Vietnam: Renewable Energy Development Program
In Vietnam, the Government recognizes the potential for renewable energy to contribute to the sustainable development of the country, while also helping to close the gap in electricity supply, particularly in rural areas. Expanding renewable energy markets, particularly hydropower, has the potential to generate as much as 7,400 megawatt (MW) of power and green the economy.
The Carbon Partnership Facility is purchasing carbon credits generated by small hydropower development projects supported by the US$202 million World Bank funded Vietnam Renewable Energy Development Project, implemented by the Ministry of Industry and Trade (MoIT) of Vietnam. The results-based climate finance is helping to open markets for small hydropower development, build capacity within local government, and strengthen the country’s environmental monitoring. The program also promotes large-scale sector reform and will build a country’s technical base for reaching Nationally Determined Contributions (NDC) targets.
Between 2013 and 2018, 12 small hydropower plants under the program have generated over 1.1 million certified emissions reductions (CERs) from small hydropower projects and installed a total capacity of 214.5 megawatts (MW). The program is expected to generate a total of about 1.82 million CERs during the contract period.
The program provides an example of tailored World Bank support that best fits client needs, using market-based climate finance solutions to help lower greenhouse gas emissions and providing the needed additional financial incentives for small hydropower investments. The results-based nature of the program also incentivized good practices and efficiencies in operating small hydropower projects, ensuring compliance with environment and social requirements, as well as strengthening community engagement.
In addition, as all the participating small hydropower projects are in remote, rural areas, a portion of taxes collected from the projects are retained by the local governments for improving livelihoods of the local communities. The projects also increased access to electricity and provided jobs for the local communities during project construction and operations of the plants.