WB funded US$86,3 million to support energy efficiency projects in Vietnam

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Photo: Vietnam News

According to WB, US$8,3 million in the total of US$11,3 million will be used for the private sector to increase its capability for identifying, appraising, and executing energy efficiency projects. The World Bank, on behalf of The Green Climate Fund (GCF), has signed a US$11,3 million grant agreement with the State Bank to promote the commercial finance market for saving energy in Vietnam. The total financial support funded by GCF also includes a US$75 million guarantee, reported VTV.

The project also provides the Ministry of Industry and Trade with technical backing to innovate policies and tighten regulations that work for the development of the energy efficiency market in Vietnam.

Afterward, the remaining and the guarantee will be used to establish a risk sharing aid, providing partial credit guarantees for domestic commercial banks, which are vulnerable to lending for energy efficiency projects.

The aid is expected to appeal for about $ 250 million from commercial finance, allowing businesses to borrow on more competitive terms and low collateral requirements, reported The World Bank.

"Buiding up the energy efficiency is the best but low-cost solution to spontaneously achieve multiple goals: Meeting the consuming demand of energy, reducing pollution and greenhouse gas emission, as well as enhancing the competitiveness of businesses", said Carolyn Turk, the Country Director for Vietnam at the World Bank.

"The risk sharing fund is an innovative financial tool to mobilize the private sector's financial investment in implementing of energy efficiency measures in the industry", Turk added.

The grant aid and the guarantee will support Vietnam in the implementation of energy efficiency projects in industry, in order to achieve the energy efficiency targets set out by the Green Growth Strategy, as well as the emission reduction targets pledged in Nationally Determined Contribution (NDC).

Among one of the countries with the highest level of energy intensity and emission intensity, Vietnam is actively plunging into green energy transportation and decarbonization as well.

According to the study of low carbon emission conducted by The World Bank, Vietnam could save up 11 GW of new investment in generating capacity by 2030 providing that demand-side energy efficiency projects are comprehensively implemented. The total investment for energy efficiency of some key industries in Vietnam was estimated at roughly US$3.6 billion.

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