Vietnam, WB Sign First Agreement on Emission Reductions Purchase

Vietnam and the World Bank’s Carbon Partnership Facility (CPF) on Dec 20 signed the first emission reductions purchase agreement for renewable energy development. Under the pact, the CPF will purchase carbon credits generated by the WB-funded Renewable Energy Development Project (REDP) under the UN’s Clean Development Mechanism. The CPF, with Sweden, Norway and Spain as Buyer Participants, will buy the first three million metric tons of carbon credits generated through small hydropower development under the REDP, creating a revenue stream for the projects. The REDP, which is a $202-million credit from the WB’s International Development Association (IDA), will address barriers to renewable energy and provide financial support, including carbon revenue from the CPF, to boost the sustainability of Vietnam’s electricity grid. WB Vietnam Country Director Victoria Kwakwa said the carbon credits will help create a revenue stream that can encourage more private investment in renewable energy development in a move to tackle climate change impacts. Deputy Minister of Industry and Trade Le Duong Quang said supporting renewable energy development delivers benefits to the country’s citizens. The agreement will encourage Vietnam to explore other ways of using carbon credits as it pursues its economic development and climate change mitigation goals. (worldbank.org Dec 20, Dai Bieu Nhan Dan – People’s Deputies Dec 23 p2, vov.vn Dec 21)