International cooperation needed to promote energy transition in Vietnam

The involvement of the Glasgow Financial Alliance for Net Zero (GFANZ) and its member financial institutions is significant in setting specific plans and priorities for Vietnam's energy transition process and green economy development.

GFANZ's Executive Director for Public Policy, Alice Carr, told Vietnam's Deputy Prime Minister Tran Hong Ha at a meeting in Hanoi this week.

GFANZ is the world's largest coalition of financial institutions with ambitious science-based commitments to the net zero transition. At the meeting, Alice Carr emphasized the need to rapidly establish a global financial policy framework to advance the Just Energy Transition Partnership (JETP).

The official noted that GFANZ wants to work with Vietnam on energy transition and will identify priorities based on comparative advantages, such as smart grid development, offshore wind power, and research on new technologies for production, storage, transportation, and use of new fuels.

She added that GFANZ will provide financial packages for technological innovation in smart grid systems, fossil fuel transition, and other related initiatives.

Deputy Prime Minister Tran Hong Ha receives Alice Carr, Executive Director of Glasgow Financial Alliance for Net Zero (GFANZ) in Hanoi. Photo: Minh Khoi/VGP

At the meeting, Deputy Prime Minister Tran Hong Ha said Vietnam had made thorough preparations to select effective and practical projects. "We want to work closely with the governments of other countries and GFANZ to achieve our goal of net zero emissions and actively lead the process of implementing net zero and JETP," he stressed.

Vietnam hopes that GFANZ will share its experience in renewable energy development in developing countries and establish effective links and cooperation with Vietnam, Ha continued.

The Deputy Prime Minister shared solutions and roadmaps for achieving the commitment to zero greenhouse gas emissions and the JETP and other ongoing initiatives in Vietnam. He then invited GFANZ to share its experience in renewable energy development and strengthen cooperation with Vietnam.

Vietnam has renewable energy projects related to wind and solar power with a capacity of about 9,000 MW. The National Power Development Plan for the 2021-2030 period, with a vision to 2050 (Power Plan VIII), allocates a significant space for renewable energy.

This includes plans to build offshore wind farms, develop rooftop solar, establish smart grids, ensure balance and stability of the energy system, and promote self-generation and on-site consumption of solar power.

Ha said several pilot energy transition projects will be assigned to Vietnamese companies, adding that the country prioritizes green transition projects in transportation and agriculture.

"Vietnam is one of the countries most affected by climate change, often affected by floods, droughts, sea level rise, and extreme weather events. While a just energy transition will bring many benefits, it will pose many difficulties and challenges for the country. These challenges include ensuring socio-economic development, safeguarding the interests of the people and businesses, and ensuring employment and income for workers suffering from job losses. There are also difficulties regarding technology, capital, and capacity," Ha said.

"Therefore, it is essential to exchange and share experiences among countries and share the knowledge of experts on energy issues. To ensure a successful transition, we really need multifaceted support from the international community and domestic efforts and resources," he concluded.

In late 2022, GFANZ announced the establishment of a working group to support capital mobilization for Vietnam's JETP.

Through a JETP, the Vietnamese government will pursue an ambitious national effort to expand renewable energy and accelerate the phase-out of fossil fuels, while investing in transition-oriented jobs and industries of the future.

GFANZ said it would support these efforts, with a particular focus on leveraging private capital.