HCMC – The World Bank board of executive directors on June 5 approved a US$84.4 million credit to support multi-sectoral policy reforms by the Government of Vietnam to promote climate-resilient landscapes and green transport and energy systems.
The global lender said in a statement that the Climate Change and Green Growth Development Policy Financing aims to consolidate and expand on the achievements of the Government’s Support Program to Respond to Climate Change 2016-2020, or SP-RCC.
This includes supporting policies that should lead to increased protection of water sources, application of water-saving practices over larger areas of farmland, additional reductions in vehicle emissions, and further scale up of renewable energy.
“The new development financing will focus on areas which present the greatest opportunities for transformational interventions to address climate change challenges,” said Ousmane Dione, World Bank Country Director for Vietnam.
“It reflects our strong commitment to help Vietnam maintain the momentum under SP-RCC while building a bridge to a new, post-2020 phase of climate action,” he added.
The program will support the Government’s climate mitigation actions by strengthening the resilient management of landscapes and natural resources and effective management of related public investments.
These efforts include climate smart landscape planning (particularly for forests and the Mekong Delta), climate budgeting, and improving water resources protection and use efficiency.
The program will also facilitate efforts to promote cleaner transport and energy systems to reduce greenhouse gas emissions and address air pollution.
These policy reforms include the establishment of more stringent vehicle emissions standards, adoption of a new national energy efficiency program and enhanced incentive mechanisms to increase the nation’s wind generation capacity.
The Government established the SP-RCC to lay the foundations for Vietnam’s delivery on its national climate commitments under the Paris Agreement – the Nationally Determined Contribution set in 2016 to be implemented from 2020.
These commitments include cutting greenhouse gas emissions by 8% below business as usual between 2020 and 2030, and up to 25% conditional on international support, and a variety of adaptation targets, including mainstreaming climate planning in 90% of long-term socio-economic development plans.
The program will also support Vietnam’s COVID-19 response through highly concessional budget support and by supporting policy reforms that will contribute to the national pandemic response.
This includes improving forest management, which helps reduce the risk of emerging zoonotic disease, and increasing investments in natural resources management and climate adaptation, which complements an economic stimulus package aimed at supporting rural incomes and community resilience.
The credit is made available by the International Development Association through recommitting IDA funds that have been saved from existing World Bank’s projects in Vietnam since July 2019.
By Gia Phong