission reduction from NFB plants that received technical assistance from Project Output 4.9 during Years 4 and 5 to be implemented after EOP. 42

All outcomes monitored annually in the APR/PIR.





production and use, and enhanced government capacity and knowledge to regulate NFB development and usage

of FCBs by EOP

Number of officially approved and enforced regulatory framework mandating the replacement of fired clay brick kilns by Year 2

Number of policies and standards developed for the local manufacture of NFB equipment and technology that are approved and enforced by Year 4

Number of developed regulations, building standards and codes governing the use of NFBs in the construction sector that are approved and enforced by Year 3

Number of developed standards on energy efficiency and emissions reduction in NFB production that are approved and enforced by Year 3

Number of trained

0

0

1

0

0

143

344

3

2

10045

Official study that overviews the current brick making operations and required actions to replace FCB kilns with NFB technology

Official document on the approved NFB standards

Official document on the approved NFB regulations, standards and codes for building construction

Official document on the approved EE and emission standards for NFB production

Reports on workshop

43 This will include a market analysis of fired kilns and VSBKs in operation, a timeframe over which these kilns can be retired, the setup of a cell within a government agency to assist FCB entrepreneurs in their transition to NFB technology voltage grid, references to NFB product testing procedures and directives to monitor, report and verify energy intensities of NFB production 44 The descriptions of regulations, standards and codes to be developed are in Para 51, Output 1.3. 45 Assumes 10 officers trained in each of the 10 provinces.





government officers in NFB quality control standards and regulations and new building codes mandating the use of NFBs by EOP

Number of NFB plants that are compliant to new NFB quality control regulations and standards by EOP

Number of building projects that are using new building codes that define and mandate the use of NFBs by EOP

0

0

6

6

proceedings

Official monitoring and evaluation document on completed NFB plants

Official monitoring and evaluation document on new building projects that cover compliance to new

Outcome 2: Increased availability of technically skilled and qualified local service providers for NFB plants, and enhanced stakeholder knowledge on NFB usage.

Number of new NFB plants that were designed and constructed by local engineering firms based on new NFB technical guidelines by EOP

Number of local firms that can manufacture NFB plant equipment based on set standards developed under this project by Year 2

Number of building developers and owners that use of NFBs as building construction material by EOP

Number of visitors to NFB website and facilitation center at VABM by EOP

0

0

0

0

6

1

300

1,000

Partnership agreements

Technical guidelines for developing NFB projects

Training assessments and feedback from participants

Study on NFB equipment standardization

Workshop assessments and feedback from participants

Willingness of existing brick SMEs to embrace new NFB technologies is assured.

Outcome 3: Number of financing 0 6 Studies on financial Sufficient capital





Improved availability and sustained access to financial support for NFB technology applications

institutions providing financial products for NFB investments by Year 3

Number of SMEs and NFB entrepreneurs with confirmed financing through Project financial schemes by EOP

0

10

sources for NFB investments

Workshop assessments and feedback from participants

Documentation on NFB financing action plan

Financing agreements between new NFB entrepreneurs and financing sources that are a part of NFB financing scheme

replenishments are available for NFB scale-up (estimated to be around USD 221 million to Year 2020)

Willingness of SMEs and entrepreneurs to shift towards NFB technology from FCB kilns is ensured.

Outcome 4: Boosted confidence in NFB technology application resulting in an increased market share of NFBs

Number of operational NFB demonstration plants in operation with a 90% capacity factor by Year 3

Number of AAC facilities with production at a 90% capacity factor by Year 3

Cumulative annual production of NFBs from 3 NFB demonstration plants in Vietnam by EOP (SBUs)

MJ/standard brick unit (energy intensity) of CBB manufacture from demonstration NFB plants by EOP

MJ/standard brick unit

0

0

0

3.554

3.554

3

1

65 million

0.455 (hollow bricks)

0.675 (solid bricks)

1.284

Bankable feasibility studies

Financial agreements

Monitoring reports on NFB plant construction

Monitoring reports of NFB demonstration production and energy consumption

Plans for other NFB investments

Support of SMEs and entrepreneurs to ensure excellent demonstration of NFB technology





(energy intensity) of AAC bricks by EOP

Number of NFB plants with feasibility studies completed with assistance of VABM-associated consultants by EOP

Number of NFB plants that are planned by EOP

% of market share of NFBs in the local brick market by EOP

0

0

1346

2447

5048

2549

46

This is market share of NFBs in 2011 from MoC and VABM 47

This assumes an average production rate of 20 million SBUs per CBB plant, and 100 million SBUs per AAC plant. GHG reductions from these potential projects will be counted as direct post-project emissions. 48

This includes entrepreneurs who have expressed interest to VABM to develop an NFB plant but who will not have completed a feasibil ity study during the Project; as such, the GHGs from these developments will be counted as indirect (bottom up replication) 49

This market share should include the 2.08 billion SBU productions from 72 NFB plants (20 with feasibility studies done during Project, and another 30 where entrepreneurs have expressed interest to VABM on implementing) that are planned in Years 4 and 5 of the Project, and implemented after the EOP.


TOTAL BUDGET AND WORK PLAN Award ID: 75827 Project ID(s): 87517

Award Title: Promotion of Non-Fired Brick (NFB) Production and Utilization

Business Unit: VNM10

Project Title: Promotion of Non-Fired Brick (NFB) Production and Utilization

PIMS no. 4546

Implementing Partner Ministry of Science and Technology

GEF Outcome/Atlas

Activity

Responsible Party/

Implementing Agent

Fund ID

Donor Name

Atlas Budgetary Account

Code

ATLAS Budget Description

Amount (USD) Year 1 2014-5





Total (USD)

Notes

Outcome 1:

Approval and enforcement of an improved legal

framework to encourage NFB production and use, and enhanced government capacity and knowledge to regulate NFB development and usage

MoST 62000 GEF

71200 International Consultants 82,000 32,000 22,000 7,000 7,000 150,000

See Note 1

71300 Local Consultants 23,750 27,700 21,500 19,700 17,900 110,550 See

Note 2

72100 Contractual Services 60,000 45,000 25,000 130,000

See Note 3

71600 Travel 20,000 25,000 18,000 10,000 10,000 83,000 See

Note 4

75700 Training Workshops 20,000 20,000 25,000 15,000 15,000 95,000 See

Note 5

Total GEF Outcome 1 205,750 149,700 111,500 51,700 49,900 568,550

Total Outcome 1

205,750 149,700 111,500 51,700 49,900 568,550

Outcome 2:

Increased availability of technically skilled and qualified local service providers for NFB plants, and enhanced stakeholder knowledge on NFB usage

MoST 62000 GEF


See Note 6


Note 7

72100 Contractual Services 40,000 45,000 10,000 10,000 10,000 115,000

See Note 8

71600 Travel 12,000 20,000 20,000 3,000 3,000 58,000 See

Note 4

75700 Training Workshops 20,000 20,000 13,820 15,000 15,000 83,820 See

Note 9


Total Outcome 2 174,900 151,400 112,920 61,800 61,800 562,820


GEF Outcome/Atlas

Activity

Responsible Party/

Implementing Agent

Fund ID

Donor Name


Code







Total (USD)

Notes

Outcome 3:

Improved availability and sustained access to financial support for NFB technology applications

MoST 62000 GEF

71200 International Consultants

30,000 30,000 22,000 14,000 6,000 102,000 See Note 10

71300 Local Consultants 18,800 22,250 20,150 17,400 21,750 100,350 See Note 11

72100 Contractual Services

0 0 0 0 0 0 N/A

71600 Travel 6,000 10,000 12,000 6,000 1,600 35,600 See Note 4

75700 Training Workshops 6,000 6,000 6,000 6,000 6,000 30,000 See Note 9


Total Outcome 3 60,800 68,250 60,150 43,400 35,350 267,950

Outcome 4:

Boosted confidence in NFB technology application resulting in an increased market share of NFBs

MoST 62000 GEF


See Note 12


Note 13

72100 Contractual Services 75,000 65,000 30,000 100,000 150,000 420,000

See Note 14

71600 Travel 5,000 10,000 20,000 16,000 16,000 67,000 See

Note 15

72500 Office Supplies 6,600 2,000 2,500 2,000 2,500 15,600 See

Note 18

75700 Training Workshops 15,000 10,500 13,000 14,280 52,780 See

Note 9

Total GEF Outcome 4 185,470 210,670 211,870 319,820 339,950 1,267,780

Total Outcome 4 185,470 210,670 211,870 319,820 339,950 1,267,780

PROJECT MANAGEMENT (including M&E)

MoST 62000 GEF

71200 International Consultants 0 0 22,000 0 22,000 44,000

See Note 19

71300 Local Consultants and Local Staff 7,480 7,480 7,480 7,480 7,480 37,400

See Note 20

72200 Equipment 5,000 2,000 6,000 13,000 See

Note 16

72400 Communications 500 500 500 250 250 2,000 See

Note 21

72500 Office Supplies 1,000 1,000 500 500 200 3,200 See

Note 18


GEF Outcome/Atlas

Activity

Responsible Party/

Implementing Agent

Fund ID

Donor Name


Code







Total (USD)

Notes

74100 Audit 3,000 3,000 3,000 3,000 3,000 15,000 See

Note 22

74500 UNDP Cost Recovery Charges 4,000 4,000 3,500 3,500 3,300 18,300

See Note 17

Total GEF Project Management 20,980 17,980 42,980 14,730 36,230 132,900

Total Project Management 20,980 17,980 42,980 14,730 36,230 132,900

GEF Total 647,900 598,000 539,420 491,450 523,230 2,800,000

UNDP Total

Grand Total 647,900 598,000 539,420 491,450 523,230 2,800,000

Summary of Funds:

Amount

Year 1

Amount

Year 2

Amount

Year 3

Amount

Year 4

Amount

Year 5 Total

GEF 647,900 598,000 539,420 491,450 523,230 2,800,000

Co-financing: 2,640,000 3,870,000 9,630,000 9,580,000 10,360,000 36,080,000

MOST 600,000 600,000 700,000 700,000 400,000 3,000,000

MOC 200,000 200,000 200,000 200,000 200,000 1,000,000

UNDP 100,000 100,000 150,000 100,000 100,000 550,000

Local Governments 20,000 0 50,000 100,000 50,000 220,000

VEPF 200,000 400,000 600,000 800,000 1,000,000 3,000,000

NAFOSTED 0 50,000 200,000 350,000 400,000 1,000,000

VIGLACERA 400,000 600,000 1,500,000 300,000 200,000 3,000,000

VIETINBANK 500,000 700,000 5,000,000 7,000,000 8,000,000 21,200,000

Private sector entrepreneurs 600,000 1,200,000 1,200,000 0 0 3,000,000

Industrial associations 20,000 20,000 30,000 30,000 10,000 110,000

Total 3,287,900 4,468,000 10,169,420 10,071,450 10,883,230 38,880,000


Notes:

1. This includes professional time for the International Technical Specialist (ITS) (@USD 3,000/week) being in Viet Nam 18 weeks during Yr 1, 6 weeks during Yr 2, and 5 weeks during Yr 3, and the International Building Materials Specialist (IBMS) (@ USD 3,500/week) for 8 weeks in Year 1, 4 weeks in Yr 2 and 2 weeks in Yrs 3, 4 and 5.

2. This includes professional time for the National Project Manager (NPM) @USD 550/week for a total of 57 weeks, the Capacity Building Advisor (CBA) @ USD 900/week for a total of 60 weeks over the entire Project duration, and the Local Building Materials Specialist (LBMS) @USD 900/week for a total of 28 weeks over the entire Project period

3. Includes USD 60,000 for study on strategy for NFB market development (Output 1.2), USD 30,000 for standardization of local NFB equipment manufacturing (Output 1.3), USD 40,000 for design of GoV - NFB awareness raising programme (Output 1.6);

4. Includes per diems and airfares for ITA/IBMS and transport costs to various meetings and workshops for project personnel and out of town participants; 5. Capacity building workshops for Output 1.6; 6. This includes professional time for the International Technical Specialist (ITS) (@USD 3,000/week) being in Viet Nam 23 weeks during Yr 1, 10 weeks

during Yrs 2 and 3, and 2 weeks during Yrs 4 and 5, and the International Building Materials Specialist (IBMS) (@ USD 3,500/week) for 4 weeks in Years 1, 2 and 3.

7. This includes professional time for the NPM @USD 550/week for a total of 42 weeks over the entire Project duration, the CBA @ USD 900/week for a total of 57 weeks over the entire Project duration, and the Local Building Materials Specialist (LBMS) @USD 900/week for a total of 54 weeks over the entire Project period

8. USD 90,000 for local IT firm to setup and maintain VABM website (Output 2.6), USD 25,000 to assess local capacity for NFB equipment manufacturing (Output 2.3 - Year 2);

9. For Outcome 2, 5 workshops annually in Year 1 to 3, and 3 workshops annually for Years 4 and 5. For Outcomes 3, and 4, number of workshops will be determined during the course of the Project;

10. This includes professional time for the International Technical Specialist (ITS) (@USD 3,000/week) for 2 weeks during Yrs 1 to 5, and the International Finance Specialist (IFS) (@ USD 4,000/week) for 6 weeks in Years 1 and 2, 4 weeks in Year 3, and 2 weeks in Year 4.

11. This includes professional time for the NPM @USD 550/week for a total of 63 weeks over the entire Project duration, the CBA @ USD 900/week for 12 weeks over the entire Project duration, and the Local Finance Expert (LFE) @USD 900/week for a total of 61 weeks over the entire Project period;

12. This includes professional time for the International Technical Specialist (ITS) (@USD 3,000/week) for 5 weeks during Yr 1, 8 weeks in Yr 2, 9 weeks in Yr 3, 22 weeks in Yr 4 and 12 weeks in Yr 5.

