Viet Nam needs huge amount of investment capital for energy transition

Speaking to reporters on the sidelines of the 28th United Nations Climate Change Conference (COP28) Dao Xuan Lai, Head of Climate Change and Environment at the UNDP Viet Nam, said Viet Nam has released specific and ambitious targets since its announcement of climate commitments at the COP26.

The Southeast Asian country should shift its entire economy towards green, circular, and low-carbon one. This process requires a huge volume of capital, said Dao, adding that Viet Nam needs around US$134,5 billion for development of the renewable energy alone by the end of this decade.

At the COP28, Viet Nam and international partners group (IPG) announced the launch of Resource Mobilization Plan (RMP) to implement the Political Declaration on establishing the Just Energy Transition Partnership (JETP), which is expected to help accelerate transition to green, circular and digital economy.

However, the commitment by IPG and Glassgow Financial Alliance for Net Zero (GFANZ) to help Viet Nam mobilize US$15.5 billion only constitutes a small part of the required capital volume.

Dao suggested Viet Nam should strengthen investment in and foster advanced technology transfer to offshore wind power, solar pannel, carbon storage and use, and hydrogen projects.

Viet Nam should also invest more heavy on development of high-quality workceforce for greeen economy, renewable energy while stepping up institutional reform to create a transparent and attractive environment for international business giants to invest in green, circular, low-carbon, and high-tech economy.

In a recent interview with VGP, UNDP Resident Representative in Viet Nam Ramla Khalidi said Viet Nam should Viet Nam should prioritize a just energy transition, accelerated by the implementation of its JETP.

Remarkably, the nation should focus on measures to ensure that the transition does not disproportionately affect vulnerable populations and workers in the fossil fuel industry, while promoting equitable access to new job opportunities in the renewable sector, and offering retraining and reskilling programs so the social protection measures are in place to account for any disruption, she suggested.

The role of the Government as the startup investor in essential physical infrastructure and as the guardian of an attractive regulatory environment that fosters renewables is key, stated Ramla Khalidi.

The Government can act as a start-up investor placing essential investment in physical infrastructure as well as making sure that the regulatory framework is attractive and able to attract renewable energy investments across the sector, she recommended.

Meanwhile, the nation should maintain its leadership in renewable energy sphere and that can really support it to reduce emissions to really capitalize on economic benefits and reduce its dependency on coal.

Besides, Viet Nam should not only enhance efforts to maintain and increase forest coverage, which currently represents more than 41 percent of the country's total land, but also to improve the quality of forests and preserve natural and native forests, which are critically important for biodiversity, and play a vital role in carbon sequestration and storage.

The UNDP official suggested Viet Nam continue to promote and scale up nature-based solutions for the dual benefits of strengthened resilience to climate change and emissions reduction./.