The role of private sector in race to net-zero

The conversation at COP26 with the prime minister of Vietnam stressed the role of the private sector in the race to net-zero

José Viñals, group chairman of Standard Chartered Bank stressed in conversation at COP26 with the prime minister of Vietnam that “the private sector has a crucial role to play in the fight against climate change – by unlocking and deploying the financing needed to support climate-compatible infrastructure, renewable energy, and other vital sectors.”

He mentioned the La Gan offshore wind power project as an example, representing a contribution of $4.4 billion to the Vietnamese economy, creating 46,000 jobs, generating 250TWh of green energy to power 7 million households, and saving 130 million tonnes of CO2 emissions over its lifetime

The La Gan project is one of the first large-scale offshore wind power projects in Vietnam. With an expected capacity of up to 3.5GW, the estimated total investment value for all project phases is about $10.5 billion. It is mainly developed by the Danish fund manager Copenhagen Infrastructure Partners (CIP) with its local partners and managed by offshore wind expert Copenhagen Offshore Partners (COP).

While Vietnam has set ambitious renewable energy targets, the financing required to achieve a transition over time will be sizeable.

At COP26 summit, CIP, a world-class offshore wind developer and investor with $18 billion under management, has also announced plans to invest €100 billion ($115 billion) in renewable energy by 2030.

CIP managing partner Jakob Baruël Poulsen was quoted as saying: “In combination with financing from banks and partners, our average annual deployment will be almost €20 billion ($23.17 billion) a year during this period, resulting in significant CO₂ reductions.”

An offshore wind project developed by CIP

The La Gan project and its shareholders are fully committed to the Vietnamese government’s vision for sustainable energy development, and they are looking forward to supporting the Vietnamese government to ensure the success of the offshore wind industry in the country.

According to the draft Power Development Plan VIII, the total investment capital required to implement the electricity development programme will be about $99.32-115.96 billion in 2021-2030, equivalent to $8.57 billion-$10.15 billion per year