13. This includes professional time for the NPM @USD 550/week for a total of 78 weeks over the entire Project duration, the CBA @ USD 900/week for 84 weeks over the entire Project duration, the LFE @USD 900/week for a total of 44 weeks over the entire Project period, the LBMS @ USD 900/week for a total of 119 weeks over the entire Project period, a Production Engineer (PE) @ 900/week full time on the Project from Month 25 to the EOP but half time during Yrs 1 and 2, a Project Administrative Assistant (AA) @ 330/week, 44 weeks per year of his/her time on Component 4, and a Project Accountant (ACC) @ 350/week 44 weeks per year of his/her time on Component 4;

14. USD 75,000 for 3 NFB bankable feasibility studies with assistance of an international expert (Output 4.1 yr. 1), USD 90,000 for the engineering and construction support for 3 demo CCB plants with an international expert (Outputs 4.3, 4.4, 4.5 - Years 2 and 3), USD 25,000 for an AAC energy audit and study to improve production and energy consumption performance (Output 4.8 - Year 2), USD 250,000 to support NFB studies for another 15 to 20 replication NFB plants (Output 4.10 - Years 4 and 5) as well as demonstrations of NFB uses in the construction of buildings;

15. Includes per diems and air travel for ITS, and travel to demo sites for Project personnel; 16. Office equipment and computers for PMU;


17. Estimated cost recovery for UNDP implementation support services (ISS) as indicated in the Letter of Agreement in Annex 3. ISS will be applied on a quarterly basis and ISS fee will be charged on a transactional basis at the request of the implementing partner. The transaction price applicable will be the effective UNDP Viet Nam price list at the time that the transaction occurs.

18. This includes office stationeries; 19. This includes professional time for International Consultants working on Mid-Term Evaluation (year 3) and Terminal Evaluation (year 5) @

USD3,000/week 20. This includes professional time for National Project Manager, Administrative Staff, and Project Accountant 21. This is to cover office internet charges and telephone calls; 22. This is to cover yearly audit expenses


MANAGEMENT ARRANGEMENTS

Project Organization Structure

69. The project is co-financed with funding from the GEF and UNDP acts as the GEF

Implementing Agency. In the context of the UNDP, the project will be executed by MoST, which will assume the overall responsibility for the achievement of project results as the UNDP’s Implementing Partner. This IP will be subject to the micro assessment and subsequent quality assurance activities as per Harmonized Approach to Cash Transfers to Implementing Partners (HACT) framework. UNDP will provide overall management and guidance from its Country Office in Hanoi and the Asia Pacific Regional Centre (APRC) in Bangkok, and will be responsible for monitoring and evaluation of the project as per normal GEF and UNDP requirements. MoST will designate a senior official as the National Project Director (NPD) for the project. The NPD will be responsible for overall guidance to project management, including adherence to the Annual Work Plan (AWP) and achievement of planned results as outlined in the ProDoc, and for the use of UNDP funds through effective management and well established project review and oversight mechanisms. The NPD also will ensure coordination with various ministries and agencies provide guidance to the project team to coordinate with UNDP, review reports and look after administrative arrangements as required by the Government of Viet Nam and UNDP. The project will be executed according to UNDP’s National Implementation Modality (NIM), as per the NIM project management implementation guidelines agreed by UNDP and the Government of Viet Nam.

Figure 3: Project Organization Structure

Project Management Unit (PMU)

1. Project Manager

2. Project Assistant/Interpreter

3. Project Accountant

Project Steering Committee (PSC)

Senior Beneficiaries

MoC, MoIT, MoF, MoNRE,

VABM

Executive

Vice Minister (MoST)

Senior Supplier

Designated Representative of UNDP Viet Nam

Project Assurance

- UNDP Programme Officer

- International Technical Specialist

National Project Director (NPD)

Project Organisation Structure

Implementing Agencies and Institutions

National and International Consultants


70. The Project Steering Committee (PSC) will have oversight of the Project Management Unit

(PMU). The PSC will consist of a Chairperson (MoST Vice Minister); with PSC members from MoC, MoIT, MoF, MoNRE, MPI, UNDP Viet Nam, VABM, and an equipment supplier. The primary functions of the PSC will be to provide the necessary direction that allows the Project to function and achieve its policy and technical objectives, and to approve the annual Project plans and M&E reports.

71. The PMU will report to the Director General of Department for Science and Technology for

Technical-Economic Branches under MoST. The PMU will be responsible to MoST, the PSC and UNDP for implementing the Project, planning activities and budgets, recruiting specialists, conducting training workshops and other activities to ensure the Project is executed as per approved work plans.

72. As a senior supplier, UNDP also has a role of project assurance. This role will be exercised

by the UNDP Programme Officer responsible for the project, based in the UNDP Country Office (CO), and an International Technical Specialist, funded by the project.

73. Both the PMU and the NPD will implement mechanisms to ensure ongoing stakeholder

participation and effectiveness with the commencement of the Project by conducting regular stakeholder meetings, issuing a regular project electronic newsletter, conducting feedback surveys, implementing strong project management practices, and having close involvement with UNDP Viet Nam as the GEF implementing agency. A list of Project stakeholders and their projected roles on the Project are provided on Table 5.

Table 5: List of Stakeholders and Proposed Roles on NFB Project

Stakeholder Role on the NFB Project

Government Stakeholders

Ministry of Science and Technology (MoST)

MoST will be the Project implementing partner accountable to the Government of Vietnam and UNDP for: (i) the successful implementation of the Project; (ii) mobilization of all resources including needed co-financing for the project implementation; (iii) the proper coordination among all related ministries, agencies, provinces and stakeholders involved in the project implementation; (iv) managing the day-to-day operations of the Project implementation as per approved work plans.

MoST will be responsible for developing and implementing the R&D Investment Plan on NFB production technologies and equipment; provide guidance on NFB technological transfer and in cooperation with the Ministry of Construction to issue NFB technical standards; accrediting the NFB quality evaluation agencies.

Ministry of Construction (MoC)

MoC will be responsible for developing policies, technical standards and regulations on NFB production and usage promotion. They will ensure strong coordination during Project implementation with all stakeholders, notably new NFB manufacturers and NFB users, to maximize their synergies to meet the objectives of the National NFB Development Program.

Ministry of Finance (MoF) MoF will be responsible for the development and issuance of regulations on tax incentive and financial incentives for NFB development promotion. MoF will instruct, guide, supervise and


Stakeholder Role on the NFB Project implement these regulations.

Ministry of Natural Resource and Environment (MoNRE)

MoNRE will be responsible for regulating land use for sourcing clay for FCB production into the National Land Use Planning, instructing provinces and cities in developing their provincial land use planning to include land use planning for brick production; developing and issuing policies and mechanisms, to discourage the use of agricultural land for fired clay brick production; and monitoring GHG reductions from the growth of NFB production in Viet Nam.

Ministry of Industry and Trade (MoIT)

MoIT will be responsible for the entry of locally manufactured NFB equipment and the NFB manufacturing production lines into the List of Key Mechanical Products and the List of Key Mechanical Product Investment Projects period from 2009 to 2015; this is to be done for the industry to access financial incentives and preferences provided by GoV in accordance with Decision No. 10/QD-TTg on 6/1/2009 of the Prime Minister.

Local Government Agencies:

Department of Construction (DoC)

Department of Science and Technology (DoST)

Department of Industry and Trade (DoIT)

Technology Transfer Centers (TTCs)

Energy Conservation Centers (ECCs); and

Standard, Metrology and Quality (STAMEQs) under DoST

Local government agencies will be responsible for creation of local incentive policies and land use planning that support the replacement of FCBs with NFBs. The local government agencies (such as DoC, DoST, and DoIT) will participate in the project at the provincial level for effective project implementation. The human resources of these local agencies are identified as important target groups participating in capacity building on M&E and NFB quality control/inspection.

Industrial Associations

Vietnam Association for Building Materials (VABM)

Viet Nam Building Ceramic Association (VIBCA),

Center for Science and Technology under Building Ceramic Association (CERATEC)

Viet Nam Federation of Civil Engineering Association (VFCEA)

Viet Nam Architect Association (VAA)

These associations will participate on the Project and provide in-kind contributions as co-financing through their networks and staff. These institutions will play an active role in the dissemination of NFB information and raising the awareness of different stakeholders on NFB benefits by using their current networks and participating in technology transfer (see more specific descriptions below).

Brick industry associations (i.e. Hai Duong VSBK associations)

National and provincial brick associations will be involved in NFB awareness raising and information dissemination activities on the Project.

Private Sector Entities Viet Nam Building Glass and Ceramic Corporation (VIGLACERA);

VIGLACERA is a prominent business group in the field of building material production in Viet Nam and as well as infrastructure development, industrial parks, residential and business properties. VIGLACERA will be hosting an AAC demonstration NFB technology application.


Stakeholder Role on the NFB Project Viet Nam Machinery Erection Corporation (LILAMA) Construction and Mechanical Corporation (COMA)

LILAMA is a leading contractor for mechanical and equipment manufacture in Vietnam. LILAMA will be involved in supplying the equipment as components and parts of the NFB production line. They will be potential partners with international NFB equipment suppliers.

NFB equipment suppliers:

DmC in Hai Duong Province;

Thanh Phuc manufacturing company in Haiphong Province;

Trung Hau company in Ho Chi Minh City; and

Other suppliers

Theses suppliers are manufacturing and supplying equipment and consulting for NFB project investment, technology transfer to NFB investors. They are identified as main target groups participating in training to become NFB service providers of engineering and consultancy services.

Financial Entities

Viet Nam Trade and Industrial Bank (VietinBank)

VietinBank is one of the largest commercial banks in Viet Nam, and has a nationwide operating network spreading to district levels. VietinBank will participate in the project as the NFB financing institution that will provide commercial loans for NFB technology application investments.

Viet Nam Environment Protection Fund (VEPF) managed by MoNRE

VEPF is a state financial institution responsible for financial support through soft loans, loan guarantees, funding grants for programs and projects on natural conservation and bio-diversity operations, prevention and control pollution of national inter-disciplinary and inter-region pollutions, depression and settlement of local environmental problems. In the past, several EE&EC investment projects have been supported by the VEPF. On the NFB Project, VEPF will be involved in the provision of soft loans for NFB production projects.

National Foundation for Science and Technology Development (NAFOSTED) under MoST

NAFOSTED is a state financial institution responsible for supporting research activities in Viet Nam. One of its missions is to promote research efforts in enterprises, with focus on core technologies development that contribute to national economic growth and competitiveness, promotion of research efforts in enterprises. Presently, NAFOSTED is managing a USD 1.7 million loan guarantee. NAFOSTED will be involved on the NFB project as a provider of loan guarantees for SME brick producers who are unable to access loans from financial institutions for NFB investments.

Civil Society Organizations

Vietnam Architects’ Association (VAA)

The Project will provide VAA with workshops on promoting NFB products. VAA is a voluntary social professional organization of architects designed to enhance their knowledge and professional skill, provide legal protection for its members, implement a function of consultation and social appraisal according to request of the Government on strategy, policy, planning, management on construction and civil engineering for large important project of country, enhance the R&D on modern and traditional architecture of Viet Nam, and training architects and develop talents on architecture.

Vietnam Association for Building Materials (VABM)

The Project will assist in the building of VABM capacity to promote and become the NFB champion that provides expert advice for the


Stakeholder Role on the NFB Project building and construction industry on NFB usage. VABM is voluntary

social professional organization that enhances the knowledge of building materials to its membership consisting of technical staff and scientists working in the field of building materials science, disseminates innovative building technology information; apply new technology to production in building material sector, assists VABM members to access to science and technology institutes and organizations, provides strategy and policy advice on issues pertaining to the building material industry; provides legal protection to its membership; and develops international cooperation on science and technology with international organizations and institutes to obtain best practices in the building material industry.

Viet Nam Farmer’s Association (VFA)

The VFA is a political social organization led by Viet Nam Communist Party and is a Member of the Front of Motherland of Vietnam. The Project will work with VFA to help the shift from FCB kilns towards NFB technologies for the benefit of its farmer membership. VFA mobilizes and educates its membership and farmers on farming and environmental issues, and provides to them the benefits of legal advice to protect and improve their agriculturally-based livelihoods.

Viet Nam Federation of Civil Engineering Associations (VFCEA)

The Project will provide VFCEA with workshops on promoting NFB products. VFCEA is voluntary social professional organization of the Civil Engineering Association, and Provincial Engineering Associations. VFCEA membership consists of individuals and leading experts on civil engineering sector who enhancing the knowledge and professional bases of the civil engineering profession in Viet Nam, undertake R&D projects and advanced technology transfer on new civil engineering technologies, organize training and professional skill for its membership, provides legal protection of its membership, and organizes international exchanges with overseas agencies and institutes on civil engineering.

Vietnam Building Ceramic Association (VIBCA)

The Project will provide VIBCA with workshops on promoting NFB products. VIBCA is voluntary social professional organization established according to the decision of No. 41/1999/QD dated 4/10/1999 of Government, and is comprised of a membership of 100 entrepreneurs working on building ceramic industry, linked with R&D institutes, consultancies, and consulting engineers.

Vietnam Women’s Union (VWU)

The Project will work closely with VWU to improve their working conditions within the brick manufacturing industry through its promotion of NFBs. The migration of brick manufacturing to NFBs will improve working conditions for women in the brick industry. VWU mobilizes women to implement the policy of the Party and the law of the State; propagandize gender equality; supports women to enhance their capacity, knowledge, and their mental well-being, and to develop gender equality and fairness in the work place.

Youth Union of Vietnam (VYU)

The Project will work closely with VYU to improve their working conditions within the brick manufacturing industry through its promotion of NFBs, and to provide more opportunities for youth to find employment in this sector. VYU mobilizes and encourages members to actively participate to industrialization and modernization of country, provides them legal advice on employment issues, and strengthens its activities with international organizations to promote youth development.

Academic Organizations


Stakeholder Role on the NFB Project

The Institute for Building Science and Technology (IBST)

The Hanoi University of Technology (HUT)

The Universities of Construction in Hanoi and HCMC

These universities and academic institutes will be involved in the provision of technical training.

The Institute for Building Materials

They will provide consultancy services to demo projects, replication projects and supporting training courses and NFB technology transfers.

General UNDP support service 74. MoST will enter into an agreement with UNDP for support services in the form of

procurement of goods and services during the project implementation process. In such a case, appropriate cost recovery will be charged as per UNDP rules and regulations. The support services will be outlined in the form of Letter of Agreement signed between MoST and UNDP.

