UK intensifies support for Vietnam’s just energy transition

The UK has reiterated its support for the clean energy transition in Vietnam during the ongoing visit from July 31 to August 3 of UK Minister for Energy Security and Net Zero Graham Stuart.

Vietnam's Deputy Prime Minister Tran Hong Ha receives UK Minister for Energy Security and Net Zero Graham Stuart in Hanoi on August 1. Photos: UK Embassy in Hanoi

The Minister reaffirmed the UK’s willingness to provide technical assistance, expertise, partnership and programming on energy transition and climate change to Vietnam, as part of the International Partner Group (IPG) supporting Vietnam’s Just Energy Transition Partnership (JETP).

Minister Graham Stuart praised Vietnam’s recent track record of setting, saying its strong, quantifiable climate targets are admirable. “The UK stands ready to provide Vietnam with further support to take the rapid, significant action at the scale required to meet its ambitious 2035 peak emissions and 2050 net zero targets,” he emphasized.

During the visit, he will meet with Vietnamese government officials at national and regional levels to drive forward collaboration on net zero. He’s scheduled to meet with key partners to discuss how British investment can contribute to a just transition that will help keep 1.5°C alive. The minister will visit solar and wind installations contributing to Vietnam’s clean energy transition.

On this occasion, he will celebrate 50 years of Vietnam-UK diplomatic relations with senior government officials, including Deputy Prime Minister Tran Hong Ha and Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan.

Minister Stuart will travel to the Mui Ne Solar and Mui Ne Wind Farms in the central province of Binh Thuan to witness how the UK-invested projects produce a combined 80MW output of renewable energy.

He will hear from developers, investors and local officials about the current green project development landscape in Vietnam and ways to break down barriers to growth in the sector.

Regarding finance, the Minister will also visit key infrastructure projects to explore how UK finance and expertise are playing a critical role in Vietnam’s sustainable development.

He will also witness the signing of a Memorandum of Understanding between Crossrail International and Hanoi Metropolitan Railway Board and attend the launch of the second phase of the Climate Finance Accelerator (CFA) program in Vietnam.

UK Minister for Energy Security and Net Zero Graham Stuart and British Ambassador to Vietnam Iain Frew witness the signing of a deal between Crossrail International and Hanoi Metropolitan Railway.

Broader partnership

The UK is one of the major countries supporting Vietnam’s Just Energy Transition Partnership (JETP), a country-led partnership between Vietnam and an International Partners Group (IPG) consisting of the UK, EU, US, Japan, Germany, France, Italy, Canada, Denmark, and Norway.

The JETP will leverage US$15.5 billion in public and private finance to help Vietnam achieve its ambitious Net Zero 2050 goal. Vietnam will do this by transitioning away from fossil fuels towards clean energy.

Under the partnership, the IPG will mobilize an initial amount of at least $15.5 billion over the next three to five years through a combination of appropriate financial instruments to support the needs of Vietnam’s just energy transition following the national framework for public debt and external debt management.

In close collaboration with the Vietnamese government, IPG members will mobilize $7.75 billion in public sector loans at more favorable terms than Vietnam could find on the capital markets. Conditional on IPG members mobilizing the catalytic public sector finance, the Glasgow Financial Alliance for Net Zero (GFANZ) Working Group will mobilize and coordinate at least $7.75 billion in private financing.

GFANZ includes an initial set of financial institutions, including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie Group, Mizuho Financial Group, MUFG, Prudential PLC, Shinhan Financial Group, SMBC Group, and Standard Chartered.

JETP is a long-term, ambitious partnership to support Vietnam’s low-emission and climate-resilient development, help the country accelerate the just transition and decarbonization of the electricity system, and develop new economic opportunities for the transition to a net zero future.

Through JETP, Vietnam will continue its work to improve the regulatory framework to expand both public and private investment in the country. This work should focus on renewable energy and the just energy transition, including measures to improve energy efficiency and strengthen the electricity grid in Vietnam, contributing to the achievement of the targets set out in the National Strategy on Climate Change to 2050 and Vietnam’s Nationally Determined Contributions (NDCs).