WB loan to help industrial enterprises become energy-efficient

$102 million loan for $158 million project assisting industrial enterprises to purchase energy-efficiency technologies.

The World Bank’s Board of Executive Directors has approved a $102 million loan to the Vietnamese Government to support the efforts of industrial enterprises to adopt energy-efficiency technologies and practices.

“We are committed to supporting Vietnam’s drive to meet its future energy demand, and improving energy efficiency is the single best and cheapest option, because it will help consumers save energy and reduce the need for new thermal power generation while also reducing pollution and mitigating the risks of climate change,” said Mr. Ousmane Dione, the World Bank’s Country Director for Vietnam. “If stronger programs and policies are put in place, businesses would also have the incentive to cut down on wasteful practices and adopt more energy-efficient technologies.”

Under the project, industrial enterprises can access a new line of credit to fund their purchases of energy-efficiency and production-optimization technologies, thus reducing energy consumption and production costs and increasing their overall competitiveness in the domestic and international markets.

With the support of the project, financial institutions and industrial enterprises will be able to prepare, evaluate and appraise energy efficiency projects. This will create a new line of business for financing institutions, providing loans to support industrial energy-efficiency investments, which will enable them to scale up energy-efficiency lending to industries.

Funding from the project will be provided to participating financial institutions, which will then lend to industrial enterprises to invest in energy-efficient sub-projects.

Of the $158 million for the project, $100 million comes from the World Bank’s International Bank for Reconstruction and Development, the financing resource for middle-income countries, and $1.7 million from the International Development Association, its fund for the poorest countries. The remainder will come from the Vietnamese Government and participating financial institutions.

by Doanh Doanh / VET