Collaborative Arrangements with Related Projects 75. The project development team at MoST will consult and involve the implementers of the

relevant ongoing energy efficiency projects/programmes as well as technology transfer programmes in the country in the design and development of the Project to explore synergies and avoid overlaps. They include: (i) National Targeted Programme on EC&EE; (ii) WB-GEF-MoIT Commercial Energy Efficiency Project (CEEP); (iii) UNDP-GEF regional project, Barrier Removal to the Cost-Effective Development and Implementation of Energy Efficiency Standards and Labeling (BRESL); (iv) National Programme on Technology Transfer (TT) including R&D/TT on energy conservation and renewable energy managed by MoST; (v) the proposed Energy Conservation and Renewable Energy Fund supported by JICA and hosted by the Viet Nam Development Bank; and (vi) the Viet Nam Clean Production and Energy Efficiency Project supported by GEF and WB and hosted by MoIT.

76. The Project will establish links with the relevant agencies and ongoing projects/programmes such as (a) the Master Plan on Construction Material Development up to 2020, and (b) the Programme on Non-Fired Brick Development up to 2020 coordinated by MoC to identify the relevant activities that will build on their respective achievements. The project is fully aware of Viet Nam Clean Production and Energy Efficiency Project, JICA’s initiative of energy conservation and renewable fund for Viet Nam, in cooperation with the Viet Nam Development Bank, is at the first phase of operation. There is still an opportunity for fund leverage and the project will consult with the respective project teams to explore any possible co-financing support. Building construction associations will also be mobilized to participate in the project to promote the widespread application of NFBs in their respective sectors. The Project will also encourage NFB proponents to link their investments with the CDM-PoA entitled “Green Brick Development Programme of Activities Managed by INTRACO”.


77. The Project will establish links with the UNDP/GEF Project on EE in commercial buildings initiatives with MoC. This project aims to strengthen the compliance of the energy efficiency building code and implementation of market transformation strategies in commercial and high-rise residential buildings in key urban provinces of Viet Nam. Its initial focus will be on improvement of comprehensive policy, legal and regulatory frameworks and implementation; enabling market environment for EE buildings; and increasing the use of EE building materials and EE technologies. Beside this UNDP project, there is an IFC project that is supporting the revision and implementation of the building code.

78. With regards to other initiatives in the region, the Project will promote learning and knowledge sharing and forge partnerships between Vietnamese entities and other country partners to replicate best practices and facilitate technology transfer. The companies that will be involved in Project investments will be liaising with technical experts from other countries (particularly those supplying the NFB technology). The Project will also form part of UNDP’s Community of Practice on energy efficient brick making, linking this initiative to bricks projects in China, India and Viet Nam.

79. This proposed Project will establish the necessary communication and coordination

mechanisms through its PMU and PSC with the Project Management Board to ensure proper coordination between the various projects there under. UNDP Viet Nam will also take the lead in ensuring adequate coordination and exchange of experiences. In addition, the project will seek to coordinate its actions with other UNDP energy and climate change activities in Viet Nam. Similarities in the strategy of the proposed project may extend an opportunity to share lessons and exploit synergies, in particular in the areas of harmonization and mutual recognition. Also, the proposed project will also seek to coordinate actions with other existing government commitments and non-government initiatives.

Prior Obligations and Prerequisites 80. There are no prior obligations and prerequisites.

Audit Arrangements 81. The Government will provide the UNDP Resident Representative with certified periodic

financial statements, and with an annual audit of the financial statements relating to the status of UNDP (including GEF) funds according to the established procedures set out in the programming and finance manuals. The audit will be conducted according to UNDP financial regulations, rules and audit policies by the legally recognized auditor of the Government, or by a commercial auditor engaged by the Government.

Agreement on Intellectual Property Rights and Use of Logo on Project Deliverables 82. To accord proper acknowledgement to GEF for providing funding, a GEF logo should

appear on all relevant GEF-supported project publications, including among others, project hardware, if any, purchased with GEF funds. Any citation on publications regarding projects funded by GEF should also accord proper acknowledgement to GEF. Alongside GEF and UNDP logo, a MoST logo may also feature as the Implementing Partner of the proposed project.


MONITORING FRAMEWORK AND EVALUATION

83. The project team and the UNDP Office in Hanoi supported by the UNDP-GEF Regional Coordination Unit in Bangkok will be responsible for project monitoring and evaluation conducted in accordance with established UNDP and GEF procedures. The Project Results Framework provides performance and impact indicators for project implementation along with their corresponding means of verification. The GEF CC Tracking Tool will also be used to monitor progress in reducing GHG emissions. The M&E plan includes: inception workshop and report, project implementation reviews, quarterly and annual review reports, independent mid-term evaluation, and independent final evaluation. The following sections outline the principle components of the Monitoring and Evaluation Plan and indicative cost estimates related to M&E activities. The M& E budget is provided on Table 6.

84. Project start: A Project Inception Workshop will be held within the first 4 months of the

project starting with those with assigned roles in the project organization structure, UNDP country office and where appropriate/feasible regional technical policy and programme advisors as well as other stakeholders will be invited. The Inception Workshop is crucial to building ownership for the project results and to plan the first year annual work plan. The Inception Workshop would address a number of key issues including: a) Assisting all partners to fully understand and take ownership of the project; b) Detailing the roles, support services and complementary responsibilities of UNDP CO

and RCU staff vis-à-vis the project team; c) Discussing the roles, functions, and responsibilities within the Project's decision-making

structure including reporting and communication lines, and conflict resolution mechanisms. The Terms of Reference of project staff will be discussed again as required;

d) Finalization of the first annual work plan based on the project results framework and the relevant GEF Tracking Tool if appropriate. A review and agreement on the indicators, targets and their means of verification will be required as well as a re-check of assumptions and risks;

e) Providing a detailed overview and reach consensus on reporting, monitoring and evaluation (M&E) requirements, the M&E work plan and budget;

f) Discussion of financial reporting procedures and obligations, and arrangements for annual audit;

g) Planning and scheduling Project Board meetings; and, h) Clarification of roles and responsibilities of all project organization structures as well as

planned dates of meetings where the first PSC meeting should be held within the first 12 months following the inception workshop.

85. An Inception Workshop report is a key reference document and must be prepared and shared with participants to formalize various agreements and plans decided during the meeting.

86. Quarterly Progress Report: Contents of the QPR include:

Progress made as reported in the Standard Progress Report (SPR) and monitored in the UNDP Enhanced Results Based Management Platform;


Table 6: M&E Work Plan and Budget

Type of M&E activity Responsible Parties

Budget US$

Excluding project team staff

time Time Frame

Inception Workshop and

Report

Project Manager

UNDP CO, UNDP GEF Indicative cost: 15,000

Within first four months

of project start up

Measurement of Means of

Verification of project

results.

UNDP GEF RTA/Project Manager will

oversee the hiring of specific studies and

institutions, and delegate responsibilities

to relevant team members.

To be finalized in Inception

Phase and Workshop.

Start, mid and end of

project (during

evaluation cycle) and

annually when required.

Measurement of Means of

Verification for Project

Progress on output and

implementation

Oversight by CTA with support from the

Project Manager

Project team

To be determined as part of the

Annual Work Plan's

preparation.

Annually prior to

ARR/PIR and to the

definition of annual

work plans

ARR/PIR Project manager and team

UNDP CO

UNDP RTA

UNDP EEG

None Annually by July

Project Board meetings Project Manager 7,000 x 5 years Following IW and

annually thereafter.

Periodic status/ progress

reports

Project manager and team None Quarterly

Mid-term Evaluation Project manager and team

UNDP CO

UNDP RCU

External Consultants (i.e. evaluation

team)

Indicative cost: 22,000 At the mid-point of

project implementation.

Final Evaluation Project manager and team,

UNDP CO

UNDP RCU

External Consultants (i.e. evaluation

team)

Indicative cost : 22,000 At least three months

before the end of project

implementation

Project Terminal Report Project manager and team

UNDP CO 0

At least three months

before the end of the

project

Audit UNDP CO

Project manager and team

Indicative cost per year: 3,000

x 5 years

Yearly

Visits to field sites) UNDP CO

UNDP RCU (as appropriate)

Government representatives

For GEF supported projects,

paid from IA fees and

operational budget

Yearly

TOTAL indicative COST

Excluding project team staff time and UNDP staff and travel expenses

109,000

(+/- 5% of total budget)

Based on the initial risk analysis submitted, the risk log shall be regularly updated in ATLAS (if applicable otherwise outside ATLAS). Risks become critical when the impact and probability are high;

Project Progress Reports (PPR) as generated in the Executive Snapshot and based on the information recorded in Atlas; and,

Other ATLAS logs that are used to monitor issues and lessons learned. The use of these functions is a key indicator in the UNDP Executive Balanced Scorecard.

87. Annual Project Review /Project Implementation Reports (APR/PIR): APRs/PIRs are key reports prepared to monitor progress since project start and in particular for the previous reporting period (30 June to 1 July). The APR/PIR combines both UNDP and GEF reporting requirements, and includes, but is not limited to, reporting on the following:


Progress made toward project objective and project outcomes, each with indicators, baseline data and end-of-project targets (cumulative);

Project outputs delivered per project outcome (annual);

Lesson learned/good practice;

AWP and other expenditure reports;

Risk and adaptive management;

ATLAS QPR; and,

Portfolio level indicators (i.e. GEF focal area tracking tools) that are used by most focal areas on an annual basis.

88. Periodic Monitoring through site visits: UNDP CO and the UNDP RCU staff will conduct visits to project sites based on the agreed schedule in the project's Inception Report/Annual Work Plan to assess first hand project progress. Other members of the Project Board may also join these visits. A Field Visit Report/BTOR will be prepared by the CO and UNDP RCU and will be circulated no less than one month after the visit to the project team and Project Board members.

89. Mid-term of project cycle: The project will undergo an independent Mid-Term Evaluation at

the mid-point of project implementation. The Mid-Term Evaluation will determine progress being made toward the achievement of outcomes and will identify course correction if needed. It will focus on the effectiveness, efficiency and timeliness of project implementation; will highlight issues requiring decisions and actions; and will present initial lessons learned about project design, implementation and management. Findings of this review will be incorporated as recommendations for enhanced implementation during the final half of the project’s term. The organization, terms of reference and timing of the mid-term evaluation will be decided after consultation between the parties to the project document. The Terms of Reference for this Mid-term evaluation will be prepared by the UNDP CO based on guidance from the Regional Coordinating Unit and UNDP-GEF. The management response and the evaluation will be uploaded to UNDP corporate systems, in particular the UNDP Evaluation Office Evaluation Resource Center (ERC). The relevant GEF Focal Area Tracking Tools will also be completed during the mid-term evaluation cycle.

90. End of Project: An independent Final/Terminal Evaluation will take place three months prior

to the final Project Board meeting and will be undertaken in accordance with UNDP and GEF guidance. The final evaluation will focus on the delivery of the project’s results as initially planned (and as corrected after the mid-term evaluation, if any such correction took place). The final evaluation will look at impact and sustainability of results, including the contribution to capacity development and the achievement of global environmental benefits/goals. The Terms of Reference for this evaluation will be prepared by the UNDP CO based on guidance from the Regional Coordinating Unit and UNDP-GEF.

91. The Final Evaluation should also provide recommendations for follow-up activities and

requires a management response which should be uploaded to PIMS and to the UNDP Evaluation Office Evaluation Resource Center (ERC). The relevant GEF Focal Area Tracking Tools will also be completed during the final evaluation. During the last three months, the project team will prepare the Project Terminal Report. This comprehensive report will summarize the results achieved (objectives, outcomes, outputs), lessons learned, problems met and areas where results may not have been achieved. It will also lay out recommendations for any further steps that may need to be taken to ensure sustainability and replicability of the project’s results.

http://erc.undp.org/index.aspx?module=Intra




92. Learning and knowledge sharing: Results from the project will be disseminated within and

beyond the Project intervention zone through a number of existing information sharing networks and forums. In addition:

The Project will participate, as relevant and appropriate, in UNDP/GEF sponsored networks, organized for senior personnel working on projects that share common characteristics;

The Project will identify and participate, as relevant and appropriate, in scientific, policy-based and/or any other networks, which may be of benefit to project implementation though lessons learned; and,

The Project will identify, analyze, and share lessons learned that might be beneficial in the design and implementation of similar future projects. Identifying and analyzing lessons learned is an on-going process and the need to communicate such lessons as one of the project's central contributions is a requirement to be delivered not less frequently than once every 12 months. UNDP/GEF shall provide a format and assist the project team in categorizing, documenting and reporting the lessons learned. To this end a percentage of project resources will also need to be allocated for these activities;

This GEF-funded Project will endeavor to compile and share its development results within a monitoring framework that is designed to meet the goals of the UN One Plan outcomes.

LEGAL CONTEXT

93. This Project Document shall be the instrument referred to as such in Article I of the Standard Basic Assistance Agreement between the Government of Viet Nam and the United Nations Development Program, signed by the parties on 21 March 1978. The host country-implementing agency shall, for the purpose of the Standard Basic Assistance Agreement, refer to the government co-operating agency described in that Agreement.

94. Consistent with the Article III of the SBAA, the responsibility for the safety and security of the

implementing partner and its personnel and property, and of UNDP’s property in the implementing partner’s custody, rests with the implementing partner. The implementing partner shall:

Put in place an appropriate security plan and maintain the security plan, taking into account the security situation in the country where the project is being carried;

Assume all risks and liabilities related to the implementing partner’s security, and the full implementation of the security plan.

95. UNDP reserves the right to verify whether such a plan is in place, and to suggest

modifications to the plan when necessary. Failure to maintain and implement an appropriate security plan as required hereunder shall be deemed a breach of this agreement.

