December 14, 2022, Brussel-An international climate financing deal has been announced in the margins of the EU-ASEAN Commemorative Summit to help accelerate Vietnam’s efforts to shift its economy away from coal and boost the rollout of renewable energy.
Vietnam’s Just Energy Transition Partnership (JETP) will mobilise $15.5 billion over the next three to five years. Negotiated between the Vietnamese government and the European Union and the UK, the financial package includes $7.75bn billion of public money and at least $7.75 billion of private finance. The G7’s deal with Vietnam aims to bring forward the country’s peak in power sector emissions by five years to 2030.
Vietnam, which is among the world’s top 20 coal users, is the third country to launch a Just Energy Transition Partnership. South Africa’s $8.5 billion agreement was the first, with an investment plan signed off at COP27 in Egypt. Indonesia’s $20 billion JETP was unveiled at the G20 in Bali last month, with $10bn of public funding matched with $10 bn from specific private investors . Additional JET-P discussions are progressing at a slower pace in India and Senegal.
The following NGO and think tanks respond to Vietnam’s Just Energy Transition Partnership: Camilla Fenning, Programme Leader, E3G said:
“The Viet Nam JETP Political Declaration announcing a $15.5 billion deal is a welcome step in Viet Nam’s energy transition, including clear ambition to avoid construction of new coal plants, negotiate the closure of old and inefficient plants, and plan an emissions reduction pathway to phase out unabated coal-fired power generation, enabled by strong scale up of renewables to a target of 47% of electricity generation by 2030. It’s critical that the proposed JETP Resource Mobilisation Plan (JETP-RMP) swiftly identifies new investment opportunities, improves regulatory frameworks to allow such private and public investment to flow, and draws on expertise including from civil society energy transition experts within Viet Nam.“
Ember‘s Asia Electricity Analyst, Dr Achmed Shahram Edianto said: “Vietnam has been at a crossroads and this deal should seal the direction of travel. Until this point it was unclear which way the country would go. The country’s latest energy plan has been delayed and revised five times in just two years, and the latest draft still implies the awakening of a coal-heavy energy pathway. This new $15.5 billion deal for Vietnam is expected to reroute the country’s energy transition pathway, to significantly increase the share of renewable energy and attach a higher priority to reduce coal in their future electricity system.”
Andri Prasetiyo, from Trend Asia said: “Reflecting on the recent announcement of a Just Energy Transition Partnership (JETP) agreement with Indonesia at the G20 Summit, Vietnam’s JETP should ensure that it does not become a quasi-partnership, but instead provides a favourable financial scheme, particularly for developing countries. The initial $15 billion funding needs to offer a sufficient portion of grants or at least a more soft loan portion. I am concerned that if Vietnam’s JETP arises only as a new form of loan, it could fail to support the crucial aspects of a just transition, which is strongly tied to a sense of responsibility and assistance from developed countries to developing countries.”
“This $15.5 billion climate deal could provide Vietnam with the momentum needed to accelerate the energy transition away from fossil coal energy. Of course, with the condition that the agreement is developed and implemented in a genuinely transparent, accountable, and inclusive way. The country must also redirect its energy policy by leapfrogging from coal energy to sustainable renewable energy to avoid betting on the trap of heavy debt and failure to cut emission levels. This also includes halting the support for the false and costly solution of fossil gas and advanced coal technology.”
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Contacts:
- Andri Prasetiyo,
Researcher, Trend Asia, [email protected]
- Camilla Fenning
Programme Leader, E3G, [email protected]
- Dave Jones
Global Programmes Lead, Ember, [email protected]
- Dr Achmed Shahram Edianto
Asia Electricity Analyst, Ember, [email protected]
Photo by Made From The Sky on Unsplash