Wealthy countries and banks will provide $15.5 billion to assist Vietnam transition from coal, the UK foreign ministry announced on Wednesday.
Half of the cash is in the future from governments, the Asian Development Bank and also the International Finance Corporation. The remainder will come from private investment co-ordinated by the Glasgow Financial Alliance for Net Zero.
An initial quantity of $15.5 billion in public places and finance is going to be disbursed within the next 3 to 5 years, based on the pr release.
The deal can help Vietnam to peak its greenhouse gas emissions by 2030, bringing forward a previous 2035 projection, limit its peak coal ability to 30.2 gigawatts (GW) rather than an initially planned 37 GW, and source 47% of its power from alternative energy by 2030, the statement said.
The contributors claim delivering on these targets helps you to save around 500m tonnes of co2 by 2035. That’s about the same because the nation of Turkiye emits each year.
“Today, Vietnam has revealed leadership in charting an ambitious clean energy transition that delivers long-term energy security,” U.S. President Joe Biden said inside a statement.
Ember’s Asia electricity analyst, Achmed Shahram Edianto, said: “This new $15.5 billion deal for Vietnam is expected to reroute the nation's energy transition pathway, to significantly boost the share of alternative energy and fix a greater priority to lessen coal within their future electricity system.”
The deal is backed through the G7 number of big wealthy nations plus Denmark and Norway.
Mostly loans
A minor part of the funding is going to be grants, some of the public investment is going to be loans, a Reuters source said.
Andri Prasetiyo, from Trend Asia said: “The first $15 billion funding must offer a sufficient portion of grants or at best a far more soft loan portion. I'm concerned that if Vietnam's JETP arises only as a new form of loan, it could fail to support the crucial facets of a just transition, which is strongly associated with a sense of responsibility and assistance from developed countries to developing countries.”
Contributors haven't released a breakdown of which governments are giving what amount to Vietnam. They were similarly opaque concerning the breakdown for Indonesia but Climate Home obtained the details for that Nigeria deal.
Vietnam, among the world’s top 20 coal users, was initially slated to sign the “Just Energy Transition Partnership” with G7 nations at the global Cop27 climate summit in November, but high-level talks stalled before the meeting.
To persuade Vietnam to back the sale, Western negotiators led through the European Union and Britain have repeatedly increased the quantity of funding provided to Hanoi.
Another reason for contention was Vietnam’s imprisonment of anti-coal activists on tax evasion charges. The US has condemned the imprisonment of Khanh and fellow activists Mai Phan Loi, Bach Hung Duong and Dang Dinh Bach.
The deal may be the third of this type reached by G7 nations, as pressure mounts on them to help poorer countries cope with climate change and transition to cleaner energy.
The group signed similar deals this past year with South Africa and last month with Indonesia. In most three negotiations, the share of grants versus loans was a battle line.
The G7’s cope with Indonesia promised $10 billion in public funds to shut down coal plants there and bring forward the sector’s peak emissions by seven years to 2030. Nigeria was promised $8.5 billion.
Vietnam’s Environment Ministry didn't immediately respond to a request comment.