96. The implementing partner agrees to undertake all reasonable efforts to ensure that none of

the UNDP funds received pursuant to the Project Document are used to provide support to individuals or entities associated with terrorism and that the recipients of any amounts provided by UNDP hereunder do not appear on the list maintained by the Security Council Committee established pursuant to resolution 1267 (1999). The list can be accessed via:


http://www.un.org/Docs/sc/committees/1267/1267ListEng.htm. This provision must be included in all sub-contracts or sub-agreements entered into under this Project Document.

http://www.un.org/Docs/sc/committees/1267/1267ListEng.htm


ANNEXURES


Annex I: Risk Analysis OFFLINE RISK LOG

Project Title: Promotion of Non-Fired Brick (NFB) Production and Utilization

Project ID: Date:

# Description Date Identified

Type Impact &

Probability

Countermeasures / Management Response

Owner Submitted, updated

by

Last Update Status

(compared with

previous evaluation)

1 Delays in the endorsement and enforcement of new regulations that might lead to a lack of interest by local manufacturers towards a cleaner production technology and delay the implementation of investment projects. This could include delays in guidelines and standards on NFB manufacturing and utilization; endorsement and approval of enabling policies on NFB technology application; deterrent policies for using good quality agricultural soil for brick making; and formulation, adoption and enforcement of emission standards in brick manufacturing.

Regulatory

P = 3

I = 4

The proposed Project counter-measures include (1) Engaging and working with the appropriate government authority from the commencement of the Project to ensure their support and commitment to Project on formulating standards and expediting regulations; (2) Ensuring high-level representation from concerned authorities (in this case MoST, MoC, MOF).

Project manager

Submitted by Project Proponent, updated by

Project Manager

2 The financial incentives and loans from existing funds might not be available in the early

Financial

P = 4

I = 5

Proposed risk reduction measures include: (1) close coordination and consultation with relevant stakeholders in

Project manager



# Description Date Identified

Type Impact &

Probability

Countermeasures / Management Response

Owner Submitted, updated

by

Last Update Status

(compared with

previous evaluation)

stages of the Project, delaying progress in demonstrating pilot NFB plants as well as the applicability and sustainability of the model financial scheme.

each of the proposed activities and involving them at a very early stage (PPG phase); (2) inclusion of the financial capacity in the criteria for selecting pilot sites to ensure that the hosting companies/investors are financially capable; (3) deploying financial expertise early in the Project to obtain financing as early as possible.

Project Manager

3 NFB plants do not provide rates of return to satisfy investors

Technical and financial

P = 4

I = 5

The Project will provide technical assistance to obtain approval for the financing of, and to design and operate the NFB plants. Most importantly, the Project will provide this assistance towards ensuring the production rates of NFB plants are optimized, maximizing the rate of return for investors, thus demonstrating the viability of NFB plants as good investments

Project Manager

4 Owners of FCB kilns do not convert to NFB technologies.

Technical and financial

P = 4

I = 5

The Project will target certain clusters of FCB kilns and provide them with demonstrations of NFB investments and technical and financial assistance to implement a NFB project.

Project manager


Project Manager

Submitted by Project Manager ________________ Approved by UNDP Programme Analyst ______________


Annex II: Detailed CO2 Calculations and Assumptions A. Purpose of Report

This annex provides a comprehensive analysis of the energy saved and GHG emissions reduced through a shift from the traditional means of fired clay brick (FCB) making in Viet Nam to non-fired brick (NFB) technologies. Issues covered include:

Baseline energy consumption of current technologies that are producing fired bricks in Viet Nam including but not limited to tunnel kilns, VSBK, clamps and Hoffman kilns. The energy consumed from the excavation and transport of clay to the FCB kilns was not included to simplify the calculation;

Life cycle energy consumptive information on the selected NFB technologies (from both demonstration projects and replication projects) in terms of MJ/kg or MJ/m³ of brick produced. Only the energy consumed from the transport of raw materials was excluded to simplify the calculation;

Direct, post-project direct and indirect CO2 reductions resulting from life-cycle energy savings from the use of NFB technologies using GEF guidelines50 and inputs from the PPG team on the timing of the investments and generation of CO2 reductions.

A summary of the emission reductions from this Annex is provided on Table II-1.

Table II-1: Summary of GHG Reductions from NFB Project Activities

Emissions reduction

(ktonnes CO2) Comments

Lifetime direct emission reductions

383 See Table II-30

Direct post-project emissions reductions

1,270 See Table II-30

Indirect bottom-up emission reductions

1,531 Assumed replication factor of 4.0 times direct emission reductions

Indirect top-down emission reductions

13,409 Assumes causality factor of 40% on 10-year potential on Table II-33

B. Baseline Energy Consumption of Brick Making Sector

B.1 Energy Consumption of Current Brick Making Technologies in Viet Nam Scope of the analysis The system boundary, as shown in Figure II-1, describes which processes are included and excluded in the baseline energy consumption assessment for the brick manufacturing sector. In the calculation of baseline energy consumption, energy consumption of the manufacturing of brick products (e.g. brick forming and firing process) is included using the latest available data from 2009. While an estimated 15% of energy is consumed in the extraction of clay and the transport of clay from the

50 http://www.thegef.org/gef/sites/thegef.org/files/documents/C.33.Inf_.18%20Climate%20Manual.pdf

http://www.thegef.org/gef/sites/thegef.org/files/documents/C.33.Inf_.18%20Climate%20Manual.pdf


extraction site to the FCB kiln, it is not included in this calculation to simplify and provide more conservativeness to the analysis.

Figure II-1: FCB System Boundary

B.2 Assumptions applied for determination of energy consumption of FCB manufacturing.

Brick types

Prior to establishing energy consumption and emission baseline for brick manufacturing, it is important to note that on Viet Nam a distinction is made between solid and hollow FCBs. The weight of a standard51 hollow brick is 1.8 kg compared to 2.2 kg for a solid brick. The latter is lighter and consumes less energy during firing stage in kiln but has a lower compressive strength than a solid brick.

Density of clay and final brick product

The density of clay for solid FCB manufacturing is 1,586 kg/m³ (2.2 kg * 721 bricks per m³), whereas this is 1,298 kg/m³ for hollow FCBs (1.8 kg * 721 bricks per m³), or a weighted average density of 1,476 kg of clay per m³/bricks (dry basis). Moisture content of excavated clay is 12%; hence the transportation density is 1,653 kg clay (wet basis) to produce 1 m³ final brick product.

Fuel used in clay fired brick manufacturing

Fuel used to produce FCBs is predominantly coal. Average net calorific value is assumed to be 5,000 kcal/kg (20.93 MJ/kg)52. Information about carbon content of coal is not openly available; hence in this report the default value of IPCC of 96.1 tCO2/TJ 53 is applied54.

Electricity Consumption at the site The prevailing practice to mold clay lumps into adobe bricks is by using extrusion equipment. Mechanization of this process is also prevailing in the small-scale brick production. Electricity from the grid is consumed to operate the equipment. Electricity is converted into MJ by conversion factor 3.6 per kWh.

51

Length 220 mm, Width 105 mm, Thickness 60 mm 52

The coal used for brick firing is typically Vietnamese coal type 5 HG and 6b HG with a net calorific value between 4,400 and 5,500 kcal/kg of TCVN 1790:1999. 53

2006 IPCC Guidelines for National Greenhouse Gas Inventories, volume 2, chapter 2, table 2.2, page 2.16, CO2 emission factor for Anthracite 54

Fuel consumption data is from the report of Vietnam Association of Building Material on fired and non-fired brick energy consumption.

Project Boundary Scenario 1

Extraction of clay Transportation to brick manufacturing

site

Manufacturing of brick

(Brick forming, firing)

Raw materials

Final Bricks


B.3 Determination of energy consumption of brick kilns in Viet Nam Based on the system boundary described in this report, energy consumption for clay fired brick production will be determined based on the following methodology: Clamp kilns The dominant technology for FCB production In Viet Nam is the clamp kilns. In 2009, 45.9% of the FCBs were produced using clamp kilns. Clamp brick kilns are typically small-scale and the most primitive type of brick kilns in Viet Nam since no permanent kiln structure is built. It consists of essentially a pile of molded clay lumps inter spread with combustibles material. The capacity of the clamp is typically small-scale. Clamp kilns primarily use coal as fuel. Small quantities of diesel at the start of the firing process of the kiln may be used. However, as a conservative approach these are not considered. The specific material and energy consumption of clamp kilns (per m³ standardized bricks) is shown on Table II-2.55 The energy consumption per process step for standardized bricks is shown on Table II-3.

Table II-2: Consumption data of FCB manufacturing using clamp kilns

Process step Consumption per

m³/bricks Unit

Fuel consumption at kiln 0.144 Ton of coal per m³ final bricks

Electricity at kiln 6.25 kWh electricity per m³ of final bricks

Table II-3: Energy consumption of FCB manufacturing using clamp kilns

Process step MJ/m³ of bricks MJ/SBU

Fuel consumption at kiln 3,020.15 4.19

Electricity at kiln 22.50 0.03

Total energy consumption 3,042.65 4.22

VSBK The Vertical Shaft Brick Kiln (VSBK) is a fixed structure with one or more shafts that only produces 4% of FCBs in Viet Nam. Batches of adobe bricks are loaded from the top of the kiln and coal dust is distributed between layers of adobe bricks. Bricks will then pass through the firing zone vertically and reside in the kiln for approximately 26 to 30 hours. The bricks are unloaded at the bottom of the kiln. The kiln is mechanized in to allow batch processing and contain measures to improve the energy efficiency of the kiln (e.g. the gap between the shaft and kiln wall is insulated). Electricity from the grid is consumed to operate extrusion equipment used for molding of clay lumps into adobe bricks. VSBK kilns use coal as fuel for excavation of clay and transportation to the kiln may also require small quantities of diesel. The specific material and energy consumption of VSBK kilns (per m³ standardized bricks) is shown on Table II-456. The energy consumption per process step is shown on Table II-5 per m³ of standardized bricks.

55

Please refer to Table II-33 of this report for the conversion factors and default values applied. 56

Ibid 56


Table II-4: Consumption data of FCB manufacturing using VSBK kilns

Process step Consumption per m³/bricks

Unit


Electricity at kiln 17 kWh electricity per m³ of final bricks

Table II-5: Energy consumption of FCB manufacturing using VSBK kilns





Tunnel Kilns Tunnel kilns (referred to as Tuynel in Viet Nam) currently produce 46% of FCBs in Viet Nam. In tunnel kilns, the bricks move through a "tunnel" on a cart. Tunnel kilns are medium and large-scale production facilities that have a high degree of mechanization and are fairly efficient. Electricity from the grid is consumed to operate extrusion equipment used for molding of clay lumps into adobe bricks. Tunnel kilns use coal as fuel. Excavation of clay and transportation to the kiln may also require small quantities of diesel. Electricity consumption in tunnel kilns is higher due to the higher degree of mechanization, compared to other kiln types used. In particular, the electricity to move the cart with adobe bricks through the firing tunnel consumes electricity. Extraction and transportation emissions of raw materials are higher for tunnel kilns, since these facilities are typically located further away from clay deposits than small-scale kilns such as VSBK and Clamp kilns. The specific energy consumption of Tunnel kilns (per m³ standardized bricks) is shown on Table II-657. The energy consumption per process step is shown on Table II-7 per m³ of standardized bricks.

Table II-6: Consumption data of FCB manufacturing using Tunnel kilns

Process step Consumption per m³/bricks

Unit

Quantity of clay used 1,653 Kg of clay per m³/final bricks (dry basis)

Extraction of clay 1.72 Kg diesel consumption per m³ final bricks

57

Ibid 56


Table II-7: Energy consumption of FCB manufacturing using Tunnel kilns





Hoffman Kilns The Hoffman kiln is designed as a fixed structure containing a series of batch process kilns, and produces only 2% of FCBs in Viet Nam. The kiln consists of a main fire passage surrounded on each side by several small rooms. Each room contains a pallet of adobe bricks. In the main fire passage there is a fire wagon that holds a continuous burning fired. Each room is fired for a specific time. Thereafter, the fire wagon is rolled to the next room to be fired. Electricity from the grid is consumed to operate extrusion equipment used for molding of clay lumps into adobe bricks. Hoffman kilns use coal as fuel. Excavation of clay and transportation to the kiln may also require small quantities of diesel. The specific energy consumption of Hoffman kilns (per m³ standardized bricks) is shown on Table II-8. The energy consumption per process step is shown on Table II-9 per m³ of standardized bricks.

Table II-8: Consumption data of FCB manufacturing using Hoffman kilns

Process step Consumption per

m³/bricks Unit


Electricity at kiln 15.9 kWh electricity per m³ of final bricks

Table II-9: Energy consumption of FCB manufacturing using Hoffman kilns





Biomass fired kilns Kilns fired with biomass produce approximately 2.1% of the bricks in Viet Nam. Biomass based brick kilns can be found mainly in the Mekong Delta River. In this region rice crops up to 3 times per year, creating an abundance of rice husk. The rice husk is fired in clamp kilns, or beehive kilns (that are similar to clamp kilns but allow better distribution of rice husk (due to its lower calorific value).


B.4 Current GHG Emissions from Brick Making Sector in Viet Nam GHG emissions from FCB production GHG emissions from brick manufacturing in Viet Nam are calculated as using the average annual historical baseline fossil fuel consumption value and brick production rate in brick manufacture between 2005 and 2009, which is the latest available data. The weighted average energy use of these technologies is considered for determining the baseline emissions.

The annual production specific emission factor (EFBL, production) is calculated as follows:

)**(,

,,,, 2ij

jCOjjiBLproductionBL EFNCVFCEF

Where:

Parameter Description Unit Value Source

Average annual baseline fossil fuel consumption value for fuel type j combusted in the process i, using volume or weight units

Ton Refer to annex 1 of this report for average fossil fuel consumption data

Source of data for number of standardized bricks produced and source of data for coal consumption for burnt brick production: Study Report Current Fuel Consumption for Burnt Materials and development plan for unburnt brick production, issued by the Vietnam Association for Building Materials, October 2010.

NCV,j Average net calorific value of fuel type j combusted, TJ per unit volume or mass unit

TJ/ton 0.02093 Confirmation letter from the Vietnam Association for Building Materials, of the coal used in burnt brick manufacturing.

EF,CO2,j CO2 emission factor of fuel type j combusted in the in the process i in t CO2/ TJ

tCO2/TJ 96.1 2006 IPCC Guidelines for National Greenhouse Gas Inventories, volume 2, chapter 2, table 2.2, page 2.16, CO2 emission factor for Anthracite coal.

