|At the workshop “Governance and Financing for Equal Energy Transition” hosted last week by UNDP and the Investment Review
Vietnam is emerging as a new manufacturing hub in the global supply chain. With its fast pace of urbanization, Vietnam’s energy demand will increase quickly in the next three decades. Ensuring energy at a reasonable price while transitioning from fossil fuels to renewables poses a great challenge for Vietnam. Investment will be focused on energy, transportation, agriculture, and industry.
Vietnam needs to invest 14-16 billion USD annually in transitioning the electricity sector, according to attendees of the workshop “Governance and Financing for Equal Energy Transition” hosted last week by UNDP and the Investment Review.
Dao Nhat Dinh, an energy expert, says: "14-16 billion USD a year is the investment needed for the electricity sector and the amount will multiply if we take into consideration transportation and cement and chemical production. We need a great amount of capital and prompt policies to use the capital."
Kanni Wignaraja, Assistant to the UN Secretary General and UNDP Director for Asia-Pacific, says one of the major challenges Vietnam faces is fulfilling its climate change and energy transition commitments while also fulfilling its sustainable development goals, reducing poverty, and promoting economic transition.
This is why experts emphasize ‘equal’ energy transition instead of just energy transition. Equal energy transition ensures energy access, reasonable energy prices, and universal social protection.
Energy transition will create jobs and promote renewable energy and social change. Doctor Pham Xuan Hoe, former Deputy Director of the Bank Strategy Institute of the State Bank of Vietnam, says energy transition should move toward green and sustainable goals and green finance. He said it’s important to develop a green credit program, green bonds for green energy and renewable energy, and work out consistent, stable incentives for the development of green, clean, sustainable energy.
According to experts, Vietnam needs to work closely with development partners to access international financial resources and import technology and equipment which are not available in the domestic market. Finance is the key factor in achieving equal energy transition, and profitability and predictability are the key factors in finance.