Denmark committed to supporting Vietnam’s sustainable development

11:23 | 08/12/2015
Denmark Ambassador to Vietnam John Nielsen gives an account of the Danish success story and his country’s current strategic focus of assisting Vietnam down the path of sustainable development.

The Embassy of Denmark has chosen ANZ as the Fund Holding Bank to provide financial support to Vietnam’s SMEs investing in energy saving projects

Denmark is globally known as a green nation and is often highlighted for its leading role when it comes to green growth and the use of green technology. Following its spectacular achievement in “turning green”, Denmark is now actively promoting green development and sustainability in the developing world, once again setting an example to follow.

The green-turn of Denmark

Denmark has for more than 30 years managed to sustain economic growth without increasing energy consumption while at the same time reducing CO2 emissions. In this sense, Denmark is a prime example of economic growth and social development going hand in hand with the greening of the economy. Creating a sustainable society based on renewable energy is one of the top priorities of the Danish government.

Denmark is the first country in the world to actively pursue a strategy of building an energy system independent of fossil fuels. In 2012 renewable energy – solar, water and wind power – covered almost 40 per cent of the electricity consumption and almost 25 per cent of the total energy consumption in Denmark. The Danish government’s target is to get 50 per cent of electricity from wind power by 2020 and to rely 100  per cent on renewable sources of energy by 2050. Recent developments indicate that we are moving faster than anticipated towards this goal.

The government and the private sector look back on a peculiarly successful path of cooperation in turning the economy around and incentives from the government have stimulated the birth of many innovative Danish companies focusing on clean technology within wind, water, solar, biomass energy etc.  production.

Public campaigns have also spurred awareness among the population about green living and healthy lifestyles. The Danish cycling culture is one example. In Copenhagen, which has been elected as the European Green Capital in 2014, 40 per cent of the capital's population commute to work or school by bicycle.

What can Vietnam learn from Denmark’s green transition?

To turn your economy more green and sustainable requires time and patience. It requires long-term political commitment, where governmental policies facilitate such a transition and creates the necessary incentives for the private sector to invest in the research and development of adequate technology.

How can Denmark support a green transition in Vietnam?

Since 1993, Denmark has provided more than $1.3 billion in grants to Vietnam and among the EU countries Denmark is still by far the biggest provider of ODA grants to Vietnam. 

Environment, climate change and green growth have all been focus areas of Danish development assistance for several years. Denmark was the first donor to support the Vietnamese National Target Programme to Respond to Climate Change in 2009, thus supporting the Vietnamese efforts to combat global warming and improve energy efficiency.

Last year Denmark and Vietnam signed a Comprehensive Partnership Agreement, strengthening and broadening our flourishing cooperation. The promotion of clean technology and activities to combat climate change are important areas in this partnership agreement. 

This is all better seen in the context of two concrete examples of Danish support. The first example is from the wind industry. Here, Denmark has been the earliest bird for decades. Wind energy is a major industry in Denmark encompassing more than 350 companies and employing around 30,000 people. Recently, the Danish Embassy hosted a seminar where globally  leading Danish wind Energy Company Vestas and Danish financing institutions presented financing options and best practices on how to make wind a sustainable and viable energy solution for Vietnam.

The demand for energy is expected to increase across all sectors and industries in Vietnam in the coming decade. Vietnam will therefore have to implement sustainable policies which promote the use of renewable energy, energy efficiency and the introduction of cleaner technology if it really wants to promote a greener economy.

The second concrete example is the Danish commitment to further support investments in energy efficiency in Vietnam with $11 million. The investment will target small and medium sized enterprises (SMEs) which, although being the backbone of the economy, have paid little attention to energy efficiency so far.

Vietnamese SMEs account for some 40 per cent of industrial energy consumption. Most of the technology used by SMEs are backward and energy intensive which puts a high burden on the economy and environment. To address this problem, the Danish Embassy, in collaboration with the Ministry of Industry and Trade (MOIT), has put in place a financial mechanism whereby SMEs can receive 50 per cent financial support via an ANZ Bank’s guarantee to help them improve their energy efficiency and contribute to a sustainable path of development forVietnamese economy. A special attribute of this mechanism is the energy saving awarding scheme. Companies investing in energy saving solutions can earn rebates from 10 per cent up to 30 per cent of their total investment cost if energy saving targets are achieved.

Finally, it needs to be stressed that there are around 130 Danish companies in Vietnam and a growing trade between the two countries. To further strengthen the trade between our two countries and the relations between our private companies, the transfer of technology, know-how and competencies is a very important priority, which coincides with the objectives when it comes to supporting a transition of the Vietnamese economy to a green and more sustainable economy.

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