GFANZ Establishes Working Group to Support Capital Mobilization for Viet Nam Just Energy Transition Partnership

Recently, in Brussels, it was announced that the Government of Viet Nam will pursue an ambitious national effort under a Just Energy Transition Partnership (JETP) in order to ramp up renewable energy and “accelerate the phasing down of fossil fuels, alongside investment in transition-aligned jobs and industries of the future.”

Recognizing the scale of the investment needed to deliver on these ambitious goals, the International Partners Group (IPG), co-led by the European Union and the United Kingdom, are “committing to mobilize an initial $7.75 billion over a three-to-five-year period to support the Government of Viet Nam in implementation of the Viet Nam JETP.”

Given the importance of ensuring that the leadership shown by the Government of Viet Nam, with the support of the IPG, “catalyzes significant private investment, the Glasgow Financial Alliance for Net Zero (GFANZ), the world’s largest coalition of financial institutions with ambitious science-based commitments to the net-zero transition, confirms today that it will work in support of these efforts, with a particular focus on the mobilization of private capital.”

To this end, GFANZ has established “a Working Group of net-zero-committed financial institutions.” The initial Working Group members – Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, Mizuho Financial Group, MUFG, Prudential Plc, Shinhan Financial Group, SMBC Group and Standard Chartered – have been “working with partners in support of the Viet Nam JETP by identifying barriers to sourcing the necessary private investment, advocating for the reforms necessary to address those barriers, and identifying approaches that could help crowd in private finance at scale.”

The financing needed to support transition “is significant, and it will be imperative that serious levels of private finance are mobilized to meet the ambitious goals laid out in the Viet Nam Government and IPG JETP announcement.”

As firms committed to net zero, GFANZ members – including the named Working Group members – are “seeking to ensure that there are transition-aligned financing opportunities around the world.”

By working through the Viet Nam JETP, these firms, and others with similar levels of commitment “to unlocking transition finance, have the opportunity to significantly increase the amount of finance allocated to transition-aligned companies and projects.”

As part of this announcement, the GFANZ Working Group members “have committed to working closely with the Viet Nam Government and the IPG toward the mobilization and facilitation of at least $7.75 billion in private finance in support of an ambitious transition path and investment plan.”

With collective ambition by all parties, including using public financing catalytically to crowd in private finance, the initial $7.75 billion commitment by the public sector “has the potential to generate significantly more in private finance.”

The commitment is “subject to the involved governments and partners working closely with GFANZ and the private sector to ensure (i) continued progress in improvements to the local and international policy and enabling environment; (ii) the availability and deployment of catalytic public finance, including in structures and forms that can be used to appropriately de-risk and crowd in private finance; and (iii) a robust pipeline of competitively tendered projects that are demonstrably consistent with the JETP’s ambitious transition pathway.”

In the coming months, the GFANZ Working Group will “work with Viet Nam, the IPG, public financial institutions, and other JETP partners to take the next steps needed to implement the vision of the JETP.”

Michael R. Bloomberg, Co-Chair, GFANZ, and UN Special Envoy on Climate Ambition and Solutions:

“Viet Nam has great potential to become a regional leader for clean energy. Through public and private collaboration, we can speed up the investment needed for Viet Nam to meet its climate targets, grow its economy, create new jobs, and improve public health all at the same time.”

Mark Carney, Co-Chair, GFANZ, and UN Special Envoy on Climate Action and Finance:

“Today’s announcement is an important step to unlocking the financing needed to accelerate clean energy investment in Viet Nam. GFANZ will now work to mobilize private capital at scale to help Viet Nam realize its ambitious climate strategy.”

Mary Schapiro, Vice Chair, GFANZ:

“Mobilizing capital to emerging markets and developing economies is critical if the world is to reach net zero emissions by 2050. Today’s announcement in Viet Nam is an important development and the latest example of how private finance can work with governments to secure a cleaner and more sustainable future. We look forward to working with the partners and delivering for the people of Viet Nam.”

Brian Moynihan, CEO, Bank of America:

“The private sector is playing an important role in directing capital where it can have a significant impact on the world’s just transition to a more sustainable future.”

Jane Fraser, CEO, Citi:

“When the private and public sectors work together, we can drive real progress on our climate goals. Today’s announcement is the latest proof point that, with the proper policy measures in place, financial institutions have a critical role to play in mobilizing the capital needed to facilitate the global net zero transition.”

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