The Australian Government is providing US$50 million to VinFast to support electric vehicle (EV) uptake in Vietnam and support Vietnam’s energy transition.
VinFast is a subsidiary of VinGroup – Vietnam’s largest private enterprise and the largest listed company.
| Vinfast bus on the street. Photos: Embassy of Australia in Hanoi |
Through specialist financing from Export Finance Australia (EFA) and the Australian Climate Finance Partnership (ACFPC), Australia will support the manufacturing of electric public buses and help establish Vietnam’s first national EV charging network, Australia’s Ambassador to Vietnam, Andrew Goledzinowski, highlighted the importance of partnership in deals like this.
“This investment demonstrates different parts of the Australian Government working effectively together with different parts of the Vietnamese system to deliver on Vietnam’s and Australia’s strategic interests,” Ambassador Goledzinowski said.
The Government of Australia stands ready to support Vietnam across the full range of its energy needs to successfully achieve the transition to net zero. The investment, therefore, demonstrates Australia is committed to addressing climate change in collaboration with important partners in the region, like Vietnam.
“Australia recognizes first-hand the challenges of transitioning to a net-zero future. As we engage on the EV transition domestically, we are also committed to working with our partners in Vietnam to also help them make this transition,” he noted.
The Australian Government will continue to explore opportunities to support sustainable infrastructure in the region. Australia has significant capabilities to bring to its partners such as Vietnam, including exportable goods and services and financing capability.
This investment marks EFA’s second investment in renewable energy in Vietnam. It also demonstrates the important role Export Finance Australia is playing in financing the region’s infrastructure needs, having already provided US$32 million for three wind farms in Vietnam.
Australia is investing alongside the Asian Development Bank and other financiers. Part of Australia’s support is being delivered through the Australian Climate Finance Partnership (ACFPC), which provides concessional finance to catalyze much larger amounts of private climate investment.
| Vinfast EV bus on Hanoi's street. |
Model in Hanoi
In order to lessen greenhouse gas emissions, noise pollution, and traffic congestion from transportation vehicles, Vinbus, a subsidiary of Vingroup, is now running electric buses in Hanoi, Ho Chi Minh City, and Phu Quoc.
VinBus began operating its trial project in Ocean Park, Hanoi, in April 2021. The company launched the first electric bus line in Hanoi by the end of 2021. By the end of June 2022, eight routes in Hanoi are served by roughly 100 VinBus electric buses.
Despite being relatively few in comparison to the staggering total of more than 5,000 buses currently running in Hanoi, Ho Chi Minh City, and Danang, VinBus represents an important milestone as the country's first electric bus and the first licensed electric bus operator to offer public transportation services.
Additionally, it signifies the beginning of Vietnam's transition from fossil fuels to electricity, enhancing and extending public transportation services that do not actively create greenhouse gases while in operation.
According to Nguyen Van Thanh, Deputy CEO of VinBus, these bus routes attracted a variety of people over time, including people who had never taken a bus before and are now switching to using buses, even people in suits.
The move is in line with Hanoi’s plan to replace diesel buses with electric buses to reduce carbon and methane gas emissions. According to the municipal transport sector, the city needs roughly VND21 trillion (US$850 million) to switch more than 1,000 diesel buses to electric buses.
