This plan is assessed to demonstrate Vietnam's leading role and commitment in paving the way for a clean energy future, and is an important turning point in implementing JETP in Vietnam.
International partners highly appreciate Vietnam's plan to mobilize resources to implement Vietnam’s JETP
In December 2022, the Political Declaration establishing a Just Energy Transition Partnership (JETP Declaration) was signed by Vietnam and IPG members, including the European Union, the United Kingdom of Great Britain and Northern Ireland, the United States, Japan, Germany, France, Italy, Canada, Denmark and Norway announced.
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| Within the framework of the Summit commemorating the 45th anniversary of ASEAN - EU relations in Brussels (Kingdom of Belgium), Vietnam and the International Partnership Group (IPG) signed the JETP agreement (Source: VNA) |
JETP is one of the solutions to help Vietnam access the necessary resources to effectively implement a low-carbon development roadmap that is resilient to climate change in the common effort of global energy transition; and develop new economic opportunities to support Vietnam's transition towards a net-zero emissions future.
The French Development Agency (AFD) currently plays a leading role in the group of European donors within the framework of the Just Energy Transition Partnership (JETP).
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| AFD will cooperate with the Ministry of Natural Resources and Environment to propose policies on environment, climate, and water resources based on science (Source: Ministry of Natural Resources and Environment) |
On the sidelines of the COP28 conference, at a meeting with the Minister of Natural Resources and Environment, AFD representatives pledged to cooperate in promoting financial investment for energy conversion projects immediately after the Resource Mobilization Plan for JETP implementation force was announced.
Mr. Hervé Conan, director of the French Development Agency (AFD) in Vietnam, affirmed: "The fact that the Vietnamese Prime Minister attended COP28 and announced a plan to mobilize resources for JETP implementation is a testament to the international community to see that Vietnam is maintaining a firm stance with the desire to successfully implement the energy transition process and achieve zero net emissions by 2050. France, through AFD, commits to sponsor at least 500 million euros for Vietnam to to upgrade the power grid and infrastructure, aiming to increase the proportion of renewable energy in the energy structure.
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| Prime Minister Pham Minh Chinh spoke at the announcement ceremony of the Plan to mobilize resources to implement the Political Declaration establishing the Fair Energy Transition Partnership (JETP) (Source: VNA) |
For foreign investors already present in Vietnam, the RMP resource mobilization plan demonstrates a commitment to soon concretize policies for renewable energy development. This is something that has been expected for a long time, especially the standardization of direct power purchase contracts between renewable energy generators and large electricity customers.
According to Mr. Stuart Livesey, Country Director of Copenhagen Offshore Partners COP/CIP, Vice Chairman of the Green Growth Subcommittee, European Chamber of Commerce (EuroCham) in Vietnam, Vietnam is currently facing difficulties because laws and regulations are not complete enough to provide local energy such as offshore wind power. The European Chamber of Commerce (EuroCham) in Vietnam understands that this is a transition process with many challenges and it is difficult to satisfy all parties. Therefore, Eurocham is proposing a number of pilot models of cooperation with state-owned enterprises, establishing supply chains to gradually open this sector without switching directly into auctions and competitive bidding, which will require several more years to build the legal framework.
Partners commit to initial support of 15.5 billion USD
International partners are committed to mobilizing initial resources of 15.5 billion USD over the next 3-5 years to address urgent, catalytic needs for Vietnam's equitable energy transition. In particular, IPG Group committed to mobilizing financial resources of 7.75 billion USD with more attractive loan conditions than the current capital market. The Glasgow Finance Alliance for Net Zero Emissions (GFANZ) is committed to mobilizing at least 7.75 billion USD in private finance to directly support businesses through corporate investments and international businesses.
Vietnam will perfect institutions, legal frameworks, mechanisms and policies to transition to renewable energy with a roadmap and steps appropriate to the national context.
International partners also emphasized the need to develop and adjust relevant policies to truly unlock funding worth 15.5 billion USD.
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| Partners commit to mobilizing initial resources of 15.5 billion USD over the next 3 - 5 years to address urgent, catalytic needs for Vietnam's equitable energy transition - ( Source: VGP) |
Mr. Mark Tattersall, Australian Deputy Ambassador to Vietnam, said: "Vietnam's plan to mobilize resources to implement JETP is just the beginning because 15.5 billion USD is only a small part of what is needed to promote the energy transition process in Vietnam. The number is estimated to be as high as 400 billion USD in the future. It is important to have the right management and incentive mechanisms in place because in many ways, we are all competing to attract capital for the energy transition.”
Sharing the same opinion, Ms. Ramla Khalidi, chief resident representative of UNDP in Vietnam, said that central and provincial governments need to integrate JETP priorities into strategies, sectoral plans, and provincial plans to effectively implement JETP in the context that the annual plan for the 2024-2025 period is in the implementation phase and the medium-term investment plan for 2026-2030 is about to begin. Along with that, it is necessary to quickly carry out policy reform, starting with the development of regulations for the three top priority areas of offshore wind power, energy transmission and energy storage.
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| Prime Minister Pham Minh Chinh. (Thumbnail) |
Within the framework of the COP28 Conference, the Prime Minister emphasized that Vietnam will perfect institutions, legal frameworks, mechanisms and policies to transition to renewable energy with a roadmap and steps appropriate to the national context, transforming management technology, assessing and handling impacts, mobilizing finance, promoting public-private cooperation, and international cooperation for rapid transformation.
By its nature as a living document, the RMP will be regularly updated in parallel with the JETP implementation process. This allows Vietnam and international partners to evaluate investments and identify priority policies appropriate to each stage in Vietnam's clean and equitable energy transition./.