Based on Table II-10, it can be shown that the emissions for fossil fuel usage (primarily Vietnamese coal) in brick kilns in Viet Nam amount to 8,035,731 tCO2e in the year 2009.

Table II-10: Emissions from Coal Consumption for Brick Making in 2009

Kiln Type Annual Brick production in

2009 per kiln type (m³) CO2 emissions from firing in

brick kiln in 2009 (tCO2e)

Emissions per standard brick unit

(kgCO2e/SBU)

Tunnel 15,556,464 3,159,646 0.282

Clamp 15,537,060 4,509,421 0.403

VBSK 1,352,736 235,169 0.241

Hoffman 676,368 131,495 0.270

Biomass 695,772 0 -

TOTAL 33,818,400 8,035,731 0.2513

jiBLFC ,,


GHG emissions from electricity consumption The emission factor is 0.5408 tCO2/MWh58. Table II-11 shows that in 2009, the emissions from electricity consumption in brick kilns was 459,449 tCO2e.

Table II-11: Emissions from Electricity Consumption for Brick Making in 2009

Kiln Type Annual Brick

production in 2009 per kiln type (m³)

Electricity consumption per m³/bricks (kWh)

CO2 emissions from electricity consumption in

2009 (tCO2e)

Emissions per m³/bricks (kgCO2e)

Tunnel 15,556,464 46.62 392,211 25.21

Clamp 15,537,060 6.25 52,515 3.38

VBSK 1,352,736 17.00 12,437 9.19

Hoffman 676,368 6.25 2,286 3.38

Biomass 695,772 0 0 0

TOTAL 33,818,400 -- 459,449 --

Cumulative GHG emissions from brick manufacturing in Vietnam In the assessment above, the emissions are provided for extraction and transportation of clay and coal and electricity and coal consumption at the kiln. The weighted average emissions are 0.494 kgCO2e/SBU based on the production and emission data of bricks in 2009. Table II-12 provides a summary of the emissions per brick manufacturing technology. Table II-13 provides these emissions as per process step. Based on this information, the total emissions generated from burnt brick manufacturing in Viet Nam, in the year 2009, are estimated to be 8,498,709 tCO2e while 33,818,400 m³ of bricks have been provided in the same year. Hence, the CO2e emission factor is 0.3485 tCO2e per m³/bricks.

Table II-12: Cumulative Energy Consumption and GHG Emissions from Brick Making in 2009

Market share of brick manufacturing

technologies in 2009

Total CO2e emissions from brick manufacturing in 2009 (including excavation, transportation and firing) per kiln type

Kiln Type Market

share (%) Annual Brick

production (m³) Emissions (tCO2e)

Emissions per standard brick unit

(kgCO2e/SBU)

Tunnel 46.0% 15,556,464 3,551,857 0.317

Clamp 45.9% 15,537,060 4,561,936 0.407

VBSK 4.0% 1,352,736 247,605 0.254

Hoffman 2.0% 676,368 137,311 0.282

Biomass 2.1% 695,772 0 -

TOTAL 100.0% 33,818,400 8,498,709 0.3485

58

DNA Viet Nam web-link for the GEF report: http://www.noccop.org.vn/Data/vbpq/Airvariable_ldoc_59vnBao%20cao%20EF%202010.pdf

http://www.noccop.org.vn/Data/vbpq/Airvariable_ldoc_59vnBao%20cao%20EF%202010.pdf


Table II-13: Brick Making GHG Emissions as per Process Steps

Process step Total cumulative emissions CO2

emissions per process step in 2009 (tCO2e)

Fuel consumption at kiln 8,035,731

Electricity at kiln 462,979

TOTAL 8,498,709

C. Energy consumption of NFB technologies C.1 Energy Consumption of AAC Process Autoclaved Aerated Concrete Blocks (AACs) are made with a mixture typically consisting of cement, lime, silica sand, or fly ash, water, gypsum, aluminum powder or paste and poured into a mold as summarized in Table II-14. The reaction between aluminum and concrete causes microscopic hydrogen bubbles to form. After evaporation of the hydrogen, the now highly closed-cell, aerated concrete is cut to size and formed by steam-curing in a pressurized chamber (an autoclave). During the curing process, the autoclave uses high-pressure steam at temperatures of about 190°C to accelerate the hydration of the concrete and create a second chemical reaction that gives ACC its strength, rigidity, and dimensional stability. The steam is generated by a boiler using fossil fuels.

Table II-14: Energy demand and raw materials59 for AAC production per m³ of final product

Parameter Unit Consumption using

sand aggregate Consumption using fly

ash aggregate

Sand kg/m³ 340 (68%) N/A

Water kg/m³ 25 (5%) 25 (5%)

Lime60

kg/m³ 45 (9%) 95 (19%)

Fly ash kg/m³ N/A 350 (70%)

Cement61

kg/m³ 90 (18%) 40 (8%)

Aluminum kg/m³ 0.4 (0.08%) 0.45 (0.09%)

Anhydride (gypsum) kg/m³ N/A 15 (3%)

Steam (Saturated, 12 bar pressure)

kg/m³ 150 150

Electricity kWh/m³ 11 11

Coal kg/m³ 14 14

The product is applied for brick-laid, monolithic, load-bearing and non-load-bearing walls. AAC belongs to the porous steam-cured light-weight concrete group. The sand is from sand pits whereas fly ash is obtained from coal fired power plants and cement is sourced from plants within immediate proximity to the AAC plant. Any other raw materials (apart from the slight amounts of aluminum powder or paste) come from a surrounding area of at most 200 kilometers from the plant. As

59

Gross density of final product AAC product of 500 kg/m3

60 Fine ground high calcium (Quick Lime)

61 Portland blended cement, e.g. PCB30 or PCB40 in accordance with TCVN 6260:1997


observed above, the energy intensity of fly ash based AAC manufacturing is higher. The main reason for this is:

Transportation distance of fly ash (from nearby power plants) is longer.

Fly ash based AAC requires more lime, which has a higher embodied energy62 to produce than cement.

Table II-15 provides the energy balance for AAC production using sand or fly ash as main aggregate based on the AAC mixtures of Table II-14. The energy consumption per production technology in standard brick unit equivalent is shown on Table II-16.

Table II-15: Energy consumption of AAC manufacturing

Process step MJ/m³ of AAC using sand as

aggregate MJ/m³ of AAC using fly ash as aggregate

Cement used for CBBs (CO2 from energy used in the production of the cement used)

290.70 129.20

Production of lime 207.00 437.00

Production of gypsum 0.00 27.00

Coal consumption at plant63 293.02 293.02

Electricity at plant 39.60 39.60

Total energy consumption 830.32 925.82

Table II-16: AAC Specific Energy Consumption

Product type MJ/SBU kgCO2e/SBU

AAC using sand aggregate 1.152 0.184

AAC using fly ash aggregate 1.284 0.189

C.2 Energy Consumption of Concrete Blocks Concrete block bricks (CBBs) are made with a mixture of cement as binding agent, aggregate and water. The mixture is shaped and cured (atmospheric drying) after which the bricks are ready for use. In Viet Nam shaping is typically done by one of the following methods:

(i) Pouring the mixture in molds. After being introduced in the mold further shaping can take place by using an electric cutting equipment (such as a wire cutter) to shape the mixture in the desired size.

(ii) Pouring the mixture in molds and usage of hydraulic pressure to shape the mixture in the desired size.

62 4.6 MJ/kg quicklime compared to 3.23 MJ/kg for Portland blended cement. 63 This will be replaced by biomass during the course of the Project. Coal is kept in this calculation to provide conservativeness to the GHG calculation.


When the mixture has been shaped, it is air cured. Production of concrete block bricks typically requires electricity at the plant with minimal usage of front-end loaders during moving of raw materials at the production site. Indicative balance of raw materials used for production of concrete block bricks is provided in Table II-17.

Table II-17: CBB Energy demand and raw materials (Per m³ using sand or stone dust as aggregate64)

Parameter Unit Consumption using sand

as aggregate Consumption using stone dust as aggregate

Solid bricks Hollow bricks Solid bricks Hollow bricks

Sand kg/m³ 2,055 (93%) 1121 (92%) N/A N/A

Stone dust kg/m³ N/A N/A 2,055 (93%) 1121 (93%)

Cement kg/m³ 145 (7%) 97 (8%) 145 (7%) 97 (8%)

Water kg/m³ 25 (5%) 15 (2%) 25 (5%) 15 (2%)

Electricity kW/m³ < 5 kW < 4 kW < 5 kW < 4 kW

CBBs in Viet Nam are typically produced using stone dust as aggregate. The product is often a waste material and abundant in locations where raw materials are mined for other industries, such as cement and calcium carbonate plants. During mining and chipping of rocks to sellable chips for these industries, large quantities of stone dust are produced that is dumped or not utilized in absence of CBB production activities. Water used is groundwater from deep wells that is extracted using electric water pumps. The bricks can also be produced with sand with materials sourced from within the immediate proximity to the CBB plant (from a surrounding area of at most 20 kilometers from the plant). It is possible to produce CBBs in various shapes and sizes, but for construction purposes, the majority of CBBs produced follow the dimensions of standard65 FCBs; hence, no mortar savings are applicable. For simplification, it is assumed in the calculation below that the density of sand and stone dust are the same, thus energy required for raw material transportation is the same. CBB energy consumption is on Table II-18. The data per production technology in standard brick unit equivalent is shown on Table II-19.

Table II-18: Energy consumption of concrete block brick manufacturing

Process step MJ/m³ of solid bricks MJ/m³ of hollow bricks

Cement used for CBBs (energy used in the production of the cement)

468.35 313.31

Electricity at plant 18.00 14.40

Total energy consumption 486.35 327.71

64

Gross density of final product solid concrete brick product of 2,200 kg/m3

and 1,218 kg/m

3 for the hollow concrete block

bricks 65

Length 220 mm, Width 105 mm, Thickness 60 mm


Table II-19: CBB Energy consumption

Product type MJ/SBU kgCO2e/SBU kgCO2e/m3

Concrete solid block brick 0.67 0.149 107.39

Concrete hollow block brick 0.45 0.100 72.20

D. GHG Reductions resulting from shift to NFB technology D.1 GHG Reductions from Concrete Block Demonstrations A shift from traditional FCB production to CBB manufacturing will lead to a reduction in energy consumption and GHG emissions. This section provides analysis of the three demonstration projects which will be used to demonstrate the energy savings of NFB technology on the Project. Demonstration project 1 - Đức Tài Service and Trade Ltd. This NFB demonstration project involves the production of 35 million standard bricks per year (48,510 m³/bricks per year) with the potential to produce standard solid CBBs (220x105x60mm). Table II-21 provides raw material balance for solid CBBs. The technology applied is NFB molding by vibrating and hydraulic pressing technology.

As shown on Table II-22, the production of 1 m³ of concrete block bricks (CBBs) in the demonstration project of Đức Tài Service and Trade Ltd. will translate to a GHG emission of 0.1074 tCO2e/m³ solid bricks. The emissions to produce an equivalent amount of fired bricks are 0.2513 tCO2e per m³. For the purposes of estimating GHG reductions from this demonstration project, the emission reduction achieved by producing 100% solid concrete block bricks is 6,981 tCO2e per annum as shown on Table II-23.

Table II-21: Raw material consumption of Demonstration project 1 - Đức Tài Service and Trade Ltd

Process step Consumption for solid

brick production (SBUs) per m³/bricks

Unit

Cement used for CBBs 145.00 kg of cement per m³ of final bricks

Electricity at plant 35,000,000 kWh electricity per m³ of final bricks

Production per year (SB) 48,510 Standard bricks/year

Production per year (m³) 145.00 m³ bricks/year

Table II-22: Emissions from manufacturing at demonstration project of Đức Tài Service and Trade Ltd.

Process step Emissions of solid brick production

(SBUs) per m³/bricks

Unit


104.69 kgCO2e/m³

Electricity at plant 107.39 kgCO2e/m³

Total CO2e/m³ 104.69 kgCO2e/m³


Demonstration project 2 - Minh Tuan Co. Ltd. This NFB demonstration project involves the production of 20 million standard CBBs per year (34,650 m³/bricks per year) with the potential to produce standard bricks solid bricks (220x105x60mm) and hollow blocks (390x119x100/150/190mm). Table II-23 provides raw material balances for solid CBBs. The technology applied is brick molding by vibrating and hydraulic pressing technology. Based on this raw material balance provided, respective energy consumption and emissions for solid CBBs can be calculated as shown on Table II-24. Similar to the Demonstration Project 2, production of 1 m³ of concrete block bricks (solid bricks) in the NFB demonstration project of Minh Tuan Co. Ltd. will generate GHG emissions estimated to be 0.1074 tCO2e/m³ bricks. The emissions to produce an equivalent amount of fired bricks are 0.2513 tCO2e per m³. For the purposes of estimating GHG reductions from this demonstration project, the emission reduction achieved by producing 100% solid concrete block bricks is 3,989 tCO2e per annum as shown on Table II-25.

Table II-23: Raw material consumption of Demonstration project 2 - Minh Tuan Co. Ltd.

Process step

Consumption for solid brick

production (SBU) per m³/bricks

Unit


145.00 kg of cement per m³ of final bricks

Electricity at plant 20,000,000 kWh electricity per m³ of final bricks

Production per year (SB) 27,720 Standard bricks/year

Production per year (m³) 145.00 m³ bricks/year

Table II-24: Emissions from manufacturing at demonstration project of Minh Tuan Co. Ltd.

Process step

Emissions of solid brick production

(220x105x60mm) per m³/bricks

Unit


104.69 kgCO2e/m³


Total kgCO2e/m³ 104.69 kgCO2e/m³

Table II-23: Emissions of concrete block brick manufacturing at demonstration project of Đức Tài Service and Trade Ltd.

