Nam Hong Hydropower Project (GS project ID: GS961) (UN

SUSTAINABILITY VERIFICATION REPORT

Nam Hong Hydropower Project (GS project ID: GS961)

(UN reference number: 5164)

The first monitoring period: 01/07/2012 - 30/04/2014

(the first day and last day included)

REPORT NUMBER: CDM00444 REVISION NUMBER: 1.0

Deloitte Tohmatsu Evaluation and Certification Organization (Deloitte-TECO)

DELOITTE-TECO

GS VERIFICATION REPORT

Date of first issue: Project number:

07/08/2014 CDM00444

Approved by: Organizational unit:

INANAGA, Hiroshi Deloitte Tohmatsu Evaluation Certification Organization

Client: Client reference number:

Vietnam Carbon Assets Ltd. -

Project title: Nam Hong Hydropower Project

Host country: Annex 1 country: GHG reducing measure/technology:

Vietnam Switzerland Grid-connected hydropower generation

Scope: Size: Emission Reduction for the period:

Sectoral scope(s): 01 - Energy industries (renewable sources);

Large 29,992 tCO2e

Approved methodology: ACM0002 (version 12.1.0)

Report number: Subject group: Indexing terms

CDM00444 Environment Verification, Clean Development Mechanism, Gold Standard

Work carried out by:

TANABE, Koichiro (Team leader) No distribution without permission from the client or responsible organizational unit

Limited distribution

Unrestricted distribution

Work verified by:

TADA, Kunio

Date of this revision: Revision number: Number of pages: 03/09/2014 1.0 34

DELOITTE-TECO

Report No: CDM00444 rev.1.0

VERIFICATION REPORT

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Abbreviations CAR Corrective Action Request CDM Clean Development Mechanism CER Certified Emission Reduction CL Clarification Request CO2 Carbon Dioxide CO2e Carbon Dioxide Equivalent DOE Designated Operational Entity EB Executive Board EIA Environmental Impact Assessment EVN Electricity of Vietnam ER Emission Reduction FAR Forward Action Request FSR Feasibility Study Report GHG Greenhouse Gas(ses) GS Gold Standard GSF Gold Standard Foundation JI Joint Implementation MP Monitoring Plan MR Monitoring Report ODA Official Development Assistance PDD Project Design Document PO Project Owner PP Project Participant UNFCCC United Nations Framework Convention on Climate Change VER Verified Emission Reduction VVM Validation and Verification Manual VVS Validation and Verification Standard

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VERIFICATION REPORT

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Table of Contents Page

1 EXECUTIVE SUMMARY ................................................................................ 3

2 INTRODUCTION ............................................................................................ 4 2.1 Objective of CDM verification 4 2.2 Scope of verification 4 2.3 Validation information 5 2.4 Description of the project activity 5

3 VERIFICATION METHODOLOGY .................................................................. 6 3.1 Verification team 6 3.2 Desk review and on-site visit 7 3.3 Verifying monitored indicators and parameters 8 3.4 Resolution of CARs, CLs, and FARs 9 3.5 Internal quality control, including technical review 9

4 VERIFICATION FINDINGS ............................................................................. 9 4.1 Remaining issues from the validation 9 4.2 Deviations in GHG ER 10 4.3 Sustainability monitoring check 12

5 TECHNICAL REVIEW .................................................................................. 19

6 CONCLUSION .............................................................................................. 19

7 VERIFICATION OPINION ............................................................................. 20

APPENDIX A: GS VERIFICATION CHECKLIST ....................................................... 22

APPENDIX B: REFERENCES ................................................................................... 30

APPENDIX C: ENGAGEMENT QUALITY ASSURANCE REVIEW SYSTEM ........... 32

APPENDIX D: QUALIFICATIONS ............................................................................. 33 History of this document:

Version Date Nature of revision

0.1 01/08/2014 Initial preparation

0.2 07/08/2014 A revision after internal review

1.0 03/09/2014 Final verification report for initial submission for issuance Note:

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General principles of calendar date representation are “31 January 2012,” “31 Jan 2012,” or “31/01/2012” following dd/mm/yyyy.

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1 EXECUTIVE SUMMARY Deloitte-TECO has performed the first periodic verification inspection, based on the GS, of GHG ER, which was stated in the Monitoring Report of Gold Standard (GS-MR, version 01, dated 21/04/2014) for the “Nam Hong Hydropower Project” (GS Project ID: GS961 and CDM reference number: 5164) for the monitoring period covering from 01/07/2012 to 30/04/2014. Desk review of the GS-MR and the subsequent on-site visit with follow-up interviews have been conducted by Deloitte-TECO in accordance with the GS requirements (version 2.1) in addition to the approved methodology (ACM0002, version 12.1.0), MP, and physical features planned in the registered Passport (version 2.3, dated 11/06/2012) and the registered PDD (version 2.3, dated 21/07/2011). During the GS first periodic verification, outstanding issues were identified as three CARs and six CLs (and as a result one FAR). Those issues are dealt with as described in the following part of this report and summarized in Section 4 of the report herein. After resolution of the CARs/CLs/FAR, which were supplemented with demonstrative relevant evidence, those issues have been eventually closed. Through the GS periodic verification, it was demonstrated that the MP of the project activity (in the registered GS Passport (version 2.3, dated 11/06/2012) and the revised PDD (version 2.4, dated 05/06/2014)) and the actual implementation (in the revised GS-MR (version 2.1, dated 11/08/2014)) reflecting the results of the verification, meets all relevant GS requirements and all relevant host country criteria and correctly applies the baseline and monitoring methodology. Accordingly, it was determined that the project has achieved ERs of 29,992 tCO2e, which are calculated in the ER calculation spreadsheet. In conclusion, Deloitte-TECO requests issuance of CERs in consideration of the ERs of 29,992 tCO2e for the period covering from 01/07/2012 to 30/04/2014 of the registered GS project activity.

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2 INTRODUCTION

2.1 Objective of CDM verification The objective of the GS periodic verification is to confirm that the project activity, “Nam Hong Hydropower Project” (GS Project ID: GS961 and CDM reference number: 5164) for the period covering from 01/07/2012 to 30/04/2014 complies with the MP of the GS Passport in accordance with GS requirements (version 2.1). The GS verification for the CDM project was scheduled to be conducted at the same time and in the same time period as the verification under the regular CDM project cycle. As a part of the independent verification work contracted by the client (Vietnam Carbon Assets Ltd., one of the PPs), Deloitte-TECO conducts an on-site assessment of GHG ERs and the relevant information related to the parameters to be monitored. Deloitte-TECO reviews the GHG data and the relevant monitored indicators for the above-mentioned period to verify ERs within the project boundary.

2.2 Scope of verification The scope of the GS verification is defined as an independent and objective review and ex-post determination of the GS-monitored parameters. The verification is based on the submitted GS-MR and the registered GS Passport/PDD documents, including its MP and additional GS requirements. The GS-MR and associated documents are reviewed against the GS MP and GS requirements. Deloitte-TECO has also, based on the recommendations in the CDM VVS, employed a risk-based approach in the verification. The scope of the verification includes:

- assessing sustainable development - confirming baseline methodology and additionality - assessing environmental impacts - monitoring methodology and plan - assessing site activities, including plant construction and operations - confirming the methodology used and results of the power station’s MP

and activities vis-à-vis the registered Passport - verifying the information used to determine the supply and consumption of

electricity

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2.3 Validation information The basic information of the GS and CDM validation are as follows:

Item Detail 1) GS Validator China Environmental United Certification Center Co., Ltd. (CEC) Report number 11013093 Date of the report issued 10/02/2012 (and revised on 03/07/2012) Registration date 09/05/2012 Crediting period The same as the crediting period of the CDM project Project view page http://mer.markit.com/br-reg/public/project.jsp?project_id=103000000001969 2) CDM Validator China Environmental United Certification Center Co., Ltd. (CEC) Report number 11011093 Date of the report issued 26/08/2011 Registration date 02/09/2011 Crediting period 01/07/2012 – 30/06/2019 (renewable) Project view page http://cdm.unfccc.int/Projects/DB/CEC1314779963.83/view

2.4 Description of the project activity Basic description of the project activity and the relevant entities are as follows: Item Detail Project title Nam Hong Hydropower Project UNFCCC registration number 5164 Project location The project is located on Nam Hong stream, in Chieng Cong commune,

Muong La district, Son La province, Vietnam. The geographical coordinates of the project are:

Hydropower plant Northern latitude Eastern longitude Nam Hong 1 Power house 21027’12’’ 104013’14’’

Dam 21027’08’’ 104014’12’’ Nam Hong 2 Power house 21027’24’’ 104011’36’’

Dam 21027’36’’ 104012’30’’

PP (Vietnam, host party)

Organization Nam Hong Hydropower Investment & Construction Joint Stock Company (private entity)

Address No. 234, Lane 8, Chu Van Thinh street, Son La city, Son La province, Viet Nam

Represented by Hoang Van Hoan (Mr.) PP (Vietnam, host party)

Organization Energy and Environment Consultancy Joint Stock Company (private entity) Address Floor 6, Lac Hong Building, Alley 85, LeVan Luong Street, Hanoi city, Viet Nam Represented by Dang Thi Hong Hanh (Ms.)

