Date: 22 July 2020
Event: Viet Nam Energy Summit
Excellency Nguyen Van Binh, Chairman of the Central Economic
Excellency Trinh Dinh Dung, Deputy Prime Minister
Ladies and gentlemen,
It is a great honour and privilege to participate in this strategic conference of Viet Nam Energy Summit 2020.
At the outset, I would like to commend the Party and the Government of Viet Nam for their setting a clear direction towards sustainable energy development with the adoption of Resolution 55 on “Strategic Orientations for National Energy Development of Viet Nam until 2030, with vision to 2045.” and a new National Energy Efficiency Programme (VNEEP3).
This strategic orientation provides extremely timely guidance for the formulation of the up-coming Power Development Plan No. 8 (PDP8). It is a key pillar to realize Resolution 55. It is important that PDP8 ensure the achievement of key development benefits including:
- First, national energy security is strengthened by fully expanding available renewable energy sources such as solar and wind to reduce the dependence on coal imported from other countries;
- Second, it is key to reduce of risks and costs to health and the environment by reducing the coal in power generation;
- Third, the need for substantive investment by the private sector in renewable energy and energy efficiency, that will in turn reduce the burden from the State budget for energy development; and
- Fourth, contribute to addressing the global climate change as Viet Nam is assuming an increasing important role at global development agenda.
Ladies and Gentlemen,
Viet Nam is at critical juncture where strategic choices made today will determine the shape and trajectory of sustainable growth and the next stage of economic development.
It is clear that Viet Nam will not achieve its full potential in Renewable Energy development without the full engagement and investment from the Private Sector.
UNDP surveys of some large banks, institutions, and investors conducted in 2018 and 2020 show that between $10 to $15 billion is immediately available for investment in renewable energy and energy efficiency in Viet Nam if key barriers are addressed.
I would like to highlight a few key barriers and recommendations.
- First, A consistent concern raised by international investors is that the current Power Purchasing Agreement (PPA) needs further improvement to help reduce the risk to lenders for making long-terms commitments.
We strongly recommend accelerating, piloting and adopting policies on direct power purchase agreement (DPPA) mechanisms between renewable energy developers and end users;
- Second, key challenges persist for energy efficiency. With regard to financing, financial institutions often view energy efficiency projects as risky as they do not have confidence in the returns from such projects. Reducing high transaction costs due to legal, technical, and transactional complexities would help encourage confidence and boost investment.
- Third, Businesses, in particular Micro-, Small and Medium-sized enterprises (MSMEs) are key contributors to the economy and job creation and have important roles in energy efficiency, environmental protection, and climate change action. MSMEs need support and training in preparing and implementing green bankable projects, access to de-risking instruments and targeted funds that will stimulate demand for green investment, and enhanced linkage to global value chains.
On a final note, it is very encouraging that the recently adopted Public-Private Partnership Law has brought in great potential for private investment, especially in the energy sector.
Ladies and Gentlemen,
With the on-going development of the PDP8 and the next 10-year socio-economic development strategy (2021-2030), it is crucial for Viet Nam to consider integrated strategic decisions in sustainable energy development that catalyzes private sector investment that is capable of transforming the power sector and to achieve sustainable development.
And UNDP, with our UN partners will support the Government on this endeavor.