Prospects for Việt Nam - GCF cooperation
Nguyễn Thị Diệu Trinh
Department of Science, Education, Natural Resources and Environment
Ministry of Planning and Investment
By the end of June 2018, Việt Nam was one of the ten Asian countries (Out of 33 countries in the region) to successfully access funding of the Green Climate Fund (GCF). Accordingly, Việt Nam has two projects out of a total of 18 projects in Asia already received funding from GCF with a total amount of USD 116.1 million (accounting for 15% of GCF’s funding for the region) and a Readiness support project to access the GCF out of 19 GCF funded projects in 19 countries in Asia.
ABOUT THE GCF
The GCF was set up in 2010 by the parties to the United Nations Framework Convention on Climate Change (COP16) in Cancun, Mexico to mobilize funding sources for investment in low-emission development and climate change response in developing countries. GCF's strategic areas include: Energy, transportation, construction, urban, industry and equipment; Land use, land-use change and forestry (LULUCF); Strengthening the resilience and welfare of vulnerable communities and areas; Improving the quality of health care, welfare, water and food security; Enhancing the resilience of infrastructure and the environment; Enhancing the resilience of ecosystems and ecosystem services. The GCF Board consists of 24 representatives from developing countries and developed countries.
As of April 2018, GCF has gathered pledges worth USD10.3 billion and raised USD10.2 billion, is aiming to raise USD100 billion by 2020 to implement the global agreement on climate change. This is a new financial mechanism established and operated in 2013. However, it is expected that in the coming time, GCF will be the important and unique financial mechanism on the basis of merging existing financial mechanisms to implement United Nations Framework Convention on Climate Change (UNFCCC).
Countries can access GCF through public-private partnerships (Direct access); multilateral, bilateral, national or regional organizations accredited by GCF, such as United Nations organizations or financial institutions (Indirect access). The purpose of these approaches is to create concrete catalysts for public-private partnerships in climate change, in addition to providing traditional support such as official development assistance (ODA), non-refundable financial assistance, and loans. Therefore, some areas and communities can access GCF in both adaptation and mitigation (50/50).
Organizations (For both direct and indirect access) must demonstrate appropriate capacity in financial management and meet GCF's credit requirements relative to the size of the programs or projects as well as the ability to manage and assess environmental impacts and social security in the implementation of climate change activities.
VIỆT NAM - A BRIGHT SPOT IN COOPERATION WITH GCF
To coordinate GCF activities, the Prime Minister assigned the Ministry of Planning and Investment (MPI) as the National Designated Authority (NDA) for the GCF and related issues. MPI has actively participated in dialogue activities and cooperated with GCF on policy structure and opportunities to support Việt Nam in responding to climate change and investing in low-emission development.
In June 2016, Việt Nam became one of the first countries in Asia to receive USD 29.5 million as funding from the GCF through the United Nations Development Programme (UNDP) for the Project “Improving the resilience of vulnerable coastal communities to climate change related impacts in Việt Nam” jointly implemented by the Ministry of Agriculture and Rural Development and the Ministry of Construction.
On 16 June 2017, GCF officially approved a funding of USD 300,000 to Việt Nam through the Việt Nam Readiness Support Program to strengthen the capacity of NDA in Việt Nam in the process of developing a national strategic framework and coordinating more effective cooperation with GCF. MPI has finalized the procedure to receive the funding and this has officially come into operation since January 2018.
On 16 March 2018, the GCF Board approved a funding of USD 86.3 million, of which USD 11.3 million is non-refundable aid for the Scaling Up Energy Efficiency for Industrial Enterprises in Việt Nam Project jointly developed by the Ministry of Industry and Trade and the World Bank. In addition, MPI is actively working to support some local organizations to become GCF-accredited Việt Namese organizations.
With these achievements, by the end of June 2018, Việt Nam is one of 10 Asian countries (Out of 33 countries in the region) to successfully access GCF funding, Việt Nam, specifically Việt Nam has 2 projects out of the total of 18 projects in Asia already received funding from GCF as of USD116.1 million (Accounting for 15% of GCF's funding for the region) and 1 GCF Readiness support project of 19 GCF funded projects in 19 countries in Asia.
Currently, the MPI is continuing to work with line ministries, GCF-accredited organizations operating in Việt Nam (17 organizations) to develop a priority project portfolio with total value of about USD2.2 billion of which GCF funding is estimated at USD 780 million for activities on climate change response, risk mitigation and low-emission development in Việt Nam to attract funding support from GCF. MPI is currently providing 4 No Objection Letters to the four proposals for GCF funding, including two global and regional proposals initiated by IFC and IUCN and two proposals for Việt Nam developed by UNDP and FAO.
POTENTIAL FOR EFFECTIVE COOPERATION WITH GCF
In recent years, Việt Nam has actively cooperated with GCF to unlock the climate finance for the implementation of the Việt Nam Green Growth Strategy (VGGS), climate change and Nationally Determined Contribution (NDC). Milestones and collaborative activities are expressed in many aspects: High-level and technical visits and exchanges between Việt Nam and GCF have been made and brought about many benefits for both sides.
In April 2018, the GCF selected Việt Nam as the co-host of the GCF Structure Dialogue with Asia with the participation of 7 Ministers from other countries and more than 200 representatives of NDAs, GCF-accredited entities (AEs) and other stakeholders in Asia.
Results of the Việt Nam - GCF cooperation dialogue and the GCF Executive Director’s visit to Việt Nam in June 2017 with the Signing ceremony of the readiness funding between the MPI Minister and the GCF Executive Director in Songdo (South Korea) in August 2017 confirmed the close cooperation and opened many new directions for developing cooperation between Việt Nam - GCF. This is also an opportunity to show to donors and partners about the ability and potential of Việt Nam in development cooperation.