PP (Switzerland, other involved party)

Organization Vietnam Carbon Assets Ltd. (private entity) Address Technoparkstr. 1, Zurich, 8005, Switzerland Represented by Renat Heuberger (Mr.)

Technical aspects of the power station 1) Hydropower station type: Run-of-river type (with a new reservoir) 2) Unit of turbine/generator: Total 16 MW (8MW × 1 unit at Nam Hong 1

hydropower plant, and 8MW × 1 unit at Nam Hong 2 hydropower plant) 3) Two transformers (T1, T2): 6.3kV->110kV 4) Transmission line:

- One transmission line of generated electricity (110kV) for exporting to and importing from EVN

- One backup transmission line (35kV) for internal use in case of emergency

5) Four monitoring meters:

http://mer.markit.com/br-reg/public/project.jsp?project_id=103000000001969

http://cdm.unfccc.int/Projects/DB/CEC1314779963.83/view

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- One main power meter (CTC): Bidirectional meter for monitoring the electricity exported to and imported from EVN through 110kV transmission line

- One backup power meter (CTP): Bidirectional meter for monitoring the electricity exported to and imported from EVN through 110kV transmission line

- Two power meters for internal use (CT-TD1,2): Unidirectional meter for monitoring the electricity imported from EVN through 35kV transmission line, for internal use in case of emergency

6) No on-site generator for emergency use is described. Factors contributing to GHG ERs GHG ERs are calculated by multiplying the emission factor and the amount of

net electricity exported to EVN.

3 VERIFICATION METHODOLOGY

3.1 Verification team A competent team with the necessary knowledge for specific CDM technical and methodological aspects as well as skills to perform verification activities in order to achieve intended results was appointed by Deloitte-TECO. The appointment of the team takes into account the required scope, technical area, and project activity knowledge requirements for verifying the implementation of the registered project and the ERs achieved during the monitoring period. The qualifications of the DOE’s verification team member and internal technical reviewer are attached in Appendix D of this report. Team

Name

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Competence Type of involvement

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TANABE, Koichiro L LA ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1) L: Leader, M: Member, and T: Trainee 2) LA: Lead Auditor, A: Auditor, and O: Observer

Reviewer

Name Role

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TADA, Kunio Technical Reviewer ✓ ✓ ✓ ✓ ✓ -

ISHIGAI, Chikara GHG Group Leader, Engagement Quality Assurance Review ✓ ✓ ✓ ✓ ✓ -

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ICHIKAWA, Masahiko Judging Committee Chair - - - - ✓ -

INANAGA, Hiroshi Chief Executive Officer ✓ - ✓ - ✓ -

3.2 Desk review and on-site visit The desk review of the GS-MR (version 01, dated 21/04/2014) took place from 22/04/2014, and both the GS Passport (version 2.3, dated 11/06/2012) and the relevant GS validation report (version 3, dated 03/07/2012) were taken into consideration for risk assessment. On-site visit for verification was conducted on 06/05/2014 through 08/05/2014, and it consisted of follow-up interviews with the PO and physical inspection of the operating power plant site. The site visit schedule and the on-site interviewees are listed below:

Site visit schedule Date Day From To Time To Do Remark

06/05/2014 Tue 9:00 11:00 2:00 Preparation for the site visit and additional desk review Hanoi city

11:00 12:00 1:00 Lunch

12:00 20:00 8:00 Travel from Hanoi city to Son La city By car 07/05/2014 Wed 7:00 9:00 2:00 Travel from Son La city to the project site By car

9:00 12:00 3:00 On-site assessment, including opening meeting, plant tour, and interview with PO and local stakeholders

The power plant

12:00 13:00 1:00 Lunch at the project site

13:00 17:00 4:00 On-site assessment, including document check and closing meeting

17:00 19:00 2:00 Travel from the project site to Son La city By car

08/05/2014 Thu 7:00 14:00 7:00 Travel from Son La city to Hanoi city, including lunch By car

14:00 17:00 3:00 Wrap-up meeting Hanoi city

Interviewee list

Name Business title Organization

Vu Van Quang Project manager Energy and Environment Consultancy Joint Stock Company

Nguyen Duc Thoa Manager Nam Hong 2 hydropower station

Truong Quang Duc Manager Chieng Cong 1 & 2 hydropower station Tran Manh Thang Manager Nam Hong 1 hydropower station

Lo Van Dung Local resident Nam Hong village Tong Manh Hung Shift leader Nam Hong 2 hydropower station Ha Van Thuy Shift leader Nam Hong 2 hydropower station

Nguyen Hong Thang Operator Nam Hong 2 hydropower station Mua A Lu Chairman People's committee of Chieng Cong commune

Lo Van Dung Land administration staff Chieng Cong commune Truong Dinh Dinh Administrative manager Nam Hong Hydropower Investment & Construction

Joint Stock Company

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3.3 Verifying monitored indicators and parameters The monitored indicators and parameters that have been defined in the Passport are divided into two categories (eligibility conditions and indicators/parameters of the sustainability MP) as specified below:

1. Eligibility conditions

ID Check item Description How to verify

1-1 Project type eligibility for hydro

Table C-1 of Annex C - Installed capacity (less than, or

equal to 20 MWe)

It will be confirmed through evidential documents and observation at the site visit that there is no gap between the validated project design and the project implementation.

1-2 Special guidance for hydro projects

Table C-2 of Annex C - Management domain - Hydropeaking - Reservoir management - Sediment management - Power plant design - Social impacts

It will be confirmed through evidential documents and observation at the site visit that there is no gap between the validated project design and the project implementation.

2. Sustainability MP

ID Indicator Chosen parameter How to verify

2-1 Quality of employment

Training records, functions of jobs created, labor conditions of the project activity, occupation health management, safeguards put place and living standards of the plant staff.

It will be cross-checked through observation and interview with local residents. - Training records - Organization chart - Occupational safety and health management

procedure - Health check report of employees - Documentation related to welfare activity

2-2 Access to affordable and clean energy services

The operation of hydropower plant It will be cross-checked through observation and interview with local residents.

2-3 Quantitative employment and income generation

Employment creation/income generation

It will be cross-checked through observation and interview with local residents. - Statistical data of annual income of the local

area - Actual data of total amount of annual salary in

the power plant - Compensation plan for resettlement, and

receipt list of compensation 2-4 Air quality Dust, waste gases, and other air

pollutant, including noise It will be cross-checked through observation and interview with local residents. - Construction contract - Supervision report on the contract phase

2-5 Water quantity and quality

- Contamination of public resources - Minimum flow

It will be cross-checked through observation and interview with local residents. - Construction contract - Supervision report on the contract phase - Reservoir operational procedure

2-6 Soil condition Land loss, erosion It will be cross-checked through observation and interview with local residents. - Construction contract - Supervision report on the contract phase

2-7 Biodiversity/Fish passage

- Fish passage - Cultivation of plants and

afforestation for affected areas

It will be cross-checked through observation and interview with local residents. - Construction contract - Supervision report on the contract phase

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3.4 Resolution of CARs, CLs, and FARs The objective of this phase of the verification is to resolve CARs/CLs/FARs, which need to be clarified for Deloitte-TECO’s conclusion on the GS-MR. During the on-site inspection, findings were raised by Deloitte-TECO as three CARs and six CLs (and as a result one FAR), and those were also resolved through communication with the PPs after the on-site assessment. To maintain the transparency of the verification process, the concerns raised and responses given were described in the verification report. As amendment of the GS-MR was necessary to resolve Deloitte-TECO’s concerns, the PPs decided to revise the GS-MR. After reviewing the revised GS-MR, Deloitte-TECO reached their conclusion on the verification report and the verification opinion.