Process step Annual

production (m³/bricks)

tCO2e/m³ of bricks tCO2e per

annum

Emissions of solid CBB manufacturing 48,810 0.10739 5,210

Emissions of equivalent amount of bricks using FCB kilns

48,510 0.2513 12,194

Emission Reduction -- -- 6,984


Demonstration project 3 - FiCo HiTech JSC. The demonstration project involves the production of 10 million standard hollow block bricks per year (13,860 m³/bricks per year). The existing production facility has the potential for producing hollow blocks (400x150x190mm). The technology applied is bricks molding by vibrating and hydraulic pressing technology. Based on the raw material balance provided on Table II-26, respective energy consumption and emissions can be calculated as shown on Table II-27. As shown on Table II-27, the production of 1 m³ of concrete block bricks in the demonstration project of Minh FiCo HiTech JSC will result in GHG emissions of about 0.0722 tCO2e/m³ hollow bricks. A higher consumption of cement in this demonstration project causes the emissions to increase substantially, in comparison with the other two demonstration projects. Based on this information, the emission reduction achieved by producing concrete block bricks for this demonstration project is 2,482 tCO2e per annum as shown on Table II-28.

Table II-26: Raw material consumption of Demonstration project 3 - FiCo HiTech JSC.

Process step

Consumption for Hollow CBB production

(Per m³/bricks)

Unit

Cement used for CBBs (CO2 from energy used in the production of the cement used))

97 kg of cement per m³ of hollow bricks (assumed as 40% hollow content)

Electricity at plant 4 kWh electricity per m³ of final bricks

Production per year (SB) 10,000,000 Standard bricks/year

Production per year (m³) 13,860 m³ bricks/year

Table II-25: Emissions of concrete block brick manufacturing at demonstration project of Minh Tuan Co. Ltd.

Process step

Annual production

(m³/bricks) tCO2e/m³ of bricks tCO2e per annum

Emissions of concrete solid brick manufacturing

27,739 0.1074 2,975

Emissions of equivalent amount of bricks using fired Brick kilns

27,739 0.2513 6,966

Emission Reduction -- -- 3,991


Table II-27: Emissions from manufacturing at demonstration project of FiCo HiTech JSC.

Process step

Emissions of hollow block production (400x150x190mm)

per m³/bricks

Unit


70.03 kgCO2e/m³


Total kgCO2e/m³ 70.03 kgCO2e/m³

Table II-28: Emissions of concrete block brick manufacturing at demonstration project of FiCo HiTech JSC.

Process step

Annual production (m³/bricks)

tCO2e/m³ of bricks tCO2e per annum

Emissions of concrete block brick manufacturing

13,860 0.0722 1,001

Emissions of equivalent amount of bricks using fired Brick kilns

13,860 0.2513 3,483

Emission Reduction -- 0.1791 2,482


Table II-29: Summary of Assumed Emission Factors for Production of FCBs and NFBs

Table II-30: Direct annual energy saved from 3 CBB plants and one AAC plant (Component 4)

Baseline: Fired Brick Kilns

Detail Unit

Weighted average emissions of FCBs kgCO2e/SBU 0.3485 from Table II-12

MJ/SBU 3.554

Market Share

Tunnel MJ/SBU 3.164 46.00% Based on 2009 brick production data from Inst. of Building Materials

Clamp MJ/SBU 4.220 45.90% Based on 2009 brick production data from Inst. of Building Materials

VBSK MJ/SBU 2.594 4.00% Based on 2009 brick production data from Inst. of Building Materials

Hoffman MJ/SBU 2.885 2.00% Based on 2009 brick production data from Inst. of Building MaterialsBiomass MJ/SBU 0.0000 2.10% Based on 2009 brick production data from Inst. of Building Materials

Hollow Concrete block brick kgCO2e/SBU 0.100 from Table II-19

MJ/SBU 0.455 from Table II-19

Solid Concrete block brick kgCO2e/SBU 0.149 from Table II-19


AAC with sand aggregate kgCO2e/SBU 0.184 from Table II-16


AAC with flyash aggregate kgCO2e/SBU 0.189 from Table II-16MJ/SBU 1.284 from Table II-16

Assumptions for NFB Emissions

Direct emission reductions tonnes CO2e 382,731 lifetime emission reductions from demos

Direct post-project emission reductions: tonnes CO2e 1,269,800 emission reductions from replications receiving TA during Project

Annual brick production from plants receiving TA million SBUs 965

Indirect emission reductions (top-down): tonnes CO2e 13,409,662

Indirect emission reductions (bottom-up): tonnes CO2e 1,530,924

Total emission reductions: tonnes CO2e 16,593,117

Direct annual energy saved from 3 CBB plants and one AAC plant:

solid CBBs 55 million SBUs/yr

hollow CBBs 10 million SBUs/yr

energy saved per solid SBU 2.879 MJ/SBU

energy saved per hollow SBU 3.099 MJ/SBU

energy saved for 3 CBB plants 189,362,199 MJ

52,600.61 MWh

AACs 100 million SBUs annually

energy saved per SBU 2.402 MJ/SBU

energy saved for 1 AAC plant 240,234,066 MJ

66,731.69 MWh

Total direct energy saved during Project 1,288,788,795 MJTotal direct energy saved during Project 30,782 TOE


Table II-31: 10-Year GHG Potential for Brick Making Sector in Viet Nam (for Indirect Top-Down Emissions)

Description Value Unit

Weighted average emissions of FCBs (2009) 0.349 kgCO2e/SBU

Concrete (solid) block brick emission factor 0.149 kgCO2e/SBU

Total estimated national brick production in 2011 24,000,000,000 SBUs (see Table 1)

% target of NFBs by 2028 70% Estimated from 40% in 2020

annual GHG potential 3,352,416 tCO2/year

10-year GHG potential 33,524,155 tCO2

Causality Factor 40%

Indirect Top-Down Emission Reductions 13,409,662 tCO2

Table II-32: Details of Direct and Direct Post-Project Emissions from the Project

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Total

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Direct GHG Emissions from Demo Plants and TA

Demo solid CBB Plant #1 (Đức Tài Service and Commercial Limited Company) 0

Annual Production million SBUs 35 35 35 35 35 35 35 35 35 35 35 35 35 455

GHG Reduction tonnes CO2e 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 6,984 90,795

Demo solid CBB Plant #2 (Minh Tuấn Limited Company) 0



Demo hollow CBB Plant #3 (Fico HiTech, HCMC) 0



AAC Plant TA (with flyash aggregate) 0

Annual Production million SBUs 100 100 100 100 100 100 100 100 100 100 100 100 100 1,300


Total direct + post-project direct (demo) GHG reductions tonnes CO 2e 0 0 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 29,441 382,731

Direct post-project emissions from 24 plants (which received TA in Years 4 and 5 from Output 4.10)

CBB Plants (assume each plant produces 20 million solid SBUs annually)

Production million SBUs 0 0 100 200 300 400 400 400 400 400 400 400 3,400

GHG Reduction tonnes CO2e 0 0 19,955 39,910 59,865 79,819 79,819 79,819 79,819 79,819 79,819 79,819 678,465

AAC Plants (with sand aggregate - mainly rural areas) 0

Production million SBUs 0

GHG Reduction tonnes CO2e 0 0 0 0 0 0 0 0 0 0 0 0 0

AAC Plants (assumes each AAC plant produces 100 million SBUs annually with flyash aggregate) 0

Production million SBUs 0 0 200 300 400 400 400 400 400 400 400 400 3,700

GHG Reduction tonnes CO2e 0 0 31,964 47,946 63,928 63,928 63,928 63,928 63,928 63,928 63,928 63,928 591,335

Total post-project direct GHG reductions (receiving TA ) tonnes CO2e 0 0 0 0 0 51,919 87,856 123,793 143,748 143,748 143,748 143,748 143,748 143,748 143,748 1,269,800

Total GHG reductions tonnes CO2e 0 0 29,441 29,441 29,441 81,360 117,297 153,234 173,188 173,188 173,188 173,188 173,188 173,188 173,188 1,652,532

Start of GEF Project End of GEF Project

Unit Value


Table II-33: Data used to determine GHG emissions from brick manufacturing

Parameter Value Unit Source

Energy required to manufacture quicklime

used in the cement for CBBs4.6 MJ/kg quicklime Oates, J. A. H. Lime and Limestone: Chemistry and Technology, Poduction and

Uses. Weinheim: Wiley-VCH (1998).

Diesel fuel density 0.86 Density of diesel Vietnamese standard TCVN 6594:2000 (diesel specifications)

Default CO2 emission factor for diesel 43 TJ/Gg2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2,

Chapter 1 (introduction), table 1.2, default CO2 emission factor for Diesel

Default CO2 emission factor for diesel 74.1 kg/TJ2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 2,

Chapter 1 (introduction), table 1.4, default CO2 emission factor for Diesel

Default CO2 emission factor for frieght

transport activity245 gCO2 e/t km

Tool “Project and leakage emissions from road transportation of freight” (Version

01.0.0) for a emission factor of the light vehicles.

CO2 emissions in the production of

ordinary portland cement0.722 tCO2/ton cement http://wbcsdcement.org/pdf/csi-gnr-report-with%20label.pdf

Grid emission factor for Viet Nam 0.5408 tCO2/MWhStanding Office of Viet Nam National Steering Committee for United Nations

Framework Convention on Climate Change and Kyoto Protocol (DNA of Viet Nam)

under the MoNRE dated 05/03/2012.

Energy required in the manufacture of

Ordinary Portland Cement used in CBBs3.23 MJ/kg http://www.arpnjournals.com/jeas/research_papers/rp_2012/jeas_0312_653.pdf

CO2 emissions in the production of

ordinary portland cement0.75 tCO2/ton lime

2006 IPCC Guidelines for National Greenhouse Gas Inventories (Volume 3,

Chapter 2, Equation 2.8); IPCC Good Practice Guidance and Uncertainty

Management in National Greenhouse Gas Inventories (Page 3.22)

Coal emission factor for anthracite 96.1 tCO2/TJ2006 IPCC Guidelines for National Greenhouse Gas Inventories, volume 2, chapter

2, table 2.2, page 2.16

Coal consumption for FCBs in Viet Nam 20.93 TJ/ton Confirmation letter from the VABM of the coal used in burnt brick manufacturing.

Volume of a standard brick unit (SBU) 0.001386 m3 220 mm x 105 mm x 60 mm

Number of SBUs per cubic meter of brick 721 bricks/m3 Dimension of standard brick: 220 x 105 x 60 mm

Average density of hollow and solid bricks 1653 kg/m3 Average density of hollow (25%) and solid bricks


Annex III: Annual Targets

Strategy Objectively Verifiable Indicator Annual Targets66

Indicator Description Baseline Target Year 1 Year 2 Year 3 Year 4 Year 5 Objective: Reduce the annual

growth rate of GHG emissions

by displacement of fossil fuel

use and reduction of the usage

of good quality soil for brick

making through the increased

production, sale and utilization

of non-fired bricks (NFBs) in

Viet Nam

Cumulative direct CO2 emission reductions resulting

from the NFB plant investments and technical assistance,

Mtons CO2. 0 0.088 0 0 0.029 0.058 0.088

Cumulative direct energy saving (TOE) from

displacement of coal through the demonstration NFB

plants (3 CBB plants and one AAC plant) 0 30,782 0 0 10,261 20,521 30,782

Outcome 1: Improved and

approved legal framework to

encourage NFB production and

use, and enhanced government

capacity and knowledge to

regulate NFB development and

usage

Number of approved and enforced policies to encourage

the increase in the production and usage of NFBs and

decrease the use of FCBs 0 10 2 4 6 8 10

Number of officially approved and enforced regulatory

framework mandating the replacement of fired clay brick

kilns 0 1 0 1 1 1 1

Number of policies and standards developed for the local

manufacture of NFB equipment and technology that are

approved and enforced 0 3 0 1 2 3 3

Number of developed regulations, building standards and

codes governing the use of NFBs in the construction

sector that are approved and enforced 1 3 1 2 3 3 3

Number of developed standards on energy efficiency and

emissions reduction in NFB production that are approved

and enforced 0 2 0 0 2 2 2

Number of trained government officers in NFB quality

control standards and regulations and new building codes

mandating the use of NFBs 0 100 20 40 60 80 100

Number of NFB plants that are compliant to new NFB

quality control regulations and standards 0 6 0 0 1 3 6

Number of building projects that are using new building

codes that define and mandate the use of NFBs 0 6 0 0 1 3 6

Outcome 2: Increased

availability of technically

skilled and qualified local

Number of new NFB plants that were designed and

constructed by local engineering firms based on new

NFB technical guidelines 0 6 0 1 3 6 6

66 Year 1 is from start (current year) of project to 30 June of following year. Years 2, 3, 4 & 5 are each synchronized to a PIR reporting period (1 July of previous/current year to

30 June of current/next year)


Strategy Objectively Verifiable Indicator Annual Targets66

Indicator Description Baseline Target Year 1 Year 2 Year 3 Year 4 Year 5 service providers for NFB

plants, improved skills of plant

owners to produce NFBs that

meet quality standards and

enhanced stakeholder

knowledge on NFB usage

Number of local firms that can manufacture NFB plant

equipment based on set standards developed under this

project 0 1 0 1 1 1 1

Number of building developers and owners that use of

NFBs as building construction material 0 300 0 50 100 150 300

Number of visitors to NFB website and facilitation

center at VABM 0 1,000 200 400 600 800 1,000

Outcome 3: Improved

availability and sustained

access to financial support for

NFB technology applications

Number of financing institutions providing financial

products for NFB investments 0 6 0 3 6 6 6

Number of SMEs and NFB entrepreneurs with

confirmed financing through Project financial schemes 0 10 0 3 5 7 10

Outcome 4: Boosted

confidence in NFB technology

application resulting in an

increased market share of

NFBs

Number of operational NFB demonstration plants in

operation with a 90% capacity factor 0 3 0 0 3 3 3

Number of AAC facilities with production at a 90%

capacity factor 0 1 0 0 1 1 1

Cumulative annual production of NFBs from 3 NFB

demonstration plants in Vietnam (SBUs) 0 65million 0 0 65 million 65 million 65 million

MJ/standard brick unit (energy intensity) of CBB

manufacture from demonstration NFB plants 3.554

0.455

(hollow)

0.675

(solid)

3.689 3.689

0.455

(hollow)

0.675

(solid)

0.455

(hollow)

0.675

(solid)

0.455

(hollow)

0.675

(solid)

