The European Union’s sustainability strategy alongside Vietnam

The Global Gateway is the key strategy supporting the EU’s efforts to tackle global challenges such as climate change or digital transition and foster resilience and competitiveness in partner countries. It supports hard infrastructure as well as the enabling environment in a comprehensive 360-degree approach.

Myriam Ferran, deputy director-general for International Partnerships, European Commission

In concrete terms, this means that European support to infrastructure is accompanied by technical and financial aid to the overall business ecosystem. This ranges from technical assistance to establish relevant regulatory frameworks and norms; strengthening relevant administrative or regulatory authorities; loans or guarantees to strengthen the business environment and entrepreneurial development in the region, and providing specialised technical vocational training to develop a qualified local workforce.

The Global Gateway is driven by EU values such as respecting the highest social, environmental, and governance standards, the rule of law, and human rights. It is also fully in line with the United Nations’ 2030 Agenda and its Sustainable Development Goals, as well as the Paris Agreement. Through the Global Gateway, the EU plans to mobilise up to €10 billion ($10.8 billion) in investments by 2027 in the ASEAN region.

The implementation of the strategy in Vietnam follows a Team Europe approach, meaning that the EU is mobilising the assistance of its member states, their financial and development institutions, and its private sector, working together to support Vietnam’s sustainable development with great impact around effectively transformative interventions.

The European Fund for Sustainable Development Plus (EFSD+) is one of the financing tools we use under the Global Gateway to mobilise public and private financing by offering a variety of risk-sharing instruments. The European Investment Bank is the largest implementation partner for the EFSD+ Guarantee, alongside other European development banks.

One of the key initiatives under the Global Gateway in Vietnam is the Just Energy Transition Partnership (JETP), which aims to mobilise €15.5 billion ($17.3 billion), from G7 and other countries to support Vietnam’s sustainable energy transition with an increased share of renewable energy while reducing reliance on fossil fuels.

The EU, alongside its member states and their financial and development institutions, will contribute over $3.1 billion in grants and loans to the partnership, significantly boosting Vietnam’s climate change mitigation efforts. In this context, there is a growing portfolio of investments that will be mobilised in the energy sector in Vietnam. At last year’s Global Gateway Forum in Brussels, Deputy Prime Minister Tran Hong Ha signed an MoU with the European Investment Bank that agreed a €500 million ($540.5 million) framework loan specifically dedicated to JETP implementation. The facility will provide financing for projects supporting decarbonisation and energy transition.

ENGAGEMENT IN VIETNAM

One significant project supported by the EU is the Bac Ai power project, a 1.2GW pumped storage hydroelectric power plant under construction in Ninh Thuan province, where the EU is supporting the first-ever pumped storage facility in Vietnam. I had the opportunity to visit the works in May 2024 and believe the potential impact of this project on the region and country is impressive.

In addition, the EU is also promoting reforms in the energy sector on renewable energy, energy efficiency, and transmission lines/grid through our Sustainable Energy Transition Programme to the tune of just over $150 million. This initiative directly supports the government of Vietnam in its reforms.

But the engagement of the EU in Vietnam goes far beyond the energy sector. Under the Global Gateway, significant importance is given to human resource development in Vietnam. As an example, a €40 million ($43.2 million) grant is funded by Germany and France to support the development of green and digital skills.

This funding can be used to support private sector companies in developing new training programmes and capacity-building initiatives in areas such as renewable energy, energy efficiency, and sustainable infrastructure. This is a concrete example of what Team Europe supports means: several member states joining forces to support a clear objective of a government policy.

As another striking example, the EU also stands ready to support Vietnam in adjusting to EU regulations which aim to encourage cleaner industrial production and protect forests thereby supporting climate change targets. Sustainable and legal supply chains for selected products and responsible corporate behaviour in companies’ operations are encouraged through EU deforestation regulations, the EU’s Carbon Border Adjustment Mechanism, and the corporate sustainability due diligence directive.

By focusing on these key areas, the initiatives not only encourage responsible resource management but also aim to empower local communities and create economic opportunities and jobs. This comprehensive approach seeks to balance economic growth with the need for environmental sustainability and social inclusion, ultimately contributing to a more resilient and equitable economy.

Vietnam has also set ambitious targets for the development of its transport sector, including the expansion of its railway network and the development of urban transport systems. The EU stands ready to support these efforts through the provision of technical assistance and expertise, that can lead to further investments in sustainable transport under the Global Gateway umbrella.

In addition, Vietnam’s ambitions towards the digital transition provide important opportunities for EU-Vietnam cooperation. The EU stands by Vietnam’s efforts to carry out its digital transformation, as well as to promote the development of AI and cybersecurity, high-speed internet, and mobile networks.

The EU’s partnership with Vietnam is deep, comprehensive, and longstanding, based on our mutual interests. Our initiatives and programmes reiterate the EU’s commitment to work with Vietnam in its journey towards sustainable and inclusive development.

EU nations ready to support ASEAN in green development As the European Union and ASEAN strengthen ties via a new biennial trade and investment programme, Vietnam is also closely working with the EU to further cooperation, while the country’s journey to a low-carbon economy is also receiving major assistance from the bloc.

France provides €10 million to build Hanoi Metro Line 3 extension The French government has pledged its support to help Vietnam accelerate metro projects, develop public transport, and cut carbon emissions.

EU underscores importance of trade with Vietnam While seeking to elevate its relations with Vietnam, the European Union has pledged to continue providing more support for the country in developing renewable energy and achieving its net-zero emissions, with fresh expectations for larger trade and investment cooperation.