Over $15 billion available for Vietnam’s green transition

Leaders from Vietnam and the International Partners Group, including the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway, and Denmark, agreed on the Just Energy Transition Partnership (JETP) on December 14.

The partnership will support Vietnam's ambitious net-zero 2050 goal, accelerate the peaking of its greenhouse gas emissions, and transition from fossil fuels to clean energy.

A new urban area in Ho Chi Minh City. Photo: Le Toan

The partnership will support Vietnam in working towards several ambitious new targets, including bringing forward the projected peaking date for all greenhouse gas emissions in Vietnam from 2035 to 2030, reducing peak annual power sector emissions by up to 30 per cent, from 240 megatons to 170 megatons, and bringing forward the peaking date by five years to 2030, limiting Vietnam’s peak coal capacity to 30.2GW down from a current planning figure of 37GW, and accelerating the adoption of renewables so that renewable energy accounts for at least 47 per cent of electricity generation by 2030, up from the current planned generation share of 36 per cent.

The successful delivery of these ambitious targets will save around 500 megatons (0.5 billion tonnes) of emissions by 2035.

Initial contributions to the Vietnam JETP include $7.75 billion in pledges from the IPG together with the Asian Development Bank and the International Finance Corporation.

This is supported by a commitment to work to mobilise and facilitate a matching $7.75 billion in private investment from an initial set of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero, including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie Group, Mizuho Financial Group, MUFG, Prudential PLC, Shinhan Financial Group, SMBC Group, and Standard Chartered.

Over the next 12 months, Vietnam will work with the support of partner countries to develop and adopt the Vietnam JETP Resource Mobilisation Plan, which will enable JETP funding and strategy implementation.

Vietnam is the third country to launch a JETP, following the successful launch of the South Africa JETP at COP26 and the Indonesia JETP at this year's G20 Leaders' summit. As a rapidly growing economy, Vietnam’s JETP will demonstrate that economic growth can be decoupled from fossil fuel energy consumption.

The Vietnam JETP builds on the UK-launched G7 Partnership for Global Infrastructure and Investment, which aims to narrow the infrastructure investment gap in developing countries. G7 leaders agreed in June 2022 to move forward in negotiations with several countries on JETPs.

Ensuring the transition away from fossil fuels is ‘just’ lies at the centre of the JETP. A just transition will not only help Vietnam to its meet climate goals but also secure a resilient and prosperous future for its people, reducing the impacts of pollution and supporting economic growth and new jobs. It is vital that the whole civil society is involved in the green transition at all stages, and no one is left behind.

UK Prime Minister Rishi Sunak said, "Vietnam is a dynamic, emerging economy at the heart of Southeast Asia. The investment we are making today means the country can cut its emissions while simultaneously creating new jobs and growth."

President of the European Commission Ursula von der Leyen said, "I am delighted that we have sealed a new Just Energy Transition Partnership with Vietnam during this important week for EU-ASEAN relations. With investments from international partners, Vietnam can boost renewable energy and enhance its energy security and autonomy."

"We will help Vietnam to start reducing its greenhouse gas emissions five years earlier than planned and dramatically reduce its coal power use. This partnership will help Vietnam to build a 21st-century power sector, energising its economic growth and bringing environmental and health benefits to its citizens," she added.

Canada’s Prime Minister Justin Trudeau said, "Just Energy Transition Partnerships are a model for how contributors can work together with partners like Vietnam to take action towards cleaner energy sources. Canada will continue to be a committed partner for the clean energy transition and coal phase-out in Vietnam, which is in all our best interest for an inclusive, clean energy future in the Indo-Pacific region."

French President Emmanuel Macron said that France and the European Union were pursuing their strong commitment to climate change mitigation by supporting the acceleration of a just energy transition in Vietnam.

"France’s contribution, which is part of long-standing bilateral cooperation, will support energy planning, capacity building and grid development in parallel with renewable energy development. Our collective contribution must support Vietnam’s commitment to a sustainable development trajectory," President Macron said.

German Chancellor Olaf Scholz pointed out that JETP with Vietnam would support ambitious climate targets and a substantial increase of renewable energies by 2030 as a joint effort to keep 1.5 °C in reach.

Japan’s Prime Minister Fumio Kishida Fumio said, "Japan has been supporting Vietnam‘s decarbonisation through renewable energy-related projects and welcomes Vietnam‘s ambition further to accelerate just energy transition towards net zero by 2050."

"Japan is proud to be a member of the Just Energy Transition Partnership, which will promote support for low emission and climate-resilient development in Vietnam, in coordination with partner countries, and with further private sector engagement," he added.

Norway’s Prime Minister Jonas Gahr Støre said: "Norway is proud to be part of the Just Energy Transition Partnership and support Viet Nam’s effort to speed up the energy transition. We believe this can mobilise much-needed private capital to accelerate the ambitious transition from coal to renewable energy."

President of the United States Joe Biden commented, "Today, Vietnam has demonstrated leadership in charting an ambitious clean energy transition that will deliver long-term energy security. The United States is proud to be a partner in this effort. Vietnam’s historic commitment will catalyse investment and economic growth and create tremendous opportunity for the Vietnamese while advancing the fight against the global climate crisis."

Successful delivery of these ambitious targets will result in a cumulative reduction of around 200 megatons of greenhouse gas emissions by 2030 and a further 300 megatons by 2035.

European corporations take part in growing Vietnam's green economy Regional business executives of leading European corporations in various sectors met with Prime Minister Pham Minh Chinh at the Green Economy Forum and Exhibition (GEFE) 2022 on November 28 in Ho Chi Minh City.