IFC helps champion nation’s energy efficiency

This is thanks to technical and capital support from the Danish embassy in Vietnam and International Finance Corporation (IFC) during 2012-2015. Last week, the Ministry of Industry and Trade (MoIT) officially launched the energy efficiency campaign from 2012 to 2015 to create positive change in energy consumption within industrial sectors and state agencies.

The National Assembly ratified Law on Energy Saving and Efficiency governs all organisations, households and individuals in Vietnam. In October, 2012, through its Decision No. 1427/QD-TTg, the government ratified the revised national programme on energy efficiency for 2012 to 2015 designed to reduce between 5-8 per cent of national energy consumption during 2012-2015.

With $30 million in technical support from the Danish embassy in Vietnam and $100 million capital support from IFC for energy saving projects, the campaign will focus on improving the awareness and supporting key energy business consumers in their implementation of the Law on Energy Saving and Efficiency, which came into effect on January 1, 2011.

During the first phase from 2012-2013, the campaign will focus on cement, steel, paper and chemical production, the four most energy-hungry industries in the country. Specifically, under the campaign, Vietnamese firms which have energy efficiency financing programmes will have an opportunity to borrow capital from various financial institutions such as the  IFC at  $100 million, the Danish embassy $30 million,  Asian Development Bank $100 million, World Bank $70-$100 million and Japan International Cooperation Agency $50 million.

Simon Andrews, IFC manager for Vietnam, Cambodia, Laos and Thailand, said Vietnam’s many industrial enterprises had shown higher energy consumption rates per product unit than regional countries of up to 40 per cent. The campaign would be good opportunity for participating companies to improve energy efficiency awareness, especially the most energy hungry industries such as cement.  

“Apart from helping improve business’ awareness, IFC, through local financial institutions like Techcombank and VietinBank, will help accelerate the modernisation process in enterprises and move the local economy towards low-carbon growth path,” Andrews said.

According to the MoIT, there are about 1,200 key energy business consumers using up to 1,000 tonnes of oil equivalent per year. They account for around 70-80 per cent of total national energy consumption.