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Suggested citation:
Nguyen, T. C., A. T. Chuc, and L. N. Dang. 2018. Green Finance in Viet Nam: Barriers
and Solutions. ADBI Working Paper 886. Tokyo: Asian Development Bank Institute.
Available: adb/publications/green-finance-viet-nam-barriers-and-solutions
Please contact the authors for information about this paper.
Email: ngoc.dangle@hvtc.vn
Trong Co Nguyen is director at the Academy of Finance, Ministry of Finance, Ha Noi.
Anh Tu Chuc is an associate professor also at the Academy of Finance, Ministry of
Finance, Ha Noi. Le Ngoc Dang is a faculty member of the International Finance
Department, Academy of Finance, Ministry of Finance, Ha Noi.
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2018 Asian Development Bank Institute
ADBI Working Paper 886 Nguyen, Chuc, and Dang
Abstract
Viet Nam’s energy sector has made considerable strides in recent years in achieving
high percentage of nationwide electrification and a relatively diversified energy mix that
is dominated by hydropower, followed by gas and coal. However, sustaining those
achievements including addressing gradually depleted domestic resources, keeping pace
with growing energy demand from the energy-intensive economy and meeting ambitious
climate change targets under the Nationally determined contributions in Paris Agreement
need to call large sums of new investment, particularly in renewables. If those necessary
investments are not satisfied, it will further increase Viet Nam’s dependence on imported
coal to cater its future energy needs with substantial negative environmental, health, climate
change and economic consequences. Based on the existing challenges, the authors make
recommendations including establishing more conducive conditions for private investment
and strengthening the domestic funding environment through a functional financial market.
Keywords: renewable energy, green finance, energy security, Viet Nam
JEL Classification: F21, H23, Q42, Q54, Q58
ADBI Working Paper 886 Nguyen, Chuc, and Dang
Contents
1. INTRODUCTION ......... 1
2. MOTIVATIONS FOR ACCELERATING GREEN ENERGY DEPLOYMENT
IN VIET NAM ... 1
2.1 Diversification of the Energy Mix and Energy Self-Sufficiency1
2.2 Higher Energy Efficiency and Lower GHG Emissions . 5
2.3 Unleashing the Substantial Untapped Potential of Renewable Energy ........... 7
3. FINANCING FOR RENEWABLE ENERGY IN VIET NAM ...... 8
3.1 Key Policy Regulations Related to Renewable Energy Financing ...... 8
3.2 Renewable Energy Investment in Viet Nam .... 9
3.3 Financial Incentives for Renewable Energy Projects in Viet Nam ..... 11
3.4 Financial Instruments for Promoting Green Energy Deployment
in Viet Nam .... 13
4. MAJOR CHALLENGES IN FINANCING RENEWABLE ENERGY IN VIET NAM ..... 15
4.1 Inappropriate Energy Pricing Policy .. 15
4.2 Non-preferential Feed-In Tariff .......... 17
4.3 Undeveloped Financial System That Is Inefficient in Funding Long-Term
Loans and Applying Innovative Financial Devices .... 17
4.4 EVN’s Creditworthiness Concern ...... 18
5. CONCLUSION AND POLICY RECOMMENDATIONS ......... 20
5.1 Revise the Energy Price Policy to Result in a More Reasonable
Energy Price and Feed-In Tariff ........ 20
5.2 Increase the Creditworthiness of EVN ........... 21
5.3 Implement Fiscal Policy Reform Discouraging CO2-Intensive Sectors
and Facilitating the Deployment of RE Technology ... 21
5.4 Develop a Wide Range of Financial Vehicles to Facilitate Long-Term
Finance and Risk Mitigation .. 22
REFERENCES ......... 23。。。