MJ/standard brick unit (energy intensity) of AAC bricks 3.554 1.269 3.689 3.689 1.269 1.269 1.269 Number of NFB plants with feasibility studies completed

with assistance of VABM-associated consultants67 0 24 0 3 6 15 24

Number of NFB plants that are planned68 0 50 0 1 10 20 50 % of market share of NFBs in the local brick market 13 25 13 13 13 18 25

67

Includes feasibility studies for 3 demonstration NFB-CBB plants 68

Includes all planned NFB plants that have received and have not received assistance from VABM associated consultants


Annex IV: Agreements


Annex V: Terms of Reference for Project Staff and Consultants

Regular Project Staff

1. National Project Manager (NPM):

Duties and Responsibilities: The incumbent will be responsible for implementation of the project, including mobilization of all project inputs, setup, implementation and maintenance of project’s internal control arrangements, supervision of project staff, consultants and oversight of sub-contractors. The PM will be the leader of the Project Team (PT) and shall liaise with the government, UNDP, and all stakeholders involved in the Project. S/he will be specifically responsible for (a) overall management of the project, (b) work closely with project stakeholders and ensure the project deliveries as per project document and work plan, (c) ensure technical coordination of the project and the work related to regulatory, institutional, financial and implementation aspects, (d) mobilize all project inputs in accordance with UNDP procedures and GEF principles, (e) finalize the ToR for the consultants and subcontractors and coordinate with Business Solution Center for recruitment, procurement and contracting, (f) supervise and coordinate the work of all project staff, consultants and sub-contractors, (g) ensure proper management of funds consistent with UNDP requirements, and budget planning and control, (h) prepare and ensure timely submission of monthly reports, quarterly consolidated financial reports, quarterly consolidated progress reports, annual, mid-term and terminal reports, and other reports as may be required by UNDP; (i) submit the progress reports and key issue report to the Project Steering Committee, (j) prepare quarterly and annual work plan, (k) arrange for audit of all project accounts for each fiscal year (l) undertake field visit to ensure quality of work, and (m) undertake any activities that may be assigned by UNDP and Project Steering Committee. Qualifications and Experience: The incumbent should have a minimum Bachelor degree in Engineering with MBA/Master degree or Masters in energy/environment or other relevant academic discipline and profession qualifications with at least ten (10) years professional experience at senior level. S/he should have extensive experience and technical ability to manage a large project and a good technical knowledge in the fields related to private sector development, climate change, energy efficiency, the construction and building materials sector and institutional development and/or regulatory aspects. S/he must have effective interpersonal and negotiation skills proven through successful interactions with all levels of project stakeholder groups, including senior government officials, financial sectors, private entrepreneurs, technical groups and communities. S/he should have ability to effectively coordinate a complex, multi-stakeholder project and to lead, manage and motivate teams of international and local consultants to achieve results. Good capacities for strategic thinking, planning and management and excellent communication skills both in English and Vietnamese are essential. Knowledge of UNDP project implementation procedures, including procurement, disbursements, and reporting and monitoring will be an added advantage. 2. Admin Assistant (AA):

Duties and Responsibilities: The incumbent will be responsible to provide overall administration services of the Project in support of the Project Accountant and NPM such as processing payments, raising requisition, purchase order, projects logs etc. using UNDP corporate software ATLAS. S/he will be responsible to provide information to UNDP Project web, RRMC reporting and administrative trouble shooting. S/he will also perform (a) word processing, drafting routine letters/messages/reports, mailing (b) arrange travel, itinerary


preparation for project related travels, (c) assist to arrange workshops/seminar/training programmes and mailing, (d) work at reception desk and make appointments and schedule meeting, (e) assist in work-plan and budgeting, (f) photocopying, binding and filing, (g) maintenance of all office equipment and keeping inventory/records of supplies and their usage and any other duties assigned by Project Manager or concerned officials (this would include providing administration to the management of Component 4). Qualifications and Experience: The incumbent should have at least a Bachelor degree in any discipline from a recognized university. S/he should have at least 3 years relevant working experience with foreign aided projects or international development or organizations. Computer proficiency in MS Office (Word, Excel and PowerPoint) and other common software is a prerequisite. Diploma in computer/secretarial science is desirable but not essential. Basic knowledge in procurement, petty cash handling, logistics supports, and filling systems is a basic requirement. Knowledge of UNDP project implementation procedures, including procurement, disbursements, and reporting and monitoring is preferable. Fluent both in written and spoken English and Vietnamese is required. 3. Project Accountant (ACC):

Duties and Responsibilities: The incumbent will be responsible to provide overall financial services of the project such as processing payments, raising requisition, purchase order, projects logs etc. using UNDP corporate software ATLAS. S/he will be responsible to provide information to UNDP Project web, RRMC reporting and administrative trouble shooting. S/he will also prepare work-plan budgets and Project expenditure and any other duties assigned by Project Manager or concerned officials (this would include providing administration to the management of Component 4). Qualifications and Experience: The incumbent should have at least a Bachelor degree in any discipline from a recognized university. S/he should have at least 3 years relevant working experience with foreign aided projects or international development or organizations. Computer proficiency in MS Office (Word, Excel and PowerPoint) and other common software is a prerequisite. Diploma in computer/secretarial science is desirable but not essential. Basic knowledge in procurement, petty cash handling, and accounting systems is a basic requirement. Knowledge of UNDP project implementation procedures, including procurement, disbursements, and reporting and monitoring is preferable. Fluent both in written and spoken English and Vietnamese is required.

Key Short-term Consultants

Detailed TORs of the national and international consultants will be developed during the Project Inception period, in the first 3 months after project start-up, by the NPM in consultation with UNDP and the implementing partners.

4. International Consultant: International Technical Specialist (ITS) for Components 1 to 4

Provide management oversight for project as required and recommend actions that focus work plans on achieving key milestones in a timely manner;

Recommend special expertise to be deployed on the Project to assist in its achievement of key milestones;


Provides strategic advice and oversight quality control towards general NFB plant development, improvements in NFB production, and the promotion programmes on NFB properties and advantages for building construction;

Provide the interface between Project team and key specialist consultants, both domestic and international when appropriate;

Assess current construction codes and standards for buildings, roofs, roads and walls and current construction practices;

Provide assistance and oversight to Project monitoring systems with respect to their design, upkeep and reporting frequencies to report energy intensities and GHG emissions for baseline, and CBB and AAC plants, and the distribution of these reports to MoST and MoNRE

5. International Consultant: International Building Material Specialist (IBMS) for Components 1, 2 and 4

Assess current construction codes and standards for buildings, roofs, roads and walls and current construction practices;

Introduce a suite of international codes and standards utilizing NFBs that could be adopted in Viet Nam’s construction sector;

Implement incremental activities to upgrade building codes and standards to international norms and the increased use of NFBs;

Monitor adoption of new standards and codes and provide recommendations for amendments or improving the rate of NFB adoption if necessary.

6. International Consultant: International Financial Specialist (IFS) for Components 3 and 4

Assess debt financing requirements of NFB projects in particular CBB and AAC plants;

Closely assess available mechanisms for financing capital costs for NFB projects including CBB and AAC plants;

Determine feasible financial mechanisms for scaling-up NFB investments in Viet Nam, notably the use of loan guarantee funds that would allow SMEs to access financing for NFB plants;

Provide work plan and oversight for local finance expert (FE) to facilitate financing mechanisms for scaling-up NFB investments in line with available capital and the Government targets for NFB market share by 2015 and 2020.

7. National Consultant: Capacity Building Advisor (CBA) – Components 1, 2, 3 and 4

Assess baseline skills and absorptive capacity of local and central government personnel (namely DoST, DoC and other local level agencies) to promote and regulate NFB development;

Assess baseline skills and absorptive capacity of prospective NFB investors, managers, operators and plant personnel to manage an NFB project or NFB diffusion program;

In close collaboration with the IBMS, design and conduct workshops and training programmes tailored to government personnel for planning and regulating NFB development at the local level with special targets towards SMEs;


In close collaboration with the IBMS, design and conduct workshops and training programmes tailored to private sector personnel, namely prospective NFB investors, managers, operators and plant personnel, to strengthen their capacity to develop and manage an NFB project;

In close collaboration with the IBMS, design and deliver appropriate training materials and workshops to NFB users, mainly building developers, engineers and architects on the use of NFBs in the construction of high and low-rise buildings, walls, roofs and pavement.

8. National Consultant: Financial Expert (LFE) – Components 3 and 4

Provide assistance to the IFS in determining baseline conditions for financing of NFB projects and NFB diffusion programs;

Assess knowledge of financial institutions on NFB investment risks and loans;

In close collaboration with IFS, design efforts required to increase the knowledge of financial institutions on NFB investments;

Assist participating banks and financial institutions in the implementation of financial mechanisms;

Facilitate capital and RE financing from foreign banks with carbon funds or NAMA-linked funds under the direction of the IFS.

9. National Consultant: Local Building Material Specialist – Components 1, 2 and 4

Provide support to IBMS on the interpretation and use of existing Vietnamese building codes and building material standards;

Provide inputs into new standards and codes that promote the use of NFBs;

Provide strategies to increase the use of NFBs in the building construction industry;

Contribute to building capacity of government personnel with oversight to the NFB development programmes;

Contribute to improving the knowledge of NFB users such as building developers, engineers and architects;

Monitor quality of NFBs from demonstration plants and recommend measures to improve the quality and production rates;

Monitor quality control testing of NFBs to ensure the optimal quality of NFBs reaching the field.

10. National Consultant: Project Engineer (PE) – Component 4

Provide oversight in the full-cycle of NFB plant development and NFB quality including serving as a key resource in the planning, design and implementation of NFB projects;

Provide construction oversight for civil, mechanical and electrical equipment for pilot NFB plants and AAC plants where efficiency improvements are being made;

Work closely with MoST and MoC personnel and project proponents to ensure lessons learned on-the-job are imparted to them.


Annex VI: Preliminary Design Parameters of NFB Pilots

Table V-1: Demo 1

Scenario 1: Concrete block plant 35,000,000 bricks/year

Content Description Note

Scenario Concrete block plant

Product type Concrete brick (block) (220x105x60)mm (standard brick), (390x190x100/150/190)mm

Product grade 7.5-10.0 MPa

Density (kg/m3) 2310 Solid concrete brick

Technology type Vibrating and pressing

Production line 35,000,000 bricks/year Converted to standard brick

Table V-2: Demo 2

Scenario 2: Concrete block plant 20,000,000 bricks/year



Product type Concrete brick (block) (220x105x60)mm (standard brick),

(390x190x100/150/190)mm


Density (kg/m3) 2310 Solid concrete brick

Technology type Vibrating and pressing


Table V-3: Demo 3

Scenario 3: Hollow concrete block plant 10,000,000 bricks/year



Product type Concrete brick (hollow blocks) (180x80x80)mm


Solid density (kg/m3) 2000

Technology type Static pressing



Annex VII: UNDP-GEF Environmental and Social Screening Procedure (ESSP)

Annex VII-A: Environmental and Social Screening Checklist

QUESTION 1:

Has a combined environmental and social assessment/review that covers the proposed project already been completed by implementing partners or donor(s)?

Select answer below and follow instructions:

X NO Continue to Question 2 (do not fill out Table 1.1)

YES No further environmental and social review is required if the existing documentation meets UNDP’s quality assurance standards, and environmental and social management recommendations are integrated into the project. Therefore, you should undertake the following steps to complete the screening process:

1. Use Table 1.1 below to assess existing documentation. (It is recommended that this assessment be undertaken jointly by the Project Developer and other relevant Focal Points in the office or Bureau).

2. Ensure that the Project Document incorporates the recommendations made in the implementing partner’s environmental and social review.

3. Summarize the relevant information contained in the implementing partner’s environmental and social review in Annex A.2 of this Screening Template, selecting Category 1.

4. Submit Annex A to the PAC, along with other relevant documentation.

Note: Further guidance on the use of national systems for environmental and social assessment can be found in Annex B.

TABLE 1.1: CHECKLIST FOR APPRAISING QUALITY ASSURANCE OF EXISTING ENVIRONMENTAL AND SOCIAL ASSESSMENT

Yes/No

1. Does the assessment/review meet its terms of reference, both procedurally and substantively?

n/a

2. Does the assessment/review provide a satisfactory assessment of the proposed project? n/a

3. Does the assessment/review contain the information required for decision-making? n/a

4. Does the assessment/review describe specific environmental and social management measures (e.g. mitigation, monitoring, advocacy, and capacity development measures)?

n/a

5. Does the assessment/review identify capacity needs of the institutions responsible for implementing environmental and social management issues?

n/a

6. Was the assessment/review developed through a consultative process with strong stakeholder engagement, including the view of men and women?

n/a


7. Does the assessment/review assess the adequacy of the cost of and financing arrangements for environmental and social management issues?

n/a

Table 1.1 (continued) For any “no” answers, describe below how the issue has been or will be resolved (e.g. amendments made or supplemental review conducted).

n/a

QUESTION 2:

Do all outputs and activities described in the Project Document fall within the following categories?

Procurement (in which case UNDP’s Procurement Ethics and Environmental Procurement Guide need to be complied with)

Report preparation

Training

Event/workshop/meeting/conference (refer to Green Meeting Guide)

Communication and dissemination of results

Select answer below and follow instructions:

X NO Continue to Question 3

YES No further environmental and social review required. Complete Annex VII-2, selecting Category 1, and submit the completed template (Annex A) to the PAC.

QUESTION 3:

Does the proposed project include activities and outputs that support upstream planning processes that potentially pose environmental and social impacts or are vulnerable to environmental and social change (refer to Table 3.1 for examples)? (Note that upstream planning processes can occur at global, regional, national, local and sectoral levels)

Select the appropriate answer and follow instructions:

NO Continue to Question 4.

X YES Conduct the following steps to complete the screening process: 1. Adjust the project design as needed to incorporate UNDP support to the country(ies), to

ensure that environmental and social issues are appropriately considered during the upstream planning process. Refer to Section 7 of this Guidance for elaboration of environmental and social mainstreaming services, tools, guidance and approaches that may be used.

2. Summarize environmental and social mainstreaming support in Annex A.2, Section C of the Screening Template and select ”Category 2”.

