Danish Embassy working with three Vietnamese banks on providing lending to private sector energy efficiency projects.
On June 25 the Embassy of Denmark in Vietnam signed agreements with three Vietnamese banks to support energy efficiency initiatives in the private sector.
The three banks - the Bank for Investment and Development of Vietnam (BIDV), the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), and the Saigon Commercial Bank (SCB) - are committed to supporting small and medium-sized enterprises (SMEs) with loans for energy efficiency investments under support from the Danish Green Investment Facility (GIF).
“Denmark and Danish companies have unique strongholds, know-how, and advanced green technologies that match the current challenges in Vietnam,” Danish Ambassador H.E. John Nielsen said at the signing ceremony. “We hope that our support will help promote substantial energy efficiency initiatives in the private sector.”
SMEs can access loans from these three banks, receiving 50 per cent financial support via bank guarantees for energy saving investment projects. A special attribute of the mechanism is the energy savings award scheme. Companies investing in energy saving solutions can earn rebates from 10 per cent to 30 per cent of their total investment cost upon the achievement of total energy savings. Funds set aside for this support total $6.5 million. The financing mechanism came into effect from January 2015 and will last until June 2017.
“Projects supported by GIF will not only result in improving the energy efficiency standards at SMEs but also provide valuable lessons for energy efficiency initiatives in large-sized companies,” said Deputy Director of the General Energy Directorate at the Ministry of Industry and Trade, Mr. Nguyen Viet Son. “This will ultimately contribute to a greener economy overall.”
Ambassador Nielsen said that he expects that Denmark, via the GIF, will support 100 to 130 projects before the end of 2016.
All GIF-supported energy efficiency projects are expected to reduce energy consumption and costs by more than 20 per cent. As highlighted by an example in the ceramic sector, the Son Ha Ceramic Facility in Hanoi’s Gia Lam district, profit is typically further enhanced by improved product quality and productivity gains. By replacing an old coal-fired ceramic kiln with a modern LPG kiln, the company is able to reduce its energy consumption by 75 per cent and CO2 emissions by almost 85 per cent.