Under this project, industrial enterprises can access a new line of credit to fund their purchases of energy-efficiency and production-optimization technologies, thus reducing energy consumption and production costs and increasing their overall competitiveness in the domestic and international markets.
With the support of the project, financial institutions and industrial enterprises will be able to prepare, evaluate and appraise energy efficiency projects. This will create a new line of business for financing institutions, providing loans to support industrial energy-efficiency investments, which will enable them to scale up energy-efficiency lending to industries.
“The Government has made strong efforts over the last few years in developing policies and regulations aiming to promote energy efficiency in all sectors”, said , WB Country Director for Vietnam Ousmane Dione.
“Vietnam’s energy sector is facing many challenges due to limited domestic energy resources and the high electricity demand to support economic growth. In this context, implementing and scaling up energy efficiency investments will bring multiple benefits, such as improving the competitiveness of Vietnam’s industrial sector, reducing GHG emissions and avoiding the need for investments in new coal fired power generation”, Mr Ousmane Dione noted.
Funding under this project will be provided to participating financial institutions, which will then lend to industrial enterprises to invest in energy-efficient subprojects.
Of the US$158 million, US$100 million comes from the World Bank’s International Bank for Reconstruction and Development, the financing resource for middle-income countries, and US$1.7 million is from the International Development Association, the Bank’s fund for the poorest countries. The rest of the project’s funding will come from the Vietnam government participating financial institutions, and industrial enterprises.