$102.5 mln initiative launched to strengthen forests, livelihoods, climate resilience in Vietnam

As climate risks intensify and pressure mounts on natural resources, Vietnam is scaling up investments that deliver both environmental and economic returns.

A newly launched $102.5 million climate initiative is channeling international finance into forest protection, climate-smart agriculture and rural livelihoods, demonstrating how green investment can drive resilience, inclusion and long-term growth in vulnerable regions.

The Government of Vietnam, the International Fund for Agricultural Development (IFAD) and the Green Climate Fund (GCF) on Thursday launched a $102.5 million initiative to reduce greenhouse gas emissions, protect forests and strengthen rural livelihoods.

The project, Achieving Emission Reduction in the Central Highlands and South Central Coast of Vietnam to Support National REDD+ Action Program Goals (RECAF), will promote sustainable land use, climate-smart agriculture and forest protection across some of the country’s most climate-vulnerable regions.

Vietnam’s rapid economic growth has been accompanied by a sharp rise in greenhouse gas emissions, increasing from 0.79 tons of CO2 per capita in 2000 to 3.81 tons in 2018.

In the Central Highlands, extensive deforestation has intensified climate risks for farming communities, degraded soil fertility and undermined long-term agricultural productivity. Dak Lak province, a major coffee-producing area, is among the regions most affected.

RECAF addresses these challenges by supporting farmers to adopt climate-smart agroforestry practices, strengthening natural forest protection, and promoting deforestation-free value chains that support sustainable economic growth.

The project is implemented by the Ministry of Agriculture and Environment (MAE) in collaboration with the provincial People’s Committees of Dak Lak, Gia Lai, Lam Dong and Khanh Hoa, with financing from IFAD and GCF.

“This project is critically important for Dak Lak and the Central Highlands,” said Nguyen Minh Huan, director of the Department of Natural Resources and Environment of Dak Lak province. “By integrating forest protection with sustainable farming, RECAF will help farmers increase their incomes while safeguarding forests for future generations.”

Over six years, RECAF is expected to reduce 6.68 million tons of greenhouse gas emissions, restore and improve 145,000 hectares of agroforestry land, and protect 500,000 hectares of high-value natural forest. The project will directly benefit around 420,000 people and indirectly improve the livelihoods of more than one million rural residents.

“RECAF reflects Vietnam’s leadership in linking climate action with rural development,” said Frew Behabtu, IFAD acting country director for Vietnam. “By placing farmers and forest communities at the center, the project builds resilience, protects natural resources and creates sustainable economic opportunities.”

A core feature of RECAF is its focus on partnerships between farmers, the private sector and local authorities, helping small-scale producers access markets, improve infrastructure and adopt sustainable practices. The project also prioritizes the inclusion of women, youth and ethnic minorities, ensuring those most affected by climate change benefit directly.

“The RECAF project shows how climate finance can deliver lasting benefits for people and nature,” said Frederic Wiltmann, Sub-Regional head for Southeast Asia at the Green Climate Fund. “It reflects GCF’s commitment to country ownership and impactful partnerships.”

Commenting on the financing structure, Nguyen Thi Dieu Trinh, deputy director-general of the Department of Debt Management and Foreign Economic Relations at the Ministry of Finance, said the blended financing approach helps keep the investment affordable and sustainable, while reducing pressure on the state budget and maximizing development impacts in remote areas.

“RECAF strongly aligns with the United Nations’ priorities in Vietnam and different SDGs, advancing climate action, poverty reduction and sustainable livelihoods together,” said Pauline Tamesis, UN Resident Coordinator. “By translating global commitments into tangible local impact, the project shows how multilateral cooperation can mobilize finance, expertise and national leadership around shared goals.”

IFAD has partnered with the Government of Vietnam for more than 30 years, supporting rural development, poverty reduction and climate resilience. Over this period, IFAD has financed 16 projects in the country with total investments exceeding $670 million, reaching more than 500,000 rural households.