Vietnam Approves Power Plan Requiring USD134.7bn for Transition to Carbon Neutrality

Vietnam’s prime minister has given approval to a power plan, known as PDP8, that aims to secure energy for the country while transitioning from coal to carbon neutrality by 2050, as reported by Reuters on May 15. The plan requires USD134.7bn of funding for new power plants and grids, and its approval may unlock billions of dollars of foreign investment, including USD15.5bn in green-transition funds pledged by the G7 nations and other wealthier countries. The plan includes a target for half of office buildings and homes in Vietnam to be powered by rooftop solar panels by 2030, and a target of 5-10 GW of green energy for exports by the same year.

The draft plan, seen by Reuters, shows that power plants using domestic gas and imported liquefied natural gas (LNG) will be the main source of power generation, followed by coal, hydropower, wind energy, and solar power. To complete the transition to carbon neutrality by 2050, the government estimates it needs USD658bn, with one-fifth of that required this decade. The PDP8 plan has faced delays due to internal disputes and complex reforms, with over a dozen draft versions before receiving approval from Prime Minister Pham Minh Chinh. The plan still requires formal approval from the parliament, which may happen this month. The plan’s approval is crucial to unlock the USD15.5bn in green-transition funds pledged to Vietnam by the G7 nations and other wealthy countries. However, negotiations have been slow due to Vietnam’s reluctance to accept loans, which make up the bulk of the public funds promised.

Sources:

https://www.reuters.com/business/energy/vietnams-pm-approves-135-billion-power-plan-2030-2023-05-15/

https://vir.com.vn/pdp8-approval-faces-further-delays-101650.html