International partners pledge $15.5 bln for Vietnam’s green transition

International partners have committed to mobilizing $15.5 billion from public and private finance over the next three to five years to support Vietnam’s green transition.

Minister of Natural Resources and Environment Tran Hong Ha said the U.K., France, Germany, the U.S., Italy, Canada, Japan, Norway, and Denmark on Wednesday agreed on a bold Just Energy Transition Partnership (JETP) for Vietnam.

“The partnership will support Vietnam to deliver on its ambitious Net Zero 2050 goal, accelerate the peaking of its greenhouse gas emissions, and transition away from fossil fuels to clean energy,” he quoted a press release from the U.K. government as saying.

The program will support Vietnam in working toward a number of ambitious new targets, including bringing forward the projected peaking date for all greenhouse gas emissions from 2035 to 2030; and reducing peak annual power sector emissions by up to 30%, from 240 megatons to 170 megatons, and bringing forward the peaking date by five years to 2030.

It will also help Vietnam limit its peak coal capacity to 30.2 gigawatts down from a current planning figure of 37 GW; and accelerate the adoption of renewables so that renewable energy can account for at least 47% of electricity generation by 2030, up from the current planned generation share of 36%. Successful delivery of these ambitious targets will result in around 500 megatons (0.5 billion tons) of emissions saved by 2035.

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 the implementation of the JETP funding and strategy.

Vietnam is the third country to launch a JETP, following South Africa and Indonesia. Vietnam’s JETP will demonstrate that economic growth can be decoupled from fossil fuel energy consumption. It builds on the UK-launched G7 Partnership for Global Infrastructure and Investment (PGII), which aims to narrow the infrastructure investment gap in developing countries.

According to the U.K. government press release, many foreign leaders have sent their congratulations to Vietnam on this event. British Prime Minister Rishi Sunak said that the JETP model is a game changer in the fight against climate change - using international aid to unlock billions of U.S. dollars of private finance.

“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," said Sunak.

U.S. President Joe Biden said in the release, “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 catalyze investment and economic growth and create tremendous opportunity for the Vietnamese people, while advancing the fight against the global climate crisis.”

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 energies 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 the country to build a 21st-century power sector, energizing its economic growth and bringing environmental and health benefits to its citizens.”.

According to UN Secretary-General Antonio Guterres, with the agreement, Vietnam is pioneering a new framework of collaboration to deliver a fair, inclusive energy transition towards renewables. These partnerships are a crucial tool to unlock the emissions cuts our world needs in the 2020s.

“We need all hands on deck to realize an energy transition that is global, sustainable, just, inclusive and equitable. The United Nations stands ready to continue supporting these partnerships and all other cooperative efforts,” the UN leader said.