Developers opt for green growth with EDGE award

09:45 | 19/06/2015
Another three projects by Vietnamese developers were awarded the “Excellence in Design for Greater Efficiency” certification in a ceremony in Ho Chi Minh City last week, raising the total number of EDGE-certified buildings in Vietnam to five.


The EDGE recipients were certified during a ceremony in Ho Chi Minh City last week

The projects in question are the National Housing Organisation (NHO) for its First Home Premium apartment building in the southern province of Binh Duong, the Novaland Group for Orchard Garden Apartments in Ho Chi Minh City, and The Ascent Real Estate Investment (REIC) Limited for The Ascent-Thao Dien Condominiums, also in Ho Chi Minh City.

According to Prashant Kapoor, principal green building specialist at the International Finance Corporation – a member of the World Bank Group – Vietnam is the first market in East Asia where the IFC has introduced the EDGE certification system, which empowers developers to reduce their buildings’ energy and water consumption by 20 per cent while lowering greenhouse gas emissions.

Relative to India and Malaysia, Vietnam is especially sensitive to climate change and environmental issues. Kapoor stressed that “Vietnam is facing shortages of energy and water. And so, Vietnamese developers have adapted to the EDGE system more easily compared to regional peers like Malaysia, where water and energy are used more freely.”

The EDGE system offers free software that highlights “green” technical solutions while showing the extra costs incurred, and the amount of time it would take to recoup such extra costs. As the better design helps curtail energy and water use, this translates to significantly lower utility bills for owners and tenants.

According to Kapoor, between the year 2000 and now, energy consumption in construction has jumped 20 per cent, and as construction is the third-largest energy consumer  of all sectors, it is imperative that practical measures are put in place to curb its rate of consumption.

In developing nations, 10 per cent of a person’s income goes toward energy and water bills. Therefore, saving on these costs can help users allocate extra funds for other necessities, such as tuition fees.

“Eighty per cent of the opportunities for economic use of energy are left open,” Kapoor noted.

Vivek Pathak, IFC regional director for East Asia and the Pacific, said that “Precise and strategic changes can make a big difference in improving the efficiency of buildings, which make up about a third of Vietnam’s total energy consumption.”

SGS Vietnam, a subsidiary of SGS SA – a leading inspection, testing, and certification company headquartered in Switzerland – will serve as a third-party certifier of EDGE in Vietnam. Over the course of the next six years, SGS Vietnam expects to award the EDGE certification to 20 per cent of new construction projects in the country, equivalent to about 70,000 housing units.

This level of penetration will help cut 19,000 metric tonnes of greenhouse gas emissions, and avoid 43,500 megawatt hours of energy use per year by 2021. In monetary terms, this translates to savings of approximately $8 million. “We are seeing strong interest from investors and developers in fulfilling the increasing demand for eco-friendly and resource-efficient buildings in Vietnam,” said Steven Du, managing director at SGS Vietnam.

To encourage more local businesses to embrace EDGE, SGS Vietnam is running a programme to lower the appraisal fees for EDGE certified green buildings, even though this fee is relatively small at $4,000-$5,000.

Using EDGE is proven to bring considerable economic benefits to developers. The project value could grow 10-20 per cent with a mere 2-4 per cent extra investment cost for EDGE certificate green buildings.

A US survey shows that the capital recouping rate of green buildings is much better than that of conventional buildings.

The Nam Long Investment Corporation, a pilot developer who has applied the EDGE certification for its Bridge View Apartments design, has saved energy use by 20 per cent, water use by 22 per cent, and construction materials by 27 per cent. Meanwhile, all these savings cost a mere 2 per cent increase in the project’s construction costs.

Le Hoa Binh, deputy director of Ho Chi Minh City Construction Department, noted that as an innovative and voluntary green building certification system, EDGE improves the living environment and enables developers to easily follow the government’s existing regulations on environmental standards.

“We have proposed that the city management authorities introduce policies to support green building developers, such as shortening investment procedure processing times for ‘green’ projects,” said Binh.

By By Thu Huong

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