The UK foreign ministry announced on Wednesday that wealthy countries and banks will provide $15.5 billion to help Vietnam transition away from coal.
While half of the money will be donated by different governments, the Asian Development Bank and the International Finance Corporation, the rest will come from private investment coordinated by the Glasgow Financial Alliance for Net Zero.
According to a press release, an initial amount of $15.5 billion in public and private finance will be disbursed over the next three to five years, to help bring forward a previous 2035 projection, limit its peak coal capacity to 30.2 gigawatts (GW) instead of an initially planned 37 GW, and source 47% of its power from renewable energy by 2030 and the contributors claim delivering on these targets will save around 500m tonnes of carbon dioxide by 2035.
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“Today, Vietnam has demonstrated leadership in charting an ambitious clean energy transition that will deliver long-term energy security,” U.S. President Joe Biden said in a statement.
The deal, according to him, is also backed by the G7 group of big wealthy nations plus Denmark and Norway, albeit they have not released a breakdown of which governments are giving what amount to Vietnam.
According to reports, the deal is the third of this type reached by G7 nations, as they are now under pressure to help poorer countries cope with climate change and transition to cleaner energy.
The group signed similar deals last year with South Africa and last month with Indonesia. In all three negotiations, the share of grants versus loans was a battle line.
Recall that the G7’s deal with Indonesia promised $10 billion in public funds to shut down coal plants there and bring forward the sector’s peak emissions by seven years to 2030 while South Africa was promised $8.5 billion.
Story was adapted from Climate Home News.
