Collaboration tải bet88 energy transition remain as the focus of climate transition journey

Vietnam has had milestones in climate transition journey in the past two years, from the country's Net Zero commitment made at COP26 to its National Climate Change Strategy, of which collaboration tải bet88 energy transition remain as the focus of this journey, Mr.Tim Evans, CEO of HSBC Vietnam shared at Summit: 3P Green Impact held on August 2.

According to Mr. Evans,collaboration is key. Climate change is something that none of us can fight alone, instead, it requires unprecedented collaboration among us all. Collaboration among individuals, businesses, organisations, sectors tải bet88 governments is crucial for achieving ambitious climate targets.

Second, energy transition is fundamental. Like many other countries, Vietnam’s transition depends on moving to clean energy, at scale. Coal provides around three-fifths of our electricity generation. The recent increase in coal use reflects higher demand resulting from continued economic recovery tải bet88 an uptick in air-conditioning. So net zero requires a thoughtful approach to the responsible early retirement of coal-fired power plants, while increasing electricity supply to meet growing demand, through new clean renewable sources.

"At COP28 last year, I was struck by the political consensus for tripling renewables by 2030 tải bet88 transitioning away from fossil fuels," said Mr. Evans. "Renewables’ role is also emphasised in Vietnam's Power Development Plan VIII (PDP8), with renewables expected to account for more than 30% of the energy mix.The good news is Vietnam's renewable energy potential is huge given its conducive conditions tải bet88 Government's pledge to achieve net zero by 2050. The country's natural resources offer potential to attract more investments into the growing renewable energy sector, but Vietnam should significantly step up engagement from the private sector."

The challenges exist

First, the challenge is decoupling economic growth from emissions, according to Mr. Evans. Economic growth has been closely linked to increased CO2 emissions tải bet88 energy consumption, so if that historic model of growth were to simply continue it would have negative impacts on the natural environment tải bet88 climate. But the good news is that link has already broken in developed economies: US GDP doubled since 1990, CO2 emissions fell.

That link has weakened everywhere: China grown fourteen-fold since 1990, but CO2 emissions have increased five-fold. In India, GDP growth has outpaced CO2 emissions growth by over 50 per cent. China tải bet88 India’s growth is far more energy efficient than Europe’s was historically, benefitting from new technologies. So Vietnam can similarly maintain its fast growth rate while transitioning to net zero. Since 1990, its GDP has been 66 times bigger while CO2 emissions increased 12 times. Banks can finance both sides of that equation: economic growth tải bet88 decarbonisation.

Second, sustainable infrastructure investment is often held back by a lack of projects that are sufficiently attractive to investors.The challenge is the limited supply of bankable projects that meet the risk-return requirements of investors. Besides, it is the lack of harmonisation among taxonomies that makes financing decisions harder. Interoperability tải bet88 consistency around transition tải bet88 sustainable finance would boost investor confidence.

Third, more corporate transition plans tải bet88 comparable emissions data would help banks to assess tải bet88 finance clients’ transition.

Need the support of finance sector

Banks can support Vietnam’s continued growth, through an orderly transition to clean energy, building long-term resilience, while supporting jobs tải bet88 communities along the way.

There are two ways for a bank to do to deliver Net Zeroambition.Most important, it is supporting customers to transition. Second is to transfer capital to where it is needed. This means partnership for systemic change – with governments, philanthropies, tải bet88 civil society.

The ability of banks to participate can be enhanced through partnerships – bringing the necessary stakeholders together to overcome challenges.Just Energy Transition Partnerships (or JETPs) are a leading example.JETPs are multilateral financial agreements, bringing together G7 countries with financial institutions tải bet88 national governments, to accelerate the phase-out of coal, in a way that addresses social consequences.

In 2022, Vietnam signed a JETP agreement with the International Partners Group which consists of developed countries who will provide half of the amount on offer at .75 billion for the country to transition to green energy. Private sector finance, led by the Glasgow Financial Alliance for Net Zero (GFANZ), has pledged to mobilise at least that amount. This will help bridge the investment gap tải bet88 put billions behind Vietnam’s transition.

"However, more work is required to get the model right between the public tải bet88 private sector partners," Mr. Evans said. "In any country where these models are to be successful, national policies must also support a coal phaseout tải bet88 the scaling of renewables, including supportive infrastructure such as power grids tải bet88 smart energy management systems."

Blended finance vehicles such as Pentagreen, a joint venture between HSBC tải bet88 Temasek, could be one possible solution to overcome those bankability issues, combining public tải bet88 private capital towards sustainable infrastructure. This debt financing platform aims to deploy blended finance at scale to unlock tải bet88 crowd in commercial capital for marginally bankable projects to accelerating the development of sustainable infrastructure in Asia, with an initial focus on Southeast Asia.

The primary sector focus is renewable energy tải bet88 energy storage, clean transport, tải bet88 the water tải bet88 waste management sectors. Transactions in other areas such as climate adaptation, agriculture tải bet88 land use, tải bet88 technology-led solutions are likely to be considered in the future.

Most recently, Pentagreen tải bet88 Clifford Capital, an infrastructure financing platform, announced a joint green loan collaboration of million with BE C&I Solutions to catalyse the construction of distributed sustainable bioenergy projects across Southeast Asia tải bet88 India.

"We believe that more can be done to de-risk deals with concessionary capital," Mr. Evans noted. He pointed out that for example, national policy measures could better enable banks to participate through identifying a pipeline of bankable projects. Moreover, establishing national contract structures for wind, solar, tải bet88 other renewables would benefit financial institutions seeking to participate, providing consistency tải bet88 comparable projects to help evaluate risk. Most blended finance is deployed at a transaction level, in a way which reduces replicability.

"Tackling climate change is an urgent tải bet88 complex challenge," Mr. Evans affirmed. "It demands more collaboration, more funds, tải bet88 more collective action now."