Leaders from Vietnam and the International Partners Group, including the United Kingdom, the European Union, Germany, France, the United States, Canada, Italy, Japan, Denmark, and Norway, have agreed on a bold Just Energy Transition Partnership (JETP) on the 14th of December 2022. The partnership will assist Vietnam in delivering its ambitious Net Zero 2050 goal, accelerating the peaking of its greenhouse gas emissions, and transitioning away from fossil fuels to clean energy.
To support Vietnam’s green energy, the JETP will help mobilize an initial $15.5 billion of public and private finance over the next three to five years. The partnership would help Vietnam work toward various ambitious new targets. Some of them are curated below:
- To Bring forward the projected peaking date for all greenhouse gas emissions in Vietnam from 2035 to 2030.
- To reduce the peak annual power sector emissions by up to 30 percent, from 240 megatons to 170 megatons, and to bring forward the peaking date by five years to 2030.
- To limit the peak coal capacity of Vietnam to 30.2 gigawatts down from a current planning figure of 37 gigawatts.
- To accelerate the adaptation of renewables so that renewable energy accounts for at least 47 percent of electricity generation by the year, 2030, up from the current plan generation share of 36 percent.
After the successful delivery of these ambitious targets, it will result in around 500 megatons (0.5 billion tonnes) of emissions saved by 2035. The initial contributions to the Vietnam JETP include $7.75 billion in pledges from the IPG along with the International Finance Cooperation and the Asian Development Bank. This is supported by a commitment to work in order to mobilize and facilitate a matching $7.75 billion in private investment from an initial set of private financial institutions, which will be coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), which includes Citi, Bank of America, HSBC, Deutsche Bank, Macquarie Group, MUFG, Prudential PLC, Shinhan Financial Group, SMBC Group, Standard Chartered, and Mizuho Financial Group.
Vietnam will work with the support of partner countries over the next twelve months to develop and adopt the Vietnam JETP Resource Mobilization Plan, which will enable the implementation of the funding and strategy of JETP.
Following the successful launches of the South Africa JETP at COP26 and the Indonesia JETP at the 2022 G20 Leaders Summit, Vietnam is the third country to launch a JETP. As the Vietnamese economy grows, its JETP will demonstrate that economic growth can be decoupled from fossil fuel energy consumption.
The Prime Minister of the UK, Rishi Sunak, said, “The JETP model is a game changer in the fight against climate change—using international aid to unlock billions of dollars of private finance.” He further said that Vietnam is a dynamic and emerging economy at the heart of Southeast Asia. The investments that the countries are making today mean that the country can cut its emissions while at the same time creating new jobs and enhancing growth.
