On September 12, 2018, under the project "Vietnam Low Emission Energy Program (V-LEEP), Department of Energy Efficiency and Sustainable Development, the Ministry of Industry and Trade (MOIT) presided over the workshop on "Cost optimization and energy efficiency improvement: From policy to reality" in Hanoi.
The workshop aimed at supporting industrial enterprises to implement energy efficiency solutions and to comply with energy efficiency provisions through appropriate financial mechanisms and resources. The workshop attracted the participation of representatives of the U.S. Agency for International Development (USAID), commercial banks, Vietnam Textile & Apparel Association, Vietnam Pulp and Paper Association, Vietnam Steel Association, industrial enterprises and energy services companies (ESCOs).
Speaking at the workshop, Mr. Trinh Quoc Vu, Deputy Director general of Department of Energy Efficiency and Sustainable Development stressed that "Vietnam's increasing rate of annual energy demand is twice higher than that of GDP in the 2011-2015 period, which is a challenge to our country. We made effort to promote and improve energy efficiency, especially in the industrial sector in order to ensure the national energy security and environmental protection. Namely, the Law on Economical and Efficient Use of Energy, which has been implemented for nearly 10 years, has achieved some important achievements in the industry such as building the database of key energy-consuming enterprises; promulgating circulars on quota on energy consumption of some important industries such as steel, paper and pulp, beverage, chemical, plastic industry,... However, one of the biggest difficulties in implementing effectively the Law on Economical and Efficient Use of Energy and achieving energy efficiency goals has been to make financial arrangements for energy efficiency investment. To address this challenge, the V-LEEP project will provide technical assistance to commercial banks in evaluation of energy efficiency projects, industrial enterprises and ESCOs when they approach appropriate financial sources".
According to Mr. Do Duc Tuong, Clean Energy Advisor of USAID, the general objective of the USAID's clean energy program in Vietnam is to assist the Government in further developing a low-emission energy system. The industrial sector has played an important role in Vietnam's economic development for more than 15 years and has been also the most energy-intensive sector. Therefore, improving the efficient use of energy will help the country reduce the pressure on energy. Although there have been many studies on industrial energy efficiency, this sector has not been attractive to investors and especially commercial banks have not fulfilled their role in energy efficiency projects.
At the workshop, participants listened to presentations of speakers and discussed issues such as the importance of energy efficiency in green growth, the legal framework on energy efficiency which has been rather complete still has many limitations regarding the implementation of the Law on Economical and Efficient Use of Energy. Industrial enterprises and ESCOs also had the opportunity to present their successful energy management models as well as share their experience in deploying ESCO projects. The implementation of energy efficiency through ESCOs which has much potential faces many obstacles such as the lack of legal framework, difficulties in asking for the bank's loan and difficulties in security for the loan.
Many programs are now giving supporting to the investment in energy efficiency projects in a number of important sectors such as the NAMA program in the textile sector, offering potential energy efficiency solutions and developing plan on deployment of such solutions in the future.
In the future, the World Bank's loan (via the Vietnam Energy Efficiency for Industrial Enterprise - VEEIE) along with a range of support programs such as the GCF's Guarantee Fund for energy efficiency projects and Carbon Finance Fund are expected to promote the development of energy efficiency market. Bank for Investment and Development of Vietnam (BIDV) and Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB), which will disburse money directly to businesses via green credit programs, will stand by businesses in the implementation of energy efficiency projects.
At the workshop, the MOIT listened to opinions of industrial enterprises, ESCOs as well as banks on difficulties in deploying energy efficiency projects. The MOIT, which is a state management agency will cooperate with relevant ministries and agencies in bringing about support policies for the implementation of energy efficiency projects.
The Vietnam Low Emission Energy Program's technical assistance project consists of three components to strengthen the foundation for the low emission energy in Vietnam by supporting the Vietnam Government to develop policies, provisions and incentive mechanism for the low emission energy development and to attract public and private investment in renewable energy development and energy efficiency.
By Office of Cleaner Production and Sustainable Production and Consumption
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