3. If the proposed project ONLY includes upstream planning processes then screening is complete, and you should submit the completed Environmental and Social Screening Template (Annex A) to the PAC. If downstream implementation activities are also

http://content.undp.org/go/userguide/cap/procurement/ethics/?lang=en#top

http://www.undp.org/procurement/documents/UNDP-SP-Practice-Guide-v2.pdf

http://www.greeningtheblue.org/resources/meetings


included in the project then continue to Question 4.

TABLE 3. 1 EXAMPLES OF UPSTREAM PLANNING PROCESSES

WITH POTENTIAL DOWNSTREAM ENVIRONMENTAL

AND SOCIAL IMPACTS

Answer

Yes/No/N.A

1. Support for the elaboration or revision of global- level strategies, policies, plans, and programmes.

For example, capacity development and support related to international negotiations and agreements. Other examples might include a global water governance project or a global MDG project.

No

2. Support for the elaboration or revision of regional-level strategies, policies and plans, and programmes.

For example, capacity development and support related to transboundary programmes and planning (river basin management, migration, international waters, energy development and access, climate change adaptation etc.).

No

3. Support for the elaboration or revision of national-level strategies, policies, plans and programmes.

For example, capacity development and support related to national development policies, plans, strategies and budgets, MDG-based plans and strategies (e.g. PRS/PRSPs, NAMAs), sector plans.

Yes

4. Support for the elaboration or revision of sub-national/local-level strategies, polices, plans and programmes.

For example, capacity development and support for district and local level development plans and regulatory frameworks, urban plans, land use development plans, sector plans, provincial development plans, provision of services, investment funds, technical guidelines and methods, stakeholder engagement.

Yes

QUESTION 4:

Does the proposed project include the implementation of downstream activities that potentially pose environmental and social impacts or are vulnerable to environmental and social change?

To answer this question, you should first complete Table 4.1 by selecting appropriate answers. If you answer “No” or “Not Applicable” to all questions in Table 4.1 then the answer to Question 4 is “NO.” If you answer “Yes” to any questions in Table 4.1 (even one “Yes” can indicated a significant issue that needs to be addressed through further review and management) then the answer to Question 4 is “YES”:

NO No further environmental and social review and management required for downstream activities. Complete Annex VII-B by selecting “Category 1”, and submit the Environmental and Social Screening Template to the PAC.

X YES Conduct the following steps to complete the screening process: 1. Consult Section 8 of this Guidance, to determine the extent of further environmental and

social review and management that might be required for the project.


2. Revise the Project Document to incorporate environmental and social management measures. Where further environmental and social review and management activity cannot be undertaken prior to the PAC, a plan for undertaking such review and management activity within an acceptable period of time, post-PAC approval (e.g. as the first phase of the project) should be outlined in Annex A.2.

3. Select “Category 3” in Annex A.2, and submit the completed Environmental and Social Screening Template (Annex A) and relevant documentation to the PAC.

TABLE 4.1: ADDITIONAL SCREENING QUESTIONS TO DETERMINE THE NEED AND POSSIBLE EXTENT OF FURTHER ENVIRONMENTAL AND SOCIAL REVIEW AND MANAGEMENT

1. Biodiversity and Natural Resources Answer (Yes/No/

Not Applicable)

1.1 Would the proposed project result in the conversion or degradation of modified habitat, natural habitat or critical habitat?

No

1.2 Are any development activities proposed within a legally protected area (e.g. natural reserve, national park) for the protection or conservation of biodiversity?

No

1.3 Would the proposed project pose a risk of introducing invasive alien species?

No

1.4 Does the project involve natural forest harvesting or plantation development without an independent forest certification system for sustainable forest management (e.g. PEFC, the Forest Stewardship Council certification systems, or processes established or accepted by the relevant National Environmental Authority)?

No

1.5 Does the project involve the production and harvesting of fish populations or other aquatic species without an accepted system of independent certification to ensure sustainability (e.g. the Marine Stewardship Council certification system, or certifications, standards, or processes established or accepted by the relevant National Environmental Authority)?

No

1.6 Does the project involve significant extraction, diversion or containment of surface or ground water?

For example, construction of dams, reservoirs, river basin developments, groundwater extraction.

No

1.7 Does the project pose a risk of degrading soils? No

2. Pollution

2.1 Would the proposed project result in the release of pollutants to the environment due to routine or non-routine circumstances with the potential for adverse local, regional, and transboundary impacts?

Yes

2.2 Would the proposed project result in the generation of waste that cannot be recovered, reused, or disposed of in an environmentally and socially sound manner?

No

2.3 Will the propose project involve the manufacture, trade, release, and/or No

http://www.pefc.org/

http://www.fsc.org/

http://www.fsc.org/

http://www.msc.org/

http://www.msc.org/



use of chemicals and hazardous materials subject to international action bans or phase-outs?

For example, DDT, PCBs and other chemicals listed in international conventions such as the Stockholm Convention on Persistent Organic Pollutants, or the Montreal Protocol.

2.4 Is there a potential for the release, in the environment, of hazardous materials resulting from their production, transportation, handling, storage and use for project activities?

Yes

2.5 Will the proposed project involve the application of pesticides that have a known negative effect on the environment or human health?

No

3. Climate Change

3.1 Will the proposed project result in significant69

greenhouse gas emissions?

Annex E provides additional guidance for answering this question.

No

3.2 Is the proposed project likely to directly or indirectly increase environmental and social vulnerability to climate change now or in the future (also known as maladaptive practices)? You can refer to the additional guidance in Annex C to help you answer this question.

For example, a project that would involve indirectly removing mangroves from coastal zones or encouraging land use plans that would suggest building houses on floodplains could increase the surrounding population’s vulnerability to climate change, specifically flooding.

No

4. Social Equity and Equality

4.1 Would the proposed project have environmental and social impacts that could affect indigenous people or other vulnerable groups?

No

4.2 Is the project likely to significantly impact gender equality and women’s empowerment

70?

No

4.3 Is the proposed project likely to directly or indirectly increase social inequalities now or in the future?

No

4.4 Will the proposed project have variable impacts on women and men, different ethnic groups, social classes?

No

4.5 Have there been challenges in engaging women and other certain key groups of stakeholders in the project design process?

No

4.6 Will the project have specific human rights implications for vulnerable No

69

Significant corresponds to CO2 emissions greater than 100,000 tons per year (from both direct and indirect sources). Annex E provides additional guidance on calculating potential amounts of CO2 emissions. 70 Women are often more vulnerable than men to environmental degradation and resource scarcity. They typically

have weaker and insecure rights to the resources they manage (especially land), and spend longer hours on collection of water, firewood, etc. (OECD, 2006). Women are also more often excluded from other social, economic, and political development processes.

http://chm.pops.int/Convention/tabid/54/language/en-US/Default.aspx#convtext

http://chm.pops.int/Convention/tabid/54/language/en-US/Default.aspx#convtext

http://www.oecd.org/dataoecd/4/21/37353858.pdf



groups?

5. Demographics

5.1 Is the project likely to result in a substantial influx of people into the affected community(ies)? No

5.2 Would the proposed project result in substantial voluntary or involuntary resettlement of populations?

For example, projects with environmental and social benefits (e.g. protected areas, climate change adaptation) that impact human settlements, and certain disadvantaged groups within these settlements in particular.

No

5.3 Would the proposed project lead to significant population density increase which could affect the environmental and social sustainability of the project?

For example, a project aiming at financing tourism infrastructure in a specific area (e.g. coastal zone, mountain) could lead to significant population density increase which could have serious environmental and social impacts (e.g. destruction of the area’s ecology, noise pollution, waste management problems, greater work burden on women).

No

6. Culture

6.1 Is the project likely to significantly affect the cultural traditions of affected communities, including gender-based roles? No

6.2 Will the proposed project result in physical interventions (during construction or implementation) that would affect areas that have known physical or cultural significance to indigenous groups and other communities with settled recognized cultural claims?

No

6.3 Would the proposed project produce a physical “splintering” of a community?

For example, through the construction of a road, power line, or dam that divides a community.

No

7. Health and Safety

7.1 Would the proposed project be susceptible to or lead to increased vulnerability to earthquakes, subsidence, landslides, and erosion, flooding or extreme climatic conditions?

For example, development projects located within a floodplain or landslide prone area.

No

7.2 Will the project result in increased health risks as a result of a change in living and working conditions? In particular, will it have the potential to lead to an increase in HIV/AIDS infection?

No

7.3 Will the proposed project require additional health services including testing? No

8. Socio-Economics



8.1 Is the proposed project likely to have impacts that could affect women’s and men’s ability to use, develop and protect natural resources and other natural capital assets?

For example, activities that could lead to natural resources degradation or depletion in communities who depend on these resources for their development, livelihoods, and well-being?

No

8.2 Is the proposed project likely to significantly affect land tenure arrangements and/or traditional cultural ownership patterns? No

8.3 Is the proposed project likely to negatively affect the income levels or employment opportunities of vulnerable groups? Yes

9. Cumulative and/or Secondary Impacts

9.1 Is the proposed project location subject to currently approved land use plans (e.g. roads, settlements) which could affect the environmental and social sustainability of the project?

For example, future plans for urban growth, industrial development, transportation infrastructure, etc.

Yes

9.2 Would the proposed project result in secondary or consequential development which could lead to environmental and social effects, or would it have potential to generate cumulative impacts with other known existing or planned activities in the area?

For example, a new road through forested land will generate direct environmental and social impacts through the cutting of forest and earthworks associated with construction and potential relocation of inhabitants. These are direct impacts. In addition, however, the new road would likely also bring new commercial and domestic development (houses, shops, businesses). In turn, these will generate indirect impacts. (Sometimes these are termed “secondary” or “consequential” impacts). Or if there are similar developments planned in the same forested area then cumulative impacts need to be considered.

Yes


ANNEX VII-B: ENVIRONMENTAL AND SOCIAL SCREENING SUMMARY

(To be filled in after Annex VII-A has been completed)

Name of Proposed Project: “Viet Nam: Promotion of Non-Fired Bricks (NFB) Production and Utilization” (NFB)

A. Environmental and Social Screening Outcome

Select from the following:

Category 1. No further action is needed

Category 2. Further review and management is needed. There are possible environmental and social benefits, impacts, and/or risks associated with the project (or specific project component), but these are predominantly indirect or very long-term and so extremely difficult or impossible to directly identify and assess.

Category 3. Further review and management is needed, and it is possible to identify these with a reasonable degree of certainty. If Category 3, select one or more of the following sub-categories:

Category 3a: Impacts and risks are limited in scale and can be identified with a reasonable degree of certainty and can often be handled through application of standard best practice, but require some minimal or targeted further review and assessment to identify and evaluate whether there is a need for a full environmental and social assessment (in which case the project would move to Category 3b).

Category 3b: Impacts and risks may well be significant, and so full environmental and social assessment is required. In these cases, a scoping exercise will need to be conducted to identify the level and approach of assessment that is most appropriate.

B. Environmental and Social Issues (for projects requiring further environmental and social review and management)

Environmental Issues: The Project will facilitate the development of 4 pilot non-fired brick (NFB) manufacturing plants and the retirement of fired-clay brick (FCB) kilns. Environmental issues related to the development of NFB plants include: a) the location of an industrial facility on land properly zoned for industrial purposes; b) increased transport of raw materials to the NFB plant; and c) GHG emissions from the use of electricity from the plant. Environmental issues related to the retirement of FCB kilns include: a) the conversion of the land use on which the FCB kiln was located to a less carbon intensive activity such as an NFB plant or other uses; b) reduced mining and subsequent degradation of agricultural clay soils that are used as raw materials for clay bricks; and c) reduction of GHG emissions from the use of coal to manufacture FCBs. The net environmental result of the Project should be the reduction of GHG emissions from the migration to NFB technology, reduced local air pollution and less degradation of agricultural lands throughout Viet Nam.

Social Issues: The Project will assist the Government in the retirement of FCB kilns, an activity that will have an adverse impact on these traditional businesses. The Project design is cognizant of this impact and will mitigate the impacts through training and awareness programs for these businesses to migrate to the less carbon intensive NFB plants, and to assist these businesses in increasing their access to financing packages for conversion to NFB technology. In addition, the migration of these businesses to a more modern working environment in NFB plants will benefit the numerous women who work in the FCB businesses where they are


engaged in manual and physical labor. Current labor conditions in most FCB facilities are poor, and worsen during the wet monsoon seasons. The firing process presents a safety hazard for workers. Since a large proportion of brick laborers are women, the shift to NFB production will translate into improved working conditions as NFB manufacturing is done mostly under covered conditions, and is safer without a firing process. It is expected that NFB plants will have safer working conditions and equipment that will reduce the physical requirement of this sector of the labor force.

C. Next Steps (for projects requiring further environmental and social review and management):

The Project design already has components and outputs that will provide oversight and mitigative actions to counter any adverse impacts from the conversion of FCBs to NFBs:

-Output 1.2 will assemble a plan for the feasible retirement of FCB kilns. The retirement plan will be complete with a social impact assessment and actions to mitigate the income disruptions resulting from the changing of technologies;

- Output 1.5 will assist the Government in the setting of emission and energy efficiency standards that will result in actions to reduce GHG emissions in the brick making industry in Viet Nam;

-Outputs 2.4 and 4.5 will provide training to ensure the operators of the NFB plants comply with energy consumption standards for the NFB industry that will ensure GHG reductions from the Project activities and the generation of maximum profits that will enable new NFB owners to repay loans and sustain a new NFB business;

-Output 3.5 will provide assistance to all potential new NFB entrepreneurs, most notably the ones coming from FCB technology who are SMEs, to access financing at concessional rates and with insufficient collateral

-Output 4.1 will assist the pilot NFB project proponents in the planning of the pilot NFB plants in a manner that meets all required environmental and social impact assessments. For example, the feasibility analysis will provide the location and design of demonstration NFB plants with mitigative actions that will minimize social and environmental impacts;

-Output 4.4 will assist NFB project proponents in the implementation of NFB plants by following the mitigative actions provided in the studies from Output 4.1. This will also serve as a “NFB development” demonstration that can be replicated for other NFB developments in all aspects of maximizing environmental and social benefits.

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United Nations Development Programme Country: Viet Nam PROJECT … · 2019-10-01 · Project Title:...

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