G-7, Vietnam reach $21b climate deal to cut coal use: Sources
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Vietnam is among the world’s top 20 coal users.
PHOTO: REUTERS
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HANOI - The Group of Seven (G-7) industrialised nations will provide US$15.5 billion (S$21 billion) to Vietnam to help the country transition away from coal, two Western sources told Reuters on Wednesday.
The deal will be the third agreement of this type reached by G-7 nations, as pressure mounts on rich, heavy-emitting nations to help poorer countries cope with climate change and transition to cleaner energy.
The group signed similar deals with South Africa in 2021 and with Indonesia in November.
Vietnam, which is among the world’s top 20 coal users, was initially slated to sign the Just Energy Transition Partnership with G-7 nations at the global COP27 climate summit in November, but high-level talks stalled before the meeting
To persuade Vietnam to back the offer, Western negotiators led by the European Union and Britain have repeatedly increased the amount of funding offered to Hanoi.
Half of the agreed US$15.5 billion will come from the public sector and the rest from private investors, sources said, declining to be named because they were not allowed to speak to media.
Only a minor part of the funding will be provided as grants, while most of the public investment will be loans, one of the sources said.
An initial amount of at least US$15.5 billion will be disbursed over the next three to five years, one source said.
The G-7’s deal with Indonesia promised US$10 billion in public funds to shut down coal plants in the country and bring forward the sector’s peak emissions date by seven years to 2030. South Africa was promised US$8.5 billion.
Western countries have pushed for funding to be directed at projects such as offshore wind farms and upgrades to the national power grid in Vietnam.
Vietnam’s Environment Ministry did not immediately respond to a request for comment. REUTERS
