Announcement of an international agreement to mobilize USD 15.5 billion to support Vietnam’s energy transition

On December 14, leaders of Vietnam and the International Partnership Group (IPG) including the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway and Denmark signed a Equal Energy Transition Partnership (JETP) agreement. All of foreign leaders congratulated Vietnam on achieving this agreement.

According to news from the British and US embassies in Hanoi: The JETP agreement aims to help Vietnam realize its ambitious goal of Emissions Equalization by 2050, accelerate the process of peaking greenhouse gas emissions and transition from fossil fuel to clean energy.

In the short term, JETP will mobilize 15.5 billion USD of finance from the private sector and government in the next 3 to 5 years to support Vietnam’s green transition.

JETP will assist Vietnam in achieving the following new targets: Accelerating the time to peak greenhouse gas emissions from 2035 to 2030; reduce the power sector’s annual emissions by up to 30% from 240 million tons to 170 million tons and accelerate emissions peaks five years earlier by 2030; Limit Vietnam’s coal power capacity to 30.2GW from the planned 37GW; Accelerate the deployment of renewable energy so that it accounts for at least 47% of total electricity generation by 2030, up from the current 36% plan.

Around 500 million tons of emissions will be cut by 2035 if these targets are met.

Initial contributions to Vietnam’s JETP include a commitment of $7.75 billion from IPG, the Asian Development Bank and the International Finance Corporation. Private sector investment from financial institutions led by the Glasgow Financial Alliance for Net Zero (GFANZ) committed to raise another $7.75 billion in counterpart funding.

In the next 12 months, with the support of partner countries, Vietnam will develop a JETP Resource Mobilization Plan to implement JETP’s strategy and contribute capital.

Vietnam is the third country to sign JETP after the success of JETP with South Africa in COP26 and JETP with Indonesia in this year’s G20 leaders summit. As a fast-growing economy, Vietnam’s JETP will demonstrate that economic growth can’t be attributed to the use of fossil fuels.