A $15.5 billion international clean energy deal has been struck for Vietnam – the world’s third biggest garment manufacturer – to accelerate the nation’s transition away from coal, media reported.
The Just Energy Transition Partnership (JETP) finance deal aims to mobilise public and private finance to help Vietnam, which relies on coal for nearly half of its energy, deliver its 2050 net-zero goal.
British Prime Minister Rishi Sunak and Climate Minister Graham Stuart confirmed the agreement alongside leaders from the EU, US, France, Germany, Italy, Canada, Japan, Norway and Denmark.
Earlier this year, the Institute for Energy Economics and Financial Analysis (IEEFA) warned that Vietnam’s manufacturing future depended on upgrading its coal-fired factories with renewable energy.
It pointed out that global brands, which were responsible for nearly 60 per cent of Vietnam’s exports, had made commitments to decarbonise their supply chains.
Under the new JETP deal, participating nations have committed US$7.75 billion and it is envisioned that this will be matched by private sector finance.
The Glasgow Financial Alliance for Net Zero (GFANZ), a coalition of finance companies managing more than US$153 trillion of assets, is being urged to support the initiative.
Vietnam has set out new energy sector targets it believes it can deliver with the support of the JETP. It wants to see annual power sector emissions peak by 2030, five years earlier than the previous target.
It will also limit its peak coal capacity to 30.2GW of generation and increase its target for the amount of its energy that is provided by renewable sources.
Vietnam is in the top 30 highest emitting countries in the world, largely because of its coal reliance. The delivery of the targets made under the JETP would result in the mitigation of 500 million tonnes of greenhouse gas emissions by 2035.
European Commission President Ursula von der Leyen said: “We will work together to show how emerging economies can accomplish the clean energy transition that their people and our planet so desperately need.”
JETP was first launched at COP26 in Glasgow in 2021 with a five-year programme of energy transition investment in South Africa. A second JETP was announced by Indonesia when it hosted this year’s G20 summit in Bali.