Japan to increase financial assistance for Vietnam's energy transition

At the fifth meeting of the Vietnam-Japan Joint Committee on Industry, Trade, and Energy Cooperation on August 24, Minister Yasutoshi Nishimura stated that Japan will provide financial and technical support for Vietnam's energy transformation efforts through the Asia Energy Transformation Initiative (AETI).

In accordance with the commitment made in May 2021, Japan International Cooperation Agency has offered a loan of up to $25 million for the development of wind energy projects in Quang Tri. Photo: Electrical Construction I

In Tokyo, Japan's Ministry of Economy, Trade and Industry (METI) and the Vietnamese Ministry of Industry and Trade inked an MoU on cooperation in the energy transition in order to concretise Vietnam's carbon neutralisation strategy and assert Japan's assistance activities within the scope of the AETI for Vietnam's energy transformation.

For the first time, Yasutoshi, who was appointed by the Japanese government to the role of METI Minister following the August 10 reshuffle, presided over the Vietnam-Japan Joint Committee meeting.

The concepts Asia-Japan Invests in Future Initiatives and the AETI convey Japan's incentive to spend in the region's future, aimed at letting Asia become a global growth hub.

Appointed in October of last year, Japanese Prime Minister Fumio Kishida has pledged to enhance collaboration with ASEAN in all areas. During his time as foreign minister under the leadership of Prime Minister Shinzo Abe, Kishida was also a staunch advocate for ASEAN's major position.

The Straits Times reported in October 2021 that the Japanese government had invested $10 billion in the AETI to assist ASEAN, Central Asia, and the Middle East in reducing their reliance on fossil fuels.

Vietnam is committed to reaching net-zero emissions by the year 2050. To attain this objective, the government is progressively lowering major projects that cause environmental pollution while simultaneously proposing investment capital alternatives to raise the share of renewable energy and decrease emissions.

Kunihiko Hirabayashi, general secretary of the Asian-Japan Centre (AJC), said that Japan would share its superior technologies with Vietnamese enterprises. AJC is encouraging Japan's sustainable foreign direct investment flows, notably in Vietnam.

Shigetoshi Aoyama, executive vice president of the Japan External Trade Organization (JETRO), released its poll results with over 55 per cent of Japanese businesses plan to reinvest in Vietnam during the next two years, the highest figure among Southeast Asian nations.

According to the Ministry of Planning and Investment, Japan invested over $64 billion in 4,835 projects in Vietnam since 1988. Japan placed third amongst Vietnam's investment partners in 2021, reporting approximately $3.9 billion of registered investment capital, an increase of 64.6 per cent from the previous year.

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