3.5 Internal quality control, including technical review The draft and final verification reports were reviewed in accordance with Deloitte-TECO’s internal quality control policy. A technical review was performed by a technical reviewer who meets Deloitte-TECO’s qualification criteria for CDM verification. The details of Engagement Quality Assurance Review System are attached in Appendix C of this report.

4 VERIFICATION FINDINGS It was confirmed through the on-site visit assessment that all monitoring parameters defined in the GS Passport have been monitored and the information given in the revised GS-MR has been confirmed. The CDM verification was also conducted by the same DOE (Deloitte-TECO) under the regular CDM project cycle, at the same time as the GS verification, covering the same monitoring period.

4.1 Remaining issues from the validation Deloitte-TECO took note of the remaining issues (one FAR was raised by the GS validator and two FARs were raised by GSF at the GS validation stage) as follows:

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ID Details of FAR Raised

by Relevant document

1 (FAR01) Further confirmation is needed regarding whether both turbines represent a single project, by checking the transmission line, electricity meters, and joint balance sheet before the first issuance.

Validator GS validation report

2 (FAR #1) The verifying DOE shall please validate the installed electricity meters and check those against their calibration details.

GS technical expert

8-week registration review period

3 (FAR #2) The verifying DOE shall check the installed valve at the dam structure against its integrity for maintaining the minimum flow as determined by the EIA. The DOE shall base its view based on fieldwork and observations to be provided on time for the first verification. The DOE shall also clearly state that the valve structure is assured to be fixed to allow the minimum flow and cannot be manually closed completely.

GS technical expert

8-week registration review period

As for ID 1 in the table above, it was confirmed during the on-site plant tour and through the relevant evidential documents (e.g., joint balance sheet and PPA) that the registered hydropower project consists of the two hydropower stations (Nam Hong 1 and Nam Hong 2) and all of the installed equipment are in line with the substantive design of equipment at the design stage. As for ID 2 in the table above, the installed electricity meters (CTC, CTP, and CT-TD) were checked at the site inspection and through the certificate of calibration. As a result, the calibration of those measuring equipments was verified successfully; however, the MP was revised in terms of the actual number of installed power meters. The details are discussed in other part of this checklist. As for ID 3 in the table above, it was confirmed that the dam structure for maintaining the minimum flow as determined by the EIA was confirmed through field interviews with the PO and the actual implementation, and the explanation of the construction contractor supplements to conclude that the installed valve structure of sand discharge gates does not allow the gates to be closed manually. The design of the installed valve system leaves a gap at the bottom of the dates for allowing water (and fishes) to pass through. The details are discussed in other part of this checklist. Therefore, the FARs identified at validation were closed at the first verification.

4.2 Deviations in GHG ER It was determined that GHG ER monitoring in the GS project activity has been implemented in accordance with the GS conservativeness principles, which are defined in GS Passport (version 2.3). The details are discussed in the following subsections:

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1) Eligibility conditions Through the on-site interview with the PPs, eligibility conditions of the following aspects were verified successfully. Therefore, it was considered reasonable. Eligibility criteria Review results

GS general eligibility requirements

General requirements and statement on preannouncement were confirmed at the validation stage. It was also verified through the site inspection and interviews with the PPs/local stakeholders that no further fact or additional information was found at the verification stage.

Project location Eligible project activity location in terms of GS CDM host country was confirmed at the validation stage, and it was also confirmed that there is no post-registration changes on this matter at the verification stage.

Project gases Eligible project activity gases were confirmed at the validation stage, and it was also confirmed at the verification stage that the project activity involves the reduction of CO2 only for the crediting of ERs under the GS.

Project type Eligible project type was confirmed at the validation stage, and it was also confirmed at the verification stage that the project type is categorized into Renewable Energy Supply (hydro) under the GS.

Project scale Eligible project scale was confirmed as a large scale at the validation stage, and it was also confirmed at the verification stage as defined in accordance with UNFCCC rules and as explained in Section T.1.2.a under the GS.

Methodologies for project activities

Eligible methodologies for project activities were confirmed at the validation stage, and it was also confirmed at the verification stage that ACM0002 (version 12.1.0) and the relevant methodology tools defined are reasonable to be applied in accordance with UNFCCC rules and as explained in Section T.2.2 under the GS.

ODA funding The information related to ODA support for project activities was confirmed at the validation stage. It was also verified through the site inspection and interviews with the PPs/local stakeholders that no further fact or additional information was found at the verification stage.

Relationship between GS CDM submissions and GS VER submissions

It was confirmed through interviews with the PPs that they are not considering any submissions to VER streams.

Project involvement in other certification or emissions trading scheme

It was confirmed through interviews with the PPs that they are not considering to be involved in other certification or emissions trading schemes.

Specific additional eligibility criteria of project types

1) Project type eligibility: Hydro in Table C-1 of Annex C "Project activities involving hydropower plants with an installed capacity of less than, or equal to 20 MWe shall be eligible for Gold Standard registration." It was confirmed through evidential documents and the site inspection that total installed capacity of the hydropower project is 16 MW, less than 20 MWe, and thus there is no gap between the validated project design and the project implementation about the capacity. 2) Special guidance for hydro projects in Table C-2 of Annex C) - Management domain - Hydropeaking - Reservoir management - Sediment management - Power plant design - Social impacts It was confirmed through evidential documents and the site inspection that no gap marked

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between the validated project design and the project implementation were observed for special guidance for hydro projects.

2) Additionality assessment It was confirmed at the on-site inspection that there are no substantial changes to the project design of the registered GS project activity during the monitoring period that adversely affect the additionality of the project activity, and no deviations or concerns on additionality were found in this monitoring period.

4.3 Sustainability monitoring check It was determined that sustainability monitoring in the GS project activity has been implemented in compliance with the monitoring parameters defined in sustainability MP of GS Passport (version 2.3). The findings of monitored indicators and parameters that have been defined in the Passport and Section 3.3 in this report are discussed in the following subsections. (CL1) General requirement related to GS-MR It was confirmed that the GS-MR contains the following:

- Monitoring table from the PDD and Passport; - Data entry sheets of self-monitored parameters; - Remarks on the monitoring process used; - Current status of the parameters in the table; - Other data sources to substantiate the claims;

However, it was found that there is no description regarding "Scoring of your indicators compared to your baseline indicator situation" in the GS-MR. Therefore, clarification was requested (CL1), and it is necessary to provide the DOE with a revised GS-MR, including its description. (CAR2 and FAR1) Finding related to quality of employment:

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As for “Quality of employment” (indicator No. 1), first of all it was requested to clarify the results of the monitored parameter in the GS-MR, by using quantitative values (CL2). In addition, during the site inspection, it was observed that the transformer station of Nam Hong 2 power plant was neither fenced nor locked. The area was easily accessible for the plant employees and there were no physical barriers to keep them out of the transformer station area. The verification team was concerned about that situation, which may cause harm to them in terms of electric shock hazard. Therefore, CAR was raised and it was requested to consider any countermeasures seriously (CAR2).

The transformer area of Ham Hong 2 plant

PP response: Indicator No. 1 "Quality of employment" was modified with quantitative description. The monitored parameters and baseline data for comparison regarding the income generation were further described in the revised GS-MR. On the other hand, to secure employee’s safety, all employees of Nam Hong 2 hydropower plant have been informed about the danger of transformer, and required to stay at least 1.5 meters away from the transformer station. Also, the PO created a plan to build the fence surrounding the transformer, for controlling the hazardous situation. DOE conclusion: It was confirmed that the employees are checked up every six months at the medical centers for free using their health insurance, as a part of benefit package of welfare program that is explained by the PO. As for request for clarification about employee's income, it was also confirmed that the monitored parameters of employee's income are compatible and considered reasonable. Therefore, CL was closed.

