$254 mln wind power project generates annual ‘positive impacts’ worth $14 mln: ADB

The 144-megawatt, $254.2 million Lotus Wind Power project has contributed $89.6 million to Vietnam’s GDP during construction and generated benefits of $13.9 million annually since it became operational.

This assessment is made in a recently released Asian Development Bank (ADB) report titled “Measuring the economic impacts of a wind power project in Vietnam.”

In 2021, the ADB arranged and syndicated a $173-million financing package for the project, which features three wind farms of 48 MW each: Lien Lap, Phong Huy, and Phong Nguyen in the central province of Quang Tri.

It is the first wind power project that the ADB and partners have financed in Vietnam. Construction began in May 2019 and was completed in October 2021, when the wind farm started delivering electricity to the national grid.

The ADB report says that an econometric model was used in analyzing the project’s: direct impacts such as investment, construction and engineering services; indirect impacts such as manufacturing of parts and intermediate products; and induced impacts, such as spending of household earnings by project employees.

It says that during construction, the project had induced impacts of $43.94 million, indirect impacts of $40.03 million and direct impacts of $5.65 million. A key part of induced impacts was $23.1 million in import taxes collected by the provincial authorities.

The report also estimates that during operation and maintenance, the project would have an annual impact of $9.5 million for the next 20 years, comprising $6.61 million in direct impacts, $2.58 million in indirect impacts and $0.3 million in induced impacts.

The project generated $29.13 million in earnings for 1,574 full-time equivalent employees during construction; while earnings related to operation and maintenance phase reached $4.4 million annually, mostly for on-site workers.

“The project is an example of harmonious coexistence of environmental sustainability and economic growth. The cumulative benefits presented in this study far outweigh the economic costs and eventual tax losses associated with the incentives granted by the government,” the report concludes.