Vietnam green budget short of tasks

Vietnam will need about $30 billion to implement its Green Growth Strategy adopted in 2012.

According to the Ministry of Planning and Investment, the country cannot afford such an expense, as it is already lacking finances to facilitate its green growth policies.

“More support is needed, as Vietnam would need a huge capital volume to effectively deploy its green projects and programmes,” Deputy Minister Nguyen The Phuong told international organisations’ representatives at the recent Global Green Growth Week 2016 in South Korea.

“Vietnam has achieved middle-income status, which means that grant-based and highly concessional lending is due to end in 2017. As such, Vietnam must develop new sources of financing to invest in green growth,” he said. “The MPI welcomes support from all development partners to strengthen our access to and deployment of green finance.”

Meanwhile, the World Bank estimated that Vietnam’s transition to a low-carbon pathway will present an incremental cost of at least 1 per cent of the GDP each year between 2010 and 2030. Vietnam will also have to spend a further 2-6 per cent to adapt to climate change impacts that are expected in this century.

Vietnam has access to considerable public funds for these needs, including over $1 billion per year to help finance the transition to green growth.

Two weeks ago, Vietnam and France signed two financing agreements on a concessional loan of $58.85 million and a grant of $1.12 million. This financial support will foster adaptation to climate change and addressing rainfall regime modifications, and the rising sea level in the provinces of Ninh Binh, Ha Tinh, and the southern city of Can Tho.

The Asian Development Bank has committed to provide further green financial support for Vietnam. The ADB, which has a large lending portfolio in the country disbursing more than $1 billion a year, is working with the government to provide green growth loans across the urban, energy, and transport sectors.

Meanwhile, the Global Green Growth Institute (GGGI) is also working with the ADB to produce a feasibility study for the southern province of Ben Tre to access a loan of $25 million to implement a key wastewater treatment project.

In another case, clean energy investment firm Dragon Capital is now in the process of launching a new $100-million fund in Vietnam.

Besides, GreenID, a domestic civil society organisation, has also developed a number of community-based energy projects that involve citizens at the decision making level to bring clean energy to their communities.

Phuong said the MPI has co-operated with development partners like GGGI to streamline access to sources of green growth finance. The MPI is also working with domestic financial institutions on this issue.

By Nguyen Thanh / vir