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In addition, it was explained by the PO that it has conducted its emergency measures (safety training for the plant employees) and also has developed a plan for permanent measures (to build fixed fences around the transformer station) against the hazardous situation of the transformer station area. The explanation given by the PP about the plan was considered reasonable, and therefore, CAR was closed and FAR was raised instead. It is required that a verifying DOE of the subsequent (the second) monitoring period will confirm actual implementation of the proposed plan, for both Nam Hong 1 and Nam Hong 2 transformer stations. (FAR1). (CL2) Finding related to access to affordable and clean energy services: As for “Access to affordable and clean energy services” (indicator No. 2), it is requested to clarify the results of the monitored parameter in the GS-MR, by using quantitative values. Also, for a description about average price of electricity, it was required to indicate it in the GS-MR, in terms of accessibility of affordable/clean power comparing to that of fossil-fuel-based power. (CL2). PP response: The Indicator No. 2 "Access to affordable and clean energy services" was modified with quantitative description. Also, the accessibility of affordable/clean power comparing to the fossil-fuel-based power was indicated in GS MR. DOE conclusion: It was confirmed that the project commenced the operation before the starting date of this monitoring period and its continuous operation contributes local people to more easily access to affordable and clean energy services than the past. It was also confirmed that accessibility of affordable/clean power comparing to the fossil-fuel-based power was added in the GS-MR and was considered reasonable. Therefore, CL was closed. (CAR3) Finding related to quantitative employment and income generation: As for “Quantitative employment and income generation” (indicator No. 3), it was confirmed through the interview with the PO that income generation for the

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employees has been improved from about 2,000,000 VND/month to 3,500,000 VND/month. So, it was requested to indicate the results of the monitored parameters in the GS-MR, by using quantitative values, and the PO was requested to submit any relevant evidential documents to the DOE for cross-check. In addition, it was requested to indicate quantitative information of the PO’s financial support to the local economy and the minority group in the MR accordingly (CAR3). PP response: The Indicator No. 3 "Quantitative employment and income generation" was modified in the revised GS-MR with quantitative description. The quantitative information of the PO's financial support to the local economy and the minority groups was also indicated in it. DOE conclusion: It was confirmed through the submitted receipt that 150 million VND has been paid to the chairman of the commune for the construction of new public office of the local people's committee. It was explained by the PP that the financial support was paid to the local authority during this monitoring period, on a voluntary basis, and the receipt for the payment was not issued by the local authority at that time. However, to demonstrate proof for the voluntary financial support, the local authority issued the receipt on 09/07/2014. In addition, the event was additionally described in the MR in a quantitative way, therefore, CAR was closed. (CL3) Finding related to Air quality: As for “Air quality” (indicator No. 4), it was requested to clarify the following monitoring points (CL3), so that the DOE can determine whether a location of each monitoring point is considered reasonable for appropriate monitoring activities:

- “Production area” of Nam Hong 1 - “Production zone” of Nam Hong 2 - “Living area of workers” of Nam Hong 1 - “Living area of workers” of Nam Hong 2

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PP response: Information about the emission sources (monitoring point) regarding air examination was added in the revised GS-MR. Further information about each monitoring point of air examination has been added in the GS-MR. DOE conclusion: It was confirmed that the monitoring points of air quality examination were clarified in the revised GS-MR, and it was verified that the monitoring of the points have been specified properly for future periodical monitoring activities and their effectiveness. Eventually, the verification team considered them reasonable, and CL was closed. (CL4) Finding related to water quality and quantity: As for “Water quality and quantity” (indicator No. 5), it was requested to clarify the following monitoring points (CL4), so that the DOE can determine whether the location of each monitoring point is considered reasonable for appropriate monitoring activities:

- Location 1, 2, 3, and 4 It was also requested to clarify the results of the monitored parameter of minimum flow in the GS-MR, by using quantitative values. PP response: Information about the emission sources (monitoring point) of water quality examination was added in the revised GS-MR. DOE conclusion: It was confirmed that the monitoring points of water quality examination were clarified in the revised GS-MR. Also, explanation about the monitored parameter of "Minimum flow" was added in the revised GS-MR in detail and in a way that is visible. Eventually, the verification team considered them reasonable, and CL was closed. (CL5) Finding related to soil condition:

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As for “Soil condition” (indicator No. 6), it was requested to clarify the results of the monitored parameter of compensation in the GS-MR, by using quantitative values (CL5). The relevant compensation plan and the compensation receipt are submitted as evidential documents. In addition, it is further required to specify the approved compensation plan and the results of the compensation payment in the GS-MR, in a quantitative way. PP response: The Indicator No. 6 "Soil Condition" was modified in the revised GS-MR with quantitative description regarding the compensation. In addition, the approved compensation plan and the results of the compensation payment were specified in the revised GS-MR as well. DOE conclusion: It was confirmed that detailed description about the approved compensation plan and the results of the compensation payment were added in the revised GS-MR. Eventually, the verification team considered them reasonable and CL was closed.

(CAR 1, CL6) Finding related to biodiversity/fish passage: Through the desk review, it was found that there is no description about “Biodiversity/Fish passage” (indicator No. 7) in the GS-MR (version 01). Thus, CAR was raised (CAR1), and it was requested to add it in the GS-MR accordingly. In addition to “Biodiversity,” it was confirmed through interviews with the PO that it has provided financial support to afforestation and, therefore, it was requested to clarify it in the GS-MR, by using quantitative values. Also, it was requested to clarify the actual implementation of the dam site for demonstration for the structure of fish migration-friendly design and the actual implementation (CL6). PP response: On-site photos of the dam site detailing both the dam gate and the spillway were submitted to the DOE. In addition, the explanation letter of the construction contractor regarding the structure for fish migration was submitted to the DOE.

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Dam and sand discharge gate of Nam Hong 1 plant

Dam and sand discharge gate of Nam Hong 2 plant

DOE conclusion: According to the explanation letter by the construction contractor, the monitored parameter (Fish passage) was confirmed as follows: "The dams of Nam Hong 1 and Nam Hong 2 were constructed in compliance with the design made in July 2009. Accordingly, the dams are designed with spillways of 107 m long for Nam Hong 1 and 73.44 m long for Nam Hong 2. Thanks to the spillways plus daily water regulation regime of the reservoirs, water from reservoirs is discharged to downstream, which form fish passage in the rainy season." "Furthermore, the dams are also designed with sand discharge gates, which daily allow water to pass through. The gates are closed and opened with a valve system, which is not manually operated and leaves a gap at the bottom for fish passage." In addition, other supplemental evidences (photos of the dam and the sand discharge gates) were provided for verifying the actual implementation, and with satisfactory results. Therefore, it was confirmed that the actual construction is in

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compliance with the project design, ensuring the requirements on conservation of sound ecological system and fish migration. Also, the defined mitigation measure of the other monitored parameter (cultivation of plants and afforestation for affected areas) was verified through alternatives means (in other words, financing to support afforestation), with satisfactory result. Therefore, CL was closed.

5 TECHNICAL REVIEW The technical review was conducted on 06/08/2014, according to the submission of a draft verification report prepared by the verification team. The verification report was approved by the technical reviewer after the question and answer period regarding the project implementation, accuracy, and ER calculation.

6 CONCLUSION Considering the results of the on-site visit above, it was concluded that the initial GS-MR (version 01, dated 21/04/2014) was revised successfully and corrected appropriately to the revised GS-MR (version 2.1, dated 11/08/2014), reflecting the CLs raised by the DOE.

