Just Energy Transition Partnership to mobilise $15.5 billion to support Việt Nam's green transition

December 15, 2022 - 17:52
The Just Energy Transition Partnership (JETP) will mobilise an initial US$15.5 billion of public and private finance over the next three to five years to support Việt Nam's green transition.
An offshore wind power project is operated in the Mekong Delta province of Bạc Liêu. —VNA/VNS Photo Chanh Đa

HÀ NỘI — The Just Energy Transition Partnership (JETP) will mobilise an initial US$15.5 billion of public and private finance over the next three to five years to support Việt Nam's green transition.

The decision was made after leaders from Việt Nam 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 Wednesday a bold Just Energy Transition Partnership.

Under the agreement, the Partnership will support Việt Nam 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.

It will support Việt Nam in working towards a number of ambitious new targets, consisting of bringing forward the projected peaking date for all greenhouse gas emissions in Việt Nam from 2035 to 2030; reducing peak annual power sector emissions by up to 30 per cent, from 240 megatonnes to 170 megatonnes, and bringing forward the peaking date by five years to 2030; limiting Việt Nam's peak coal capacity to 30.2 gigawatts down from a current planning figure of 37 gigawatts; 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 result in around 500 megatonnes (0.5 billion tonnes) of emissions saved by 2035.

Initial contributions to the Việt Nam 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 (GFANZ), 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, Việt Nam will work with the support of partner countries to develop and adopt the Việt Nam JETP Resource Mobilisation Plan, which will enable the implementation of the JETP funding and strategy.

Việt Nam 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, Việt Nam's JETP will demonstrate that economic growth can be decoupled from fossil fuel energy consumption.

The Việt Nam JETP builds on the UK-launched G7 Partnership for Global Infrastructure and Investment (PGII), 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, which are a core delivery mechanism of the PGII.

UK Prime Minister Rishi Sunak said the JETP model is a game changer in the fight against climate change – using international aid to unlock billions of dollars of private finance.

Việt Nam is a dynamic, emerging economy at the heart of Southeast Asia, he said.

“The investment we are making today means the country can cut its emissions while simultaneously creating new jobs and growth. Together we will deliver a cleaner, greener future for Việt Nam and our planet,” he said.

President of the European Commission, Ursula von der Leyen said: “I am delighted that we have sealed a new Just Energy Transition Partnership with Việt Nam during this important week for EU-ASEAN relations.”

"With investments from international partners, Việt Nam can boost renewable energies and enhance its energy security and autonomy.

"We will help Việt Nam to start reducing its greenhouse gas emissions five years earlier than planned, and dramatically reduce its coal power use.

“This Partnership will help Việt Nam to build a 21st century power sector, energising its economic growth and bringing environmental and health benefits to its citizens,” she said.

UN Secretary-General António Guterres said: “With today's agreement, Việt Nam 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, he said.

“We need all hands on deck to realise 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,” he said.

President of the United States, Joe Biden said: “Today, Việt Nam 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, he said.

Việt Nam's historic commitment will catalyse investment and economic growth and create tremendous opportunity for the Vietnamese people, while advancing the fight against the global climate crisis, he said.— VNS