Mobilising more private resources for green growth

Private resources can push green growth, especially in renewable energy

The Central Institute for Economic Management (CIEM) in collaboration with the German Agency for International Cooperation (GIZ) held the conference "Enhancing private investment into green growth in the 2021-2030 period" yesterday (November 3, 2021) to analyse the role of private resources and propose solutions to further mobilise these resources for green growth.

Nguyen Hoa Cuong, the CIEM's deputy director-general said that enterprises are both subjects and partners in the troubles of global heating, environmental pollution, and natural resource degradation. Therefore, attracting private investors to participate in green growth will contribute to implementing the dual-task.

The role of the private sector in the economy was also fortified in Resolution No.10-NQ/TW from 2017 of the fifth plenum of 12^th Party Central Committee on developing the private economic sector towards an important driving force of the socialist-oriented market economy; as well as implement the National Strategy on the Fourth Industrial Revolution, Vietnam's Green Growth Strategy, and commitments to reduce greenhouse gas emissions.

Michael Krakowski, director and chief technical advisor of GIZ's Macroeconomic Reforms/Green Growth Programme in Vietnam emphasised that Vietnam has been developing rapidly, all the while suffering the negative impacts of climate change and environmental pollution. These troubles need the participation of various parties to timely find out effective measures to ensure sustainable development. Thereby, Vietnam should persistently propagate, support clean production on a large scale, and further invest in clean and renewable energy, GIZ's representative said.

Ho Cong Hoa, representative of the CIEM's research team, highlighted the necessity of consensus on building and completing a legal framework and policies towards encouraging private enterprises for green growth, associated with the implementation of social responsibility for the environment.

Hoa proposed to the government and authorities to study and approve public-private partnership (PPP) projects in collecting and treating wastewater and supplying clean water, with a value up to VND200 billion ($8.7 million) in rural areas.

"Besides this, it is necessary to enhance the responsibilities of polluters and raise the fees for environmental protection of wastewater, collection of waste fees in a transparent and fair manner," said Hoa, recommending that administrative reforms should be carried out to improve the investment and business climate, ensure fairness, and the confidence of the private sector.

The CIEM expert expressed his concern about issues such as the large proportion of power plants using coal, which are causing environmental pollution; the slow and difficult site clearances in constructions projects; and the shortages of capital and support of the state; as well as the lack of specific guidance in PPP negotiation and poor preparation and readiness of authorities in implementing green growth.

Other experts at the conference mentioned inadequacies and weaknesses in the formulation and implementation of solid waste treatment, unstable purchasing and selling policies, and electricity prices. They were said to affect the approach, investment, and deployment of private projects for green growth.

The CIEM research team also pointed out that, although there are mechanisms and policies to attract private sector participation for green growth, there are still numerous challenges for this sector, particularly in renewable energy and environmental services.

“The government should synchronously implement various solutions to create an attractive investment environment, improve the quality of the legal framework, and the performance of policy implementation to attract more private investment for green growth until 2030," suggested Hoa.