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7 VERIFICATION OPINION Deloitte-TECO was contracted by Vietnam Carbon Assets Ltd (one of the PPs) to carry out the GS periodic verification of the registered CDM project, “Nam Hong Hydropower Project” (GS Project ID: GS961 and CDM reference number: 5164), and to verify GHG ERs and the relevant information reported by the PP for the period from 01/07/2012 to 30/04/2014 (first and last days included). After completing a desk review and an on-site assessment, the verification team has come to the following conclusions. The opinion of the verification team relates only to the project’s GHG emissions and resulting GHG ERs stated in the GS-MR as they are related to the validity and registered project baseline and its associated reference documents. The PP is ultimately responsible for preparing the GHG emissions data and the GS-related information, and reporting on the basis set forth in the MP. The development and maintenance of records and reporting procedures in accordance with the plan, including the calculation and determination of GHG ERs, are also the responsibilities of the PP. The verification team fulfills the vital role of performing an independent assessment and expressing an unbiased opinion regarding GHG ERs during the monitoring period. The verification team carried out its assessment duties in light of the requirements defined under the Kyoto Protocol and Marrakech Accord, as well as those defined by the CDM EB. Furthermore, the verification team confirms that all of the elements related to the MP according to the GS Passport and GS requirements are fulfilled. Our approach was risk based, drawing on an understanding of the risks associated with reporting GHG emissions data and the information related to the GS-MR. The inspection performed by the verification team includes an assessment of evidence related to GHG amounts and disclosures related to the project’s GHG ERs for the period under review. Deloitte-TECO planned and performed this verification with the objective of obtaining the information it considered necessary to provide sufficient evidence that would provide reasonable assurance that the amount of GHG ERs for the period, prepared on the basis of the MP, was accurate. As required by the GS, the verification team confirms that the key sustainable development indicators did not change since the time of validation. In our opinion, the GHG ERs for this project for the period from 01/07/2012 to 30/04/2014 (first and last days included), as reported in the revised GS-MR (version 2.1, dated 11/08/2014), prepared on the basis of the MP, are fairly and accurately stated. The GHG ERs were calculated correctly in the revised GS-

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MR (version 02) and were in compliance with the GS Passport (version 2.3, dated 11/06/2012), the registered PDD (version 2.3, dated 21/07/2011), and the revised PDD (version 2.4, dated 05/06/2014). After cross-checking the relevant evidential documents with data/values in the revised GS-MR (version 02), Deloitte-TECO confirmed that the project has resulted in ERs of 29,992 tCO2e for the period from 01/07/2012 to 30/04/2014 (first and last days included).

03 September, 2014

Hiroshi Inanaga

Chief Executive Officer Deloitte Tohmatsu Evaluation and Certification Organization

Tokyo, Japan

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APPENDIX A: GS VERIFICATION CHECKLIST ID No.

Gold Standard verification requirements and toolkit DOE comment after on-site assessment （and/or summary of requests)

Date of draft concl.

Draft concl.

Summary of PP response DOE final comment Date of final concl.

Final concl.

T.4.1 Monitoring GHG Reductions and Sustainable Development 1 The Gold Standard can only issue premium quality labels

(for CERs, ERUs) or VERs if your project has realised emission reductions and has contributed to sustainable development. Both results have to be presented in monitoring reports which are verified by a DOE/AIE. - CDM or JI monitoring conform PDD - GS monitoring report conform to sustainability monitoring plan in Passport

Through the desk review, it was found that there is no description of indicator No. 7 "Biodiversity/Fish passage" in the MR (version 01). It is requested to add it in the revised MR accordingly.

28/04/2014 CAR1 The Indicator No. 7 "Biodiversity/Fish passage" has been added in the revised MR.

It was confirmed that the indicator No. 7 "Biodiversity/Fish passage" was added in the revised MR. Therefore, this check item was closed.

10/06/2014 OK

2 The GHG emission reductions resulting from your project have to be monitored according to the monitoring plan of the PDD; this will give the amount of credits to be issued. The sustainability impact of your project should be monitored according to the sustainability monitoring report. The monitoring report does not have a fixed format; however it must contain at a minimum: - Monitoring table from your PDD and Passport; - Data entry sheets of self-monitored parameters; - Remarks on the monitoring process used; - Current status of your parameters in the table; - Other data sources to substantiate your claims; - Scoring of your indicators compared to your baseline indicator situation.

It was confirmed that the GS MR contains the following: - Monitoring table from your PDD and Passport; - Data entry sheets of self-monitored parameters; - Remarks on the monitoring process used; - Current status of your parameters in the table; - Other data sources to substantiate your claims; However, it was found that there is no description of "Scoring of your indicators compared to your baseline indicator situation" in the MR (version 01). Therefore, clarification is requested, and it is necessary to provide the DOE with a revised MR, including its description.

16/05/2014 CL1 The description of "Scoring of your indicators compared to your baseline indicators situation" has been added in the revised MR.

It was confirmed that the description of "Scoring of your indicators compared to your baseline indicators situation" was added in the revised MR. Therefore, this check item was closed.

10/06/2014 OK

T.4.3 DOE Opens an Account in the Registry 3 To begin the verification process you must open an

account in the Registry if you have not already done so. The DOE has opened the account in the Registry on GS website.

28/04/2014 OK N/A N/A 28/04/2014 OK

T.4.4 Upload Verification Workplan 4 For each project being verified you (the DOE) must

prepare a workplan for the verification process and upload this onto the Registry. The workplan must contain the elements, which are stated in the toolkit.

The DOE has prepared a workplan for the GS verification process on 21/04/2014, and uploaded on GS Registry by the PP. A review result of the workplan was provided by GS technical expert on 23/04/2014, with a comment that all required elements for a DOE workplan have been covered in the workplan.

28/04/2014 OK N/A N/A 28/04/2014 OK

T.4.5 Start Verification Process 5 At the start of the verification either the DOE or AIE can,

after a completeness check, upload the carbon and sustainability monitoring reports onto the Registry together with the supporting documents. Alternatively the project participants can do this.

At the start of the verification, the PP uploaded the carbon and sustainability MRs on GS Registry together with the supporting documents.

28/04/2014 OK N/A N/A 28/04/2014 OK

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6 The verification will need to result in a verification report or reports. The verifier bases verification report(s) on the monitoring plans of the PDD and Passport and reports on: - Emission reductions; - Leakage; - Changes to the key sustainable development indicators; - Achievement and implementation of mitigation/compensation measures, according to the success indicators as established in the monitoring plan(s).

The aspects below, which are described in the CDM MR, will be verified according to the MP of the PDD: - Emission reductions; - Leakage; The aspects below, which are described in the GS MR, were verified according to the MP of the Passport: - Changes to the key sustainable development indicators; - Achievement and implementation of mitigation/compensation measures, according to the success indicators as established in the MP(s). As a result, it was considered reasonable, and therefore this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

7 These verification reports do not have to follow a fixed template; you can find a suggested outline for the verification reports in Gold Standard Annex K.

The GS verification report follows a suggested outline for the verification reports in Gold Standard Annex K. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

T.4.6 Verification Guidelines 8 The Gold Standard verification for CDM and JI projects

shall be conducted at the same time and in the same time periods as the verification under the regular CDM or JI project cycle.

The GS verification for CDM project was scheduled to be conducted at the same time and in the same time period as the verification under the regular CDM project cycle. This monitoring period covers from 01/07/2012 to 30/04/2014 (both days included) for both CDM and GS verification opportunities. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK

9 The DOE may verify selected samples of the monitoring plan only and will justify any such selection in the verification report(s). - Project Eligibility Criteria

General requirements and statement on preannouncement were confirmed at the validation stage. It was also verified through the site inspection and interviews with the PPs/local stakeholders that no further fact or additional information was found at the verification stage. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK


Eligible project activity location in terms of GS CDM host country was confirmed at the validation stage, and it was also confirmed that there is no postregistration changes on this matter at the verification stage. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK


Eligible project activity gases were confirmed at the validation stage, and it was also confirmed at the verification stage that the project activity involves the reduction of CO2 only for the crediting of emission reductions under the GS. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK


Eligible project type was confirmed at the validation stage, and it was also confirmed at the verification stage that the project type is categorized into Renewable Energy Supply (hydro) under the GS. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK


Eligible project scale was confirmed as a large scale at the validation stage, and it was also confirmed at the verification stage as defined in accordance with UNFCCC rules and as explained in Section T.1.2.a under the GS. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK

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Eligible methodologies for project activities were confirmed at the validation stage, and it was also confirmed at the verification stage that ACM0002 (version 12.1.0) and the relevant methodology tools defined are reasonable to be applied in accordance with UNFCCC rules and as explained in Section T.2.2 under the GS. Therefore, this check item was closed.

