- On the 14 December 2022, leaders from Vietnam and the International Partners Group, including the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway and Denmark have today (14 December) agreed a bold Just Energy Transition Partnership (JETP) worth US$ 15.5 billion with Viet Nam.
The Partnership will support Vietnam 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.
The JETP will mobilise an initial $15.5 billion of public and private finance over the next three to five years to support Viet Nam’s green transition.
The Partnership will support Vietnam in working towards a number of ambitious new targets:
- Bringing forward the projected peaking date for all greenhouse gas emissions in Viet Nam from 2035 to 2030.
- Reducing peak annual power sector emissions by up to 30 percent, from 240 megatons to 170 megatons, and bringing forward the peaking date by five years to 2030.
- Limiting Vietnam’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 percent 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 megatons (0.5 billion tonnes) of emissions saved by 2035.
Initial contributions to the Vietnam 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, Standard Chartered.
Over the next 12 months, Vietnam will work with the support of partner countries to develop and adopt the Viet Nam JETP Resource Mobilisation Plan, which will enable the implementation of the JETP funding and strategy.
Viet 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, Vietnam’s JETP will demonstrate that economic growth can be decoupled from fossil fuel energy consumption.
The Vietnam 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.
Ensuring the transition away from fossil fuels is ‘just’ lies at the centre of the JETP. A just transition will not only help Vietnam meet climate goals but also secure a resilient and prosperous future for its people, reducing the impacts of pollution and supporting economic growth and new jobs. It is vital that the whole civil society is involved in the green transition at all stages and no one is left behind.
Author: Bryan Groenendaal