HCMC – Vietnam and the International Partners Group (IPG) have agreed a bold Just Energy Transition Partnership (JETP) which will mobilize an initial US$15.5 billion of public and private finance over the next three to five years to support Vietnam to achieve its ambitious Net Zero 2050 goal, said a statement posted on the website of the European Commission.

The signing took place on December 14 during the EU-ASEAN Commemorative Summit in Brussels, Belgium.

The IPG includes the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway and Denmark.

UK Prime Minister Rishi Sunak said in the statement: “The JETP model is a game changer in the fight against climate change – using international aid to unlock billions of dollars of private finance. Vietnam is a dynamic, emerging economy at the heart of South East Asia. The investment we are making today means the country can cut its emissions while simultaneously creating new jobs and growth. Together we will deliver a cleaner, greener future for Vietnam and our planet.”

This partnership will enable Vietnam to realize its Net Zero emissions by 2050, accelerate the peaking of its greenhouse gas emissions and transition away from fossil fuels to clean energy.

The statement said the new targets within the partnership include bringing forward the projected peaking date for all greenhouse gas emissions in Vietnam from 2035 to 2030; reducing peak annual power sector emissions by up to 30%, from 240 megatons to 170 megatons, and bringing forward the peaking date by five years to 2030; limiting Vietnam’s peak coal capacity to 30.2 gigawatts, down from the current planning figure of 37 gigawatts; accelerating the adoption of renewables so that renewable energy accounts for at least 47% of electricity generation by 2030, up from the current planned generation share of 36%.

If these ambitious targets are translated into reality, they will result in around 500 megatons (0.5 billion tons) of emissions saved by 2035, according to the statement.

President of the European Commission Ursula von der Leyen said: “I am delighted that we have sealed a new Just Energy Transition Partnership with Vietnam during this important week for EU-ASEAN relations. With investments from international partners, Vietnam can boost renewable energies and enhance its energy security and autonomy. We will help Vietnam to start reducing its greenhouse gas emissions five years earlier than planned, and dramatically reduce its coal power use. This Partnership will help Vietnam build a 21st century power sector, energising its economic growth and bringing environmental and health benefits to its citizens.”

Initial contributions to the Vietnam JETP include US$7.75 billion in pledges from the IPG together with the Asian Development Bank and the International Finance Corporation.

This is supported by a commitment to work to mobilize and facilitate a matching US$7.75 billion in private investment from an initial set of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie Group, Mizuho Financial Group, MUFG, Prudential PLC, Shinhan Financial Group, SMBC Group, Standard Chartered.

Canada’s Prime Minister Justin Trudeau said in the statement: “Just Energy Transition Partnerships are a model for how contributors can work together with partners like Vietnam to take action towards cleaner sources of energy. Canada will continue to be a committed partner for the clean energy transition and coal phase-out in Vietnam, which is in all our best interest for an inclusive, clean energy future in the Indo-Pacific region”.