28/04/2014 OK N/A N/A 28/04/2014 OK


The information related to ODA support for project activities was confirmed at the validation stage. It was also verified through the site inspection and interviews with the PPs/local stakeholders that no further fact or additional information was found at the verification stage. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK


It was confirmed through interviews with the PPs that they are not considering submissions to VER streams. This check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK


It was confirmed through interviews with the PPs that they are not considering to involve in other certification or emissions trading schemes. This check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK


1) Project type eligibility: Hydro in Table C-1 of Guidance on project type eligibility (Annex C) "Project activities involving hydropower plants with an installed capacity of less than, or equal to 20 MWe shall be eligible for Gold Standard registration." It was confirmed through evidential documents and the site inspection that there is no gap between the validated project design and the project implementation regarding project type eligibility. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK


2) Special guidance for hydro projects in Table C-2 of Guidance on project type eligibility (Annex C) - Management domain - Hydropeaking - Reservoir management - Sediment management - Power plant design - Social impacts It was confirmed through evidential documents and the site inspection that no gap marked between the validated project design and the project implementation was observed for special guidance for hydro projects. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

19 The DOE may verify selected samples of the monitoring plan only and will justify any such selection in the verification report(s). - Additionality Assessment

The GS validation report clearly describes that the approved additionality tools, especially the emission factor tool and the version of tools were confirmed at the validation stage. It was also confirmed through the site inspection and interviews with the PPs/local stakeholders, and as a result, no deviations or concerns on additionality were observed at

16/05/2014 OK N/A N/A 16/05/2014 OK

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the verification stage. Therefore, this check item was closed.

20 The DOE may verify selected samples of the monitoring plan only and will justify any such selection in the verification report(s). - Sustainability Assessment

As for indicator No. 1 (Quality of employment), it is requested to clarify the results of the monitored parameter by using quantitative values. It was observed during the site inspection that the transformer station of Nam Hong 2 power plant was neither fenced nor locked. The area was easily accessible for the plant employees and there were no physical barriers to keep them out of such a hazardous area. The verification team was concerned about that situation, which may cause harm to them in terms of electric shock. Therefore, CAR is raised and it is requested to consider any countermeasures seriously. ---------- It was confirmed that the employees are checked up every six months at the medical centers for free using their health insurance, as a part of benefit package of welfare program that is explained by the PO. As for request for clarification about employee's income, it is further required to describe both the monitored parameters and baseline (official) data for comparison in the GS-MR, in order to maintain comparability. As for the hazardous situation of the transformer station, it is required to make a plan for countermeasures, more specific, in particular about a schedule of each countermeasure. (10/06/2014)

16/05/2014 CAR2 Indicator No. 1 "Quality of employment" has been modified with quantitative description. To secure safety, all employees of Nam Hong 2 hydropower plant have been informed about the danger of transformer, and required to stay at least 1.5 meters away from the transformer station. The PO has a plan to build the fence surrounding the transformer. See the document attached herewith. ---------- The monitored parameters and baseline data for comparison regarding the income generation have been further described in the GS-MR. More specific plan for controlling the hazardous situation of the transformer station has been submitted to DOE.

It was confirmed that the monitored parameters of employee's income are compatible and considered reasonable. Therefore, CL was closed. In addition, it was explained by the PO that it has conducted its emergency measures (safety training for the plant employees) and also has developed a plan for permanent measures (to build fixed fences around the transformer station) against the hazardous situation of the transformer station area. The plan was verified with reasonable results, and therefore, CAR was closed and FAR was raised instead. It is required that verifying DOE of the subsequent monitoring period will confirm actual implementation of the plan with the proposed countermeasures, for both Nam Hong 1 and Nam Hong 2 transformer stations.

17/07/2014 FAR


As for indicator No. 2 (Access to affordable and clean energy services), it is requested to clarify the results of the monitored parameter by using quantitative values. ---------- It was confirmed that the project commenced the operation before the starting date of this monitoring period and its continuous operation contributes local people to more easily access to affordable and clean energy services than the past. As for a description about average price of electricity, it is further required to indicate it in the GS-MR, in terms of accessibility of affordable/clean power comparing to that of fossil-fuel-based power. (10/06/2014)

16/05/2014 CL2 The Indicator No. 2 "Access to affordable and clean energy services" has been modified with quantitative description. ---------- The accessibility of affordable/clean power comparing to the fossil-fuel-based power has been indicated in GS MR.

It was confirmed that accessibility of affordable/clean power comparing to the fossil-fuel-based power was added in the GS-MR and was considered reasonable. Therefore, CL was closed.

09/07/2014 OK

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As for indicator No. 3 (Quantitative employment and income generation), it was confirmed through the interview with the PO that income generation for the employees has been improved from about 2,000,000 VND/month to 3,500,000 VND/month. So, it is requested to indicate the results of the monitored parameters in the MR by using quantitative values. The relevant evidential documents are necessary to be submitted to the DOE for cross-check. It is also requested to indicate quantitative information of the PO’s financial support to the local economy and the minority group in the MR accordingly. ---------- It was confirmed that the results of the monitored parameters were indicated in the MR in a quantitative way. It is further required to indicate the information of the PO's financial support to the local economy and the minority groups in a quantitative way. (10/06/2014)

16/05/2014 CAR3 The Indicator No. 3 "Quantitative employment and income generation" has been modified with quantitative description. The quantitative information of the PO's financial support to the local economy and the minority groups has been added in the MR. ---------- The information of the PO's financial support to the local economy and the minority groups has been indicated in a quantitative way in the GS-MR.

It was confirmed through the submitted receipt that 150 million VND has been paid to the chairman of the commune for the construction of new public office of the local people's committee. It was explained by the PP that the financial support was paid to the local authority during this monitoring period, on a voluntary basis, and the receipt for the payment was not issued by the local authority at that time. However, to demonstrate proof for the voluntary financial support, the local authority issued the receipt on 09/07/2014. In addition, the event was additionally described in the MR in a quantitative way, therefore, CAR was closed.

24/07/2014 OK


As for indicator No. 4 (Air quality), it is requested to clarify the monitoring points of the following so that the DOE can determine whether a location of each monitoring point is considered reasonable for appropriate monitoring activities: - Air quality examination (“Production area,” and “Living area of workers”) ---------- It is further required to indicate the specific information about each monitoring point of air examination. (10/06/2014)

16/05/2014 CL3 Further clarification regarding the emission sources (monitoring point) of "Production area" and "Living area of workers" has been added in the MR. ---------- Further information about each monitoring point of air examination has been added in the GS-MR.

It was confirmed that the monitoring points of air quality examination were clarified in the GS-MR, and it was verified that the monitoring points have been specified properly for future periodical monitoring activities and their effectiveness. Eventually, the verification team considered them reasonable and CL was closed.

24/07/2014 OK


As for indicator No. 5 (Water quality and quantity), it is requested to clarify the monitoring points of the following so that the DOE can determine whether a location of each monitoring point is considered reasonable for appropriate monitoring activities: - Water quality examination (Location 1, 2, 3, and 4) It is also requested to clarify the monitored parameter of “Minimum flow” by using quantitative values.

16/05/2014 CL4 Further clarification regarding the emission sources (monitoring point) of "Location 1, 2, 3, and 4 has been added in the MR.

It was confirmed that the monitoring points of water quality examination were clarified in the GS-MR. Also, explanation about the monitored parameter of "Minimum flow" was added in the GS-MR in details and in a way that is visible. Eventually, the verification team considered them reasonable and CL was closed.

09/07/2014 OK


As for indicator No. 6 (Soil condition), it is requested to clarify the results of the monitored parameter (compensation) by using quantitative values. The relevant compensation plan and the compensation receipt are necessary to be submitted as evidential documents. ---------- It is further required to specify the approved compensation plan and the results of the compensation payment in the GS-MR, in a quantitative way. (10/06/2014)

16/05/2014 CL5 The Indicator No. 6 "Soil Condition" has been modified with quantitative description regarding the compensation. ---------- The approved compensation plan and the results of the compensation payment have been further specified in the GS-MR, in a quantitative way.

It was confirmed that detailed description about the approved compensation plan and the results of the compensation payment was added in the GS-MR. Eventually, the verification team considered them reasonable and CL was closed.

09/07/2014 OK

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As for indicator No. 7 (Biodiversity/Fish passage), it is requested to clarify the results of the monitored parameter (financing to support afforestation) by using quantitative values. Regarding "Fish passage," it is requested to provide photos of the dam site for an easy demonstration of the implementation. It is also requested that the structure of fish migration-friendly design and the actual implementation are explained by the dam designer, the constructor, and/or the local authority.

16/05/2014 CL6 On-site photos of the dam site detailing both the dam gate and the spillway are submitted to DOE. The explanation letter of the construction contractor regarding the structure for fish migration has been submitted to DOE.

