From 15-16 May 2023, the Embassy of the United Kingdom of Great Britain and Northern Ireland, in partnership with PwC, will organize the Climate Finance Accelerator (CFA) Program in Vietnam. The program aims to support 9 emerging economies (including Vietnam) to build a pipeline of low-carbon projects with the potential to mobilize investment capital for implementation.
This is one of the UK Government's efforts to support Vietnam in implementing its commitments at COP26, and at the same time support the implementation of the Vietnam Just Energy Transition Partnership (V-JETP) announced in December 2022.
Connecting green finance and green projects
According to the CFA Program, although capital for climate finance is still available in the market, ensuring that this capital flows to the projects that need it most remains a challenge. Therefore, the Program facilitates project developers to meet and approach financial institutions that are capable of developing and financing large-scale climate projects. With this approach, CFA contributes to Vietnam’s overall efforts to implement its Nationally Determined Contribution (NDC) under the Paris Agreement, reduce greenhouse gas emissions and set more ambitious climate targets.
Sharing about the CFA Program, Mr. Ian P Milborrow - Deputy General Director of PwC UK - representative of the global CFA program, said: "Under the Paris Agreement, we have committed to being able to mobilize 100 billion USD/year to support climate finance. This means that investments in USD must be invested in carbon sequestration activities in the economy. Vietnam in October last year also updated its Nationally Determined Contribution (NDC) Report. This is a very ambitious report related to the forecasted targets that Vietnam will achieve in the medium term. This means that the Vietnamese Government will need to develop policies for many different sectors, such as energy, transportation, etc. And some of those activities will be funded, using government capital, some will use private capital.
In our assessment, the private sector will bear some of the risks and the Government will provide the policy architecture to leverage capital. Our CFA program supports private investors to mobilize capital to contribute to the implementation of NDC in Vietnam. We have a range of projects in Vietnam under the CFA program, covering 8 sectors, with a total capital requirement of over US$500 million this year.
Mr. Ian P Milborrow emphasized the criteria for selecting projects to access climate finance, which is that the capital for each project is between 5 and 100 million USD. The project must be consistent with the goals set by the Vietnamese Government in the NDC, have the potential to be replicated and create transformational impacts in the Vietnamese economy.
“The projects are not just at the idea level, but have already gone through 1-2 rounds of fundraising, have achieved significant milestones and need funding to implement the next steps. It is also important to note that according to the UK's support requirements for this Program, we want to support projects that can bring about factors related to gender equality and social inclusion,” said the Deputy General Director of PwC UK.
9 low carbon projects selected
Nine low-carbon projects across Vietnam have been selected to participate in the first phase of the Climate Finance Accelerator (CFA) Vietnam. The selected projects represent various sectors such as renewable energy, resource/energy efficiency, electric transport, AFOLU (agriculture, forestry and other land use), decarbonization of the building sector, circular economy, and waste management. These projects have the potential to benefit communities across Vietnam.
Specifically, the Blue Planet Environmental Solutions project - produces biogas from straw through a dry composting system. The biogas production process can generate energy and good quality sludge can be used as fertilizer.
Project of Control & Automation Solutions (CAS) - a high-tech company providing automation solutions in the fields of energy and agriculture. CAS has two smart agriculture projects participating in CFA Vietnam. The first project is Circular Rooftop Farming, focusing on developing and deploying advanced solutions for farming on rooftops, urban apartments and built-up spaces to promote the development of high-yield green areas in major urban centers. In addition, CAS also implements the Circular Agriculture-Solar Farm Project, focusing on deploying high-tech greenhouses using renewable energy from the sun and bio-waste in rural areas.
Dat Bike - Vietnam's first domestic electric motorbike manufacturer. With the mission of promoting the widespread application of green transportation in Vietnam, Dat Bike's project aims to produce modern, high-tech electric motorbikes for the mass market and develop an infrastructure of solar charging stations.
Deep C Green - a subsidiary of Deep C Industrial Park - a promising eco-industrial park in Vietnam. Deep C Green is looking to expand the installation and operation of solar panels on the roofs of tenants in the industrial park and thereby improve energy efficiency and reduce carbon emissions for Deep C Industrial Park.
Egreen Technology JSC - biogas power supplier for livestock farms. With biogas generator system, Egreen can help farms reduce biogas emissions and significantly reduce electricity costs.
Hoa Binh High-Tech Environment Joint Stock Company - an industrial waste management company based on the circular economy principle. To strengthen and expand its business scale, Hoa Binh High-Tech Environment Joint Stock Company has established an additional unit to collect, transport, treat industrial waste, hazardous waste and trade in waste and recycled products. This is an expansion project from the successful phase 1 of Hoa Binh High-Tech Environment Joint Stock Company.
Power Construction Consulting Joint Stock Company 4 is implementing a project focusing on processing and reusing fly ash from coal-fired thermal power plants to produce autoclaved aerated concrete (AAC) bricks and other types of unburnt bricks to replace traditional burnt clay bricks, contributing to the decarbonization of the construction materials industry in Vietnam.
Vietnam Sustainable Materials Joint Stock Company - a manufacturer of bamboo products such as bamboo boards, bamboo flooring and building materials, activated carbon, fuel pellets and handicrafts. This project works with forestry partners to implement sustainable farming practices and aims to increase the economic value of the bamboo value chain in the Central Highlands.
VRB Energy - a large-scale integrated manufacturer of Vanadium Flow Battery - VFB (Vanadium battery stored using liquid to store battery energy). The project is VRB Energy's expansion plan into the Vietnamese market. VRB battery uses vanadium electrolyte to store energy, thereby promoting the wider use of renewable energy such as wind and solar power.
Commenting on these projects, Mr. Iain Frew - British Ambassador to Vietnam said: “The exciting and innovative projects selected for CFA Vietnam highlight the huge potential of the Vietnamese private sector to help solve the climate crisis. The expertise shared with these projects will help them move closer to finding investors, which will in turn help reduce carbon emissions in communities across the country.”
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