G7 Grants Vietnam 300 Million Dollar: Over $300 million in grants from G7 countries are intended to help Vietnam shift away from coal and cut carbon emissions. This funding is part of a $15.5 billion G7-partner pledge to assist Vietnam reach net-zero emissions by 2050.
Vietnam had sought additional grants and affordable financing to enable its costly phase-out of coal-fired power facilities and transition to renewables, but much of the aid is pricey loans at market rates. This money distribution is contentious.
The EU and EU member states contributed $2.6 billion to this financial aid. A large component of the finance is low-interest concessional loans. Private investors are projected to provide a large part of these loans, depending on regulatory improvements and project quality.
The offer is awaiting approval from international partners, who are advocating for more stringent regulatory reforms and greater civil society involvement in climate decisions. The grants amount to $321.5 million, mainly provided by the European Union and EU member states. Another $2.7 billion are offered in concessional loans, with about two-thirds coming from the EU, Germany, France, and the remaining third from the Asian Development Bank (ADB), with a small portion from Canada.
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A significant part of the public funding consists of commercial loans at market rates, which Vietnam has been hesitant to accept, given the current global context of rising interest rates. The remaining $7.5 billion is expected to come from private investors in costly loans, contingent on regulatory reforms and project quality.
In September, the United States upgraded its diplomatic relations with Vietnam to the highest level and pledged $1 billion, primarily in loans at market rates. Some experts have expressed concerns that the amount of grants provided may be insufficient to convince Vietnam to accelerate its coal phase-out plans.
To fund its power generation initiatives, Vietnam estimates it needs roughly $135 billion until 2030, with even more required by mid-century. The G7 funds are intended for an initial period of three to five years and are designed to attract larger private investments.
Vietnam’s plans anticipate an increase in energy generated from coal until 2030, followed by a decline in the following two decades. While coal will remain a part of the energy mix, its share of total power output is projected to drop to 20% in 2030 from 31% in 2020.