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JETP’s $15.5 billion aid paves way for Vietnam’s ambitious net zero goal: UK ambassador

JETP’s $15.5 billion aid paves way for Vietnam’s ambitious net zero goal: UK ambassador

Monday, December 19, 2022, 17:04 GMT+7
JETP’s $15.5 billion aid paves way for Vietnam’s ambitious net zero goal: UK ambassador
From left to right: Vietnamese Minister of Natural Resources and Environment Tran Hong Ha, High Representative of the European Union for Foreign Affairs and Security Policy Joseph Borell Fontelles, and UK Minister for Energy and Climate Graham Stuart agreed a Just Energy Transition Partnership, supporting Vietnam's ambitious Net Zero 2050. Photo: EU Delegation

UK Ambassador to Vietnam Iain Frew has congratulated Vietnam on the US$15.5 billion financial package with the International Partners Group including the European Union, the United Kingdom, the United States, Japan, Germany, France, Italy, Canada, Denmark and Norway, aiming to help the Southeast Asian country reduce its emissions to 'net zero' by 2050.

The Just Energy Transition Partnership (JETP), which was approved on December 14, is seen as a big step for green transition in Vietnam, saving 500 megatonnes of emissions by 2035 – equivalent to the annual emissions of 250 million cars.

The partnership will help Vietnam deliver on its ambitious 2050 'net zero' commitment, accelerate the peaking of its greenhouse gas emissions (from 2035 down to 2030), and the transition from fossil fuels to clean energy.

In an exclusive interview with Tuoi Tre News on December 15, Ambassador Frew emphasized that it was really exciting that Vietnam and the International Partners Group had agreed on JETP.

These negotiations were never easy and the deal Vietnam agreed on was really impressive and ambitious.

“I think it represents the matched ambition of both the Vietnamese government and international partners that want to support that transition," Frew said. 

Over the next 12 months, Vietnam will work with the support of partner countries to develop and adopt the Vietnam JETP Resource Mobilization Plan, which will enable the implementation of the JETP funding and strategy.

The aim of this plan is to provide more details of the areas which the JETP financing and technical assistance will support such as energy transition across wind and solar, energy efficiency storage, electric vehicles, training, and other regulatory reforms.

The Vietnamese government and authorities and the international partners will continue talking about the needs, the priorities, and the kind of reforms and opportunities that JETP can support along the way. 

“One of the important elements in considering this plan is we don't have to wait for 12 months in order to take action but we can take action right away with elements that can already be taken forward. The resource mobilization plan then provides us with a medium term to longer term set of specific projects that we will work on together,” Frew added.

Vietnam’s package is the third in a series of blockbuster deals to help coal-reliant middle-income countries accelerate the transition to cleaner energy.

South Africa’s $8.5 billion agreement was the first, announced at last year’s United Nations climate summit. Indonesia’s $20 billion pact was unveiled at the Group of 20 gathering in Bali last month.

Each JETP financial package is unique and specifically tailored to each country's needs. The Vietnamese’s JETP will mobilize an initial $15.5 billion of public and private finance over the next three to five years to support Vietnam’s green transition.

“It's important to note that the 3-5 years is an estimated timeline over which the initial funding for JETP will operate. It's not saying we have to wait three years from now. The aim of saying 3-5 years is to say this is the initial phase of the JETP and in fact, there's potential for further ambition," Frew pointed out.

“If we can go further, we can do more together.

"I think the numbers that will actually start to come through investment in renewable energy, infrastructure, and technology in Vietnam will be much greater than that."

He also believed that there are a lot of opportunities for the public and private sectors to benefit from JETP’s projects.

Ensuring the reform elements in JETP will happen is going to open up opportunities for both the public and private sectors as it sets a good framework for investments, delivering new renewable energy projects, connecting them to the grid, and bringing them online.

“When we see offshore wind, for example, developing in the UK and other countries, a lot has to be manufactured and delivered locally," Frew said.

"In fact, a very high percentage, I think it's over 40 percent, even just for the initial projects.

"There're real opportunities here for Vietnamese private sector suppliers as these projects get underway.

“From the UK experience that we've seen, where businesses prioritize low carbon and renewable and sustainable development, they then see huge benefits. The economy overall has seen a lot of new jobs too.

“In fact, in the renewable sector, the number of new jobs is growing four times faster in the UK than the rest of the economy. The context of Vietnam is different, but I think the opportunities are just as strong for generating new jobs for the next generation here.

“We know that some sectors are going to be affected, particularly the traditional coal power. We want to make sure that the JETP brings everyone along for the journey and everyone is going to benefit from the transition. The commitments in the JETP are challenging, but there's also going to be opportunity unlocked here.

"The transition opens up the opportunity to get the right framework in place for developing renewable projects, connecting them to the grid, and powering the growing economy here in Vietnam.

"We know that energy needs are growing every year. In order to meet those needs in a way that is consistent, it’s going to need quite a lot of focus, commitment, boldness, and courage.

"We're here to continue supporting that."

In 2021, Vietnamese Prime Minister Pham Minh Chinh attended the United Nations Climate Change Conference, referred to as COP26, in Glasgow where he made Vietnam's 'net zero' commitment by 2050.

The target was based on Vietnam’s own domestic resources, along with the international community’s support, in terms of finance and technology.

That commitment opened the path toward the JETP financial package a year later. The partnership will support Vietnam in working toward a number of ambitious new targets:

- Bringing forward the projected peaking date for all greenhouse gas emissions in Vietnam from 2025 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 percent.

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Hong Van / Tuoi Tre News

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