According to the explanation letter by the construction contractor, the monitored parameter (Fish passage) was confirmed as follows: "The dams of Nam Hong 1 and Nam Hong 2 were constructed in compliance with the design made in July 2009. Accordingly, the dams are designed with spillways of 107 m long for Nam Hong 1 and 73.44 m long for Nam Hong 2. Thanks to the spillways plus daily water regulation regime of the reservoirs, water from reservoirs is discharged to downstream, which form fish passage in the rainy season." "Furthermore, the dams are also designed with sand discharge gates, which daily allow water to pass through. The gates are closed and opened with a valve system, which is not manually operated and leaves a gap at the bottom for fish passage." In addition, other supplemental evidences (photos of the dam and the sand discharge gates) were provided for verifying the actual implementation, and with satisfactory results. Therefore, it was confirmed that the actual construction is in compliance with the project design, ensuring the requirements on conservation of sound ecological system and fish migration. Also, the defined mitigation measure of the other monitored parameter (cultivation of plants and afforestation for affected areas) was verified through the alternatives (in other words, financing to support afforestation), with satisfactory result. Therefore, CL was closed.

24/07/2014 OK

27 It must be kept in mind that a validation can only tell something about a project’s likelihood to comply with requirements and to succeed at a certain point in time and under given circumstances. Therefore the validation report(s) will be one of the inputs used for verification of the emission reductions, and:

Any changes that have occurred since validation and that have an impact on the claimed ERs were not observed in this monitoring period. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

28 It must be kept in mind that a validation can only tell something about a project’s likelihood to comply with requirements and to succeed at a certain point in time and under given circumstances. Therefore the validation report(s) will be one of the inputs used for verification of

It was not confirmed at the site inspection that any changes occurred that may have an impact on the GS qualification of the project, particularly with reference to any potential changes in key parameters leading to an overall positive impact on sustainable development of the project. This

16/05/2014 OK N/A N/A 16/05/2014 OK

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the emission reductions, and: check item was closed. T.4.7 DOE Site Visit 29 Under the Gold Standard a site visit is mandatory in one

of the first two years after the start of the crediting period, and by default once every three years after that, unless you (the DOE) provide a convincing case for less frequent visits as part of the verification plan.

This time, the site visit was conducted within the first two years after the start of the crediting period. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

30 During the site visit you (the DOE) have to visit the location of the project activity, which includes a visit to the installation and interviews with responsible personnel during verification.

During the site visit, the DOE visited the location of the project activity, which includes a visit to the installation and interviews with responsible personnel during verification. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

31 You (the DOE) have to verify the monitoring of the sustainable development indicators, which must be submitted at each site visit. This is to better assess the impact of the project and the scoring of the Sustainable development indicators.

The DOE verified the monitoring of the sustainable development indicators, which must be submitted at each site visit. This is to better assess the impact of the project and the scoring of the sustainable development indicators. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

32 If you are verifying a CDM or JI project the Gold Standard site visit can coincide with the CDM/JI site visit.

This time, the DOE was verifying the CDM project as well, and the GS site visit was conducted with the CDM site visit at the same time. Therefore, this check item was closed.

16/05/2014 OK N/A N/A 16/05/2014 OK

Others 33 Remaining issues (FARs) from GS validation and/or the

previous GS verification As for "FAR01," it was confirmed during the on-site plant tour and through the relevant evidential documents (e.g., joint balance sheet and PPA) that the registered hydropower project consists of the two hydropower stations (Nam Hong 1 and Nam Hong 2) and all of the installed equipment are in line with the substantive design of equipment at the design stage. As for "FAR#1," the installed electricity meters (CTC, CTP, and CT-TD) were checked at the site inspection and through the certificate of calibration. As a result, the calibration of those measuring equipments was verified successfully; however, the MP was revised in terms of the actual number of installed power meters. The details are discussed in other part of this checklist. As for "FAR#2," it was confirmed that the dam structure for maintaining the minimum flow as determined by the EIA was confirmed through field interviews with the PO and the actual implementation, and the explanation of the construction constructor supplements to conclude that the installed valve structure of sand discharge gates does not allow the gates to be closed manually. The design of the installed valve system leaves a gap at the bottom of the dates for allowing water (and fishes) pass through. The details are discussed in other part of this checklist. Therefore, these FARs were closed.

24/07/2014 OK N/A N/A 24/07/2014 OK

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34 Any postregistration changes (including design changes)? It was confirmed that there are some postregistration changes, which do not require prior approval under the CDM standards, found during the site visit. Those were organized under the CDM rules, and the revised PDD was submitted to the CDM EB in accordance with the CDM standards. Therefore, this CL was closed.

24/07/2014 OK N/A N/A 24/07/2014 OK

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APPENDIX B: REFERENCES No. Title Issue date

(dd/mm/yyyy) 1 CDM monitoring report for GSC (Version 01) 21/04/2014 2 CDM monitoring report for issuance request (Version 02) 05/06/2014 3 ER calculation spreadsheet for initial monitoring report (Version 1) 21/04/2014 4 ER calculation spreadsheet for issuance request (Version 2) 09/05/2014 5 Registered CDM PDD (Version 2.3) 21/07/2011 6 CDM Validation report issued by CEC (Report No. 11011093) 26/08/2011 7 Project viewpage of Nam Hong Hydropower Project (UNFCCC website) N/A 8 Power purchase agreement (51-2010/EVNNPC-B9) 12/2010 9 Construction contract for auxiliary item 28/10/2010 10 Trial operation record for starting commercial operation of Nam Hong 2 hydropower plant 19/07/2012 11 Trial operation record for starting commercial operation of Nam Hong 1 hydropower plant 05/07/2013 12 Transformer checking protocol 28/08/2013 13 CDM monitoring manual (Version 01) 12/12/2011 14 Meter reading records (monitored data) 07/2012-03/2014 15 Joint balance sheet 07/2012-04/2014 16 Electricity sales invoice 07/2012-04/2014 17 Reservoir surface area report 25/12/2013 18 Commercial operation license of the hydropower plants 03/11/2009 19 DLVN39:2004 (Alternating current static watt-hour meters - Methods and means of verification) N/A 20 Minutes of CDM training meeting 18/07/2012 21 Minutes of internation CDM training meeting 03/07/2013 22 QCVN 08:2008/BTNMT (B1) (National technical regulation on surface water quality) N/A 23 Circular No.32-2010-BCT (Regulations on power distribution system) N/A 24 Certificate of verification for CTC (SN 97539341) 03/07/2012 25 Certificate of verification for CTP (SN 97815878) 03/07/2012 26 Business license of meter calibration entity (for CTC, CTP, and CT-TD) 13/01/2012 27 Internal audit report (2012 and 2013) 27/12/2012

24/12/2013 28 Management review report 31/12/2012

31/12/2013 29 Decision No 65/2002/QD-BKHCNMT2 (The list of measuring devices subject to expertise and

expertise registration) 19/08/2002

30 Transformer acceptance protocol 03/11/2013 31 Reservoir operating procedure and the approval (2799/QD-UBND) 19/10/2009 32 Operator's licenses N/A 34 ACM0002 (Version 12.1.0) N/A 35 Tool to calculate the emission factor for an electricity system (Version 02.1.0) N/A 36 Tool for the demonstration and assessment of additionality (Version 05.2) N/A 37 A layout map of the project site N/A 38 power system diagram (drawing at the onsite ) N/A 39 Minutes of agreement on transmission line losses between the PO and EVN (an appendix of

PPA) December 2010

40 Daily operation logbook (Nam Hong 1) 05/07/2013 41 Daily operation logbook (Nam Hong 2) 28/08/2013 42 Total investment report (as amended) by the PO November 2010 43 GS monitoring report for GSC (Version 01) 21/04/2014 44 GS monitoring report for issuance request (Version 2.1) 11/08/2014 45 GS Passport (Version 2.3) 11/06/2012 46 GS validation report (CEC, No.11011093, Version 3) 03/07/2012 47 Project viewpage of Nam Hong Hydropower Project (GS Registry public view) N/A 48 8-week registration review period feedback form (GS961) N/A 49 Gold Standard Requirements Ver2.1 N/A 50 Gold Standard Toolkit Ver2.1 N/A 51 Annex C Guidance on Project Type Eligibility Ver2.1 N/A 52 Annex I Guidance on Sustainability Assessment Ver2.1 N/A 53 Annex K Outline of the Validation and Verification Report Ver2.1 N/A 54 EIA report with English translation (submitted to GSF on 03/07/2012) July 2009 55 General description of the approved FSR July 2009 56 Equipment purchase contract with specifications (No.01/NH-TH) 25/02/2011 57 QCVN 05:2009/BTNMT (National technical regulation on ambient air quality) 07/10/2009 58 QCVN 26:2010/BTNMT (National Technical Regulation on Noise) N/A

