Under a new Just Energy Transition Partnership (JETP) signed in December 2022, developed countries will mobilize USD 15.5 billion in public and private finance over the following 3-5 years to assist Vietnam’s 2050 net zero goals.
Rich countries, the Asian Development Bank, and the International Finance Corporation have pledged USD 7.75 billion in support for the JETP, and the Glasgow Financial Alliance for Net Zero (GFANZ), a coalition of financial institutions, has promised to work to mobilize the remaining funds.
The agreement was reached between Vietnam and the EU, as well as the UK, France, Germany, the US, Italy, Canada, Japan, Norway, and Denmark. The initiative supports a revised goal to forward the peaking of greenhouse gas emissions from 2035 to 2030 and aims to assist Vietnam in making the transition from fossil fuels to renewable energy.
Vietnam stated that it is now planning to bring forward the peaking date by five years, to 2030, and lower peak annual power sector emissions by up to 30%. The nation also aims to reduce its coal capacity to 30.2 GW from the current planned peak of 37 GW, while boosting the proportion of renewable energy for power generation, such as wind, solar, and hydroelectricity power, to 47% by 2030 from 36%. This will necessitate major modernization of the nation’s power grid, which will be aided by international support.
Vietnam will work on a plan to enable the implementation of the JETP funds and strategy over the following 12 months with the assistance of partner nations. This proves necessary since the plan’s emphasis on renewable energy could lead to power shortages in the country without a reliable backup in the event that wind farms or solar panels produce less energy than expected.
(Sources: Argus Media; Reuters)