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59 Organization chart N/A 60 Decision No.2206 (Approval for the plan of compensation cost for Nam Hong 2 project) 19/11/2010 61 Decision No.3081 (Approval for the plan of compensation cost for Nam Hong 1 project) 31/12/2009 62 A sample of compensation receipt (the payee is Lo Van Dung) 09/01/2010 63 Payroll records As of December

2013 64 A sample of labour contract N/A 65 List of operators N/A 66 Statistics on income per capita in the local area of project 24/02/2014 67 Air and water quality examination 01/2013 and

12/2013 68 Decision No.3733-2002/QD-BYT (Promulgating 21 labor hygiene standards, 05 principles and

07 labor hygiene measurements) N/A

69 Certificate of calibration for CT-TD (SN 12177965) N/A 70 Report on considering afforestation plan to offset loss of forest land which is associated with

Nam Hong Hydropower Project (23/NH-BCTD) 10/04/2014

71 Receipt of financial support to the local authorities (the construction of People's committee office of Chieng Cong commune)

09/07/2014

72 Safety plan for transformer station area (No.251/CV-NH) 14/07/2014 73 Photos of field work relating to minimum flow measurement N/A 74 A clarification letter on the use of power meter to measure electricity import from 35kV grid,

Ching An by Nam Hong hydropower project (91/CV-EVNPC, issued by Northern Power Corporation Son La Power Company Muong La Power Branch)

26/05/2014

75 Information about GS Registry concerning registration date of the project N/A 76 Revised CDM monitoring manual (Version 02) 05/06/2014 77 A clarification letter on fish passage, issued by the construction contractor of Nam Hong

Hydropower Project (45/CV-KC) 14/05/2014

78 Verification report on total investment cost (issued by Power Engineering Consulting and Trading Joint Stock Company 1)

02/11/2010

79 Settlement of accounts for compensation payment as of 15/07/2014 2011, 2012, 2013, and 2014

80 Circular No.19/2013/TT-BCT (the Ministry of Industry and Trade providing regulations on the electricity sale price and guidance for the implementation)

31/07/2013

81 Photos of the electricity monitoring meter CT-TD N/A 82 Minutes of meter installation(CT-TD) 13/06/2013 83 Photos (powerhouse, turbine/generator and transformer station of Nam Hong 1, and

dams/sand discharge gates of both Nam Hong 1 & 2) 25/05/2014

84 Revised CDM PDD (Version 2.4) 05/06/2014

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APPENDIX C: ENGAGEMENT QUALITY ASSURANCE REVIEW SYSTEM

Step Reviewer Objectives/Responsibilities Information (Input) Reports (Output) Details/Comments 1 GHG Audit

Director Review the validation process from an independent standpoint to confirm that it was effective, efficient, and that every step was in conformance with the “Regulations for CDM Audits” and “Operational Management Procedure CDM (Validation/Verification).”

PDD (MP) Audit plan document Validation/Verification report DR DR report VVM/VVS

Completion of requested corrections Confirmation of evidence for VVM/VVS Abstract of Audit outcome Witnesses

Checkmarks Add comments to the abstract

When the GHG Audit Director does not have the necessary expertise, include a technical review.

Perform a technical review of additionality, baseline methodology, and monitoring methodology.

The latest approved methodologies PDD (MP) Request for review VVM/VVS

Assessment of applied methodologies Confirmation of accuracy and reliability of data and equations.

Comments on materiality and uncertainty

2 Engagement Quality Assurance Reviewer

Review how appropriate each step of the process was, from the order for the CDM project to registration/issuance request to EB, based on “CDM Audit Manual” and related procedures.

Statement of procedures Abstract of audit outcome Witness

Engagement Quality Assurance statement for operational procedures

Note concerns in comment field

3 Judging Committee

Perform an Engagement Quality Assurance Review to assess CDM project registration submissions and/or respond to requests for a review from CDM EB, in order to render a fair and objective decision based on steps (1) and (2).

PDD(MP) Validation/Verification report DR

Minutes of Judging Committee

Add comments to the minutes

4 Chief Executive Officer

Express the final opinion, based on (1),(2), and (3),

Engagement Quality Assurance statement for operational procedures

Opinion (Validation/Verification Report)

Need to comment if it is a negative opinion

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APPENDIX D: QUALIFICATIONS Name: TANABE, Koichiro Position: 1. Lead Auditor

2. Auditor 3. Technical Expert

Fields of Expertise:

Sectoral Scopes (SS) Technical Areas (TA)

SS 1: Energy industries (renewable/non-renewable sources)

TA 1.1: Thermal energy generation from fossil fuels and biomass including thermal electricity from solar (COMPLEX)

TA 1.2: Energy generation from renewable energy sources

SS 2: Energy distribution TA 2.1: Electricity distribution TA 2.2: Heat distribution

SS 3: Energy demand TA 3.1: Energy demand

SS 4: Manufacturing industries

TA 4.1: Cement sector (COMPLEX) TA 4.2: Aluminium (COMPLEX) TA 4.3: Iron and steel (COMPLEX) TA 4.4: Refinery (COMPLEX)

SS 5: Chemical industry TA 5.1: Chemical process industries (COMPLEX) SS 6: Construction TA 6.1: Construction SS 7: Transport TA 7.1: Transport

SS 8: Mining/mineral production

TA 8.1: Mining and mineral processes, excluding those included in TA 8.2 below

TA 8.2: Oil and gas industry, coal mine methane recovery and use (COMPLEX)

SS 9: Metal production TA 9.1: Metal production

SS 10: Fugitive emissions from fuels (solid, oil and gas)



SS 11: Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride

TA 11.1: Chemical process industries (COMPLEX)

TA 11.2: GHG capture and destruction

SS 12: Solvents use TA 12.1: Chemical process industries (COMPLEX) SS 13: Waste handling and disposal

TA 13.1: Waste handling and disposal TA 13.2: Animal waste management

SS 14: Afforestation and reforestation

TA 14.1: Forestry

SS 15: Agriculture TA 15.1: Agriculture TA 15.2: Animal waste management

Approved by:

INANAGA, Hiroshi, Chief Executive Officer of Deloitte-TECO

NOTE: In accordance with Deloitte-TECO’s “Auditor’s List with Technical Areas of Sectoral Scopes”

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Name: TADA, Kunio Position: 1. Lead Auditor

2. Auditor 3. Technical Expert

Fields of Expertise:

Sectoral Scopes (SS) Technical Areas (TA)

SS 1: Energy industries (renewable/non-renewable sources)

TA 1.1: Thermal energy generation from fossil fuels and biomass including thermal electricity from solar (COMPLEX)

TA 1.2: Energy generation from renewable energy sources

SS 2: Energy distribution TA 2.1: Electricity distribution TA 2.2: Heat distribution

SS 3: Energy demand TA 3.1: Energy demand

SS 4: Manufacturing industries

TA 4.1: Cement sector (COMPLEX) TA 4.2: Aluminum (COMPLEX) TA 4.3: Iron and steel (COMPLEX) TA 4.4: Refinery (COMPLEX)

SS 5: Chemical industry TA 5.1: Chemical process industries (COMPLEX) SS 6: Construction TA 6.1: Construction SS 7: Transport TA 7.1: Transport

SS 8: Mining/mineral production



SS 9: Metal production TA 9.1: Metal production

SS 10: Fugitive emissions from fuels (solid, oil and gas)



SS 11: Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride

TA 11.1: Chemical process industries (COMPLEX)

TA 11.2: GHG capture and destruction

SS 12: Solvents use TA 12.1: Chemical process industries (COMPLEX) SS 13: Waste handling and disposal

TA 13.1: Waste handling and disposal TA 13.2: Animal waste management

SS 14: Afforestation and reforestation

TA 14.1: Forestry

SS 15: Agriculture TA 15.1: Agriculture TA 15.2: Animal waste management

Approved by:

INANAGA, Hiroshi, Chief Executive Officer of Deloitte-TECO

NOTE: In accordance with Deloitte-TECO’s “Auditor’s List with Technical Areas of Sectoral Scopes”

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Documents

Nam Hong Hydropower Project (GS project ID: GS961) (UN