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Press Releases

June 18, 2010

Signing of Japanese ODA Loan with the Socialist Republic of Vietnam
-Promoting Policy Actions to Respond to Climate Change-

Signing ceremony

1. Today, the Japan International Cooperation Agency (JICA) signed a Japanese official development assistance (ODA) loan agreement with the government of the Socialist Republic of Vietnam for up to 10 billion yen for the Support Program to Respond to Climate Change.

2. As the name indicates, the Support Program to Respond to Climate Change was designed to promote measures that address climate change by providing financial assistance. The Program was established after evaluating the Vietnamese government’s implementation of specific policy actions in 15 sectors closely related to climate change. Those policy actions developed from policy dialogues for assisting with the implementation of specific measures for the National Target Program to Respond to Climate Change, a comprehensive policy formulated by the Vietnamese government in 2008 that covers all fields.

3. Since the implementation of the doi moi reform policy in 1986, Vietnam has maintained rapid economic growth, which has brought an increase in the energy demand (end use of consumption); moreover, the volume of greenhouse gas emissions is rising. According to the World Resource Institute (2009), the average annual increase of greenhouse gases between 1990 and 2006 has been 11.5 percent in Vietnam, higher than any other major Asian nation (as compared to 6.5 percent for China and 0.7 percent for Japan). With a particularly long coastline of about 3,400 kilometers, that includes the extensive delta regions, Vietnam stands to be among the nations most impacted by rising sea levels and other effects of climate change. It is expected that this program will contribute to sustainable economic development and the alleviation of climate change through the implementation of measures that ease the effects of warming such as greenhouse gas emission controls and specific responses to the risks of disaster that accompany climate change.

4. In the formation stage of this program, more than 20 aid agencies and non-governmental organizations participated in the policy dialogues with related government ministries. JICA played a leading role in facilitating coordination among donors, which contributed to achieving a high level of transparency throughout the program formulation. Also JICA contributed to the policy formulation in Vietnam by transferring Japanese knowledge and experience. In the energy conservation sector, for example, the law of energy efficiency and conservation supported by Japanese experts has been formulated which promotes the introduction of the energy conservation labeling system. International collaboration and coordination is an important aspect of this program, with the French Development Agency (Agence Francaise de Developpement) providing cofinancing.

5. JICA’s policy is to dynamically implement projects that address the development problems in Vietnam while reinforcing the coordination of JICA’s various ODA modes such as Japanese ODA loans, technical cooperation and grant aid.

Reference

1. Terms and Amounts of Loan

Project titleAmount (million yen)Annual interest rate (%)Repayment Period
(years)
Deferment period
(years)
Procurement
Support Program to Respond to Climate Change (I) 10,0000.25%*4010Untied

* Qualifies for the terms of a Japanese ODA loan whose objective is to respond to climate change.

2. Program summary

(1) Support Program to Respond to Climate Change (I)

Background and Necessity

Since the implementation of the doi moi reform policy in 1986, Vietnam has maintained rapid economic growth, which has brought an increase in the demand for energy demand (end use of consumption). Meanwhile in the energy field, the volume of greenhouse gases being emitted is rising such that Vietnam has the highest rate of average emission increase among major Asian nations between 1990 and 2006. Developing renewable energy and promoting its use, promoting energy conservation, implementing controls to decrease forestland loss and other such measures are thus urgently needed to decrease greenhouse gas emissions.

With a particularly long coastline of about 3,400 kilometers, that includes the extensive delta regions, Vietnam stands to be among the nations most impacted by climate change. Should the sea level rise by one meter, for example, some 11 percent of Vietnam’s population will be adversely affected and the nation’s gross domestic product is forecast to drop by about 10 percent. There is concern that the increasing frequency and seriousness of disasters that will accompany climate change in the future will be primary risk factors to sustainable development in Vietnam.

Objectives and Summary

As this program supports the response of the Vietnamese government to climate change through policy dialogues, it will contribute to sustained economic development by decreasing the risk of disasters due to climate change in Vietnam, specifically by 1) alleviating warming by curbing greenhouse gas emission and absorption, 2) strengthening the capacity to adapt to the adverse effects of climate change, and 3) addressing issues across different fields that relate to climate change.

This loan will provide the financial support necessary to achieve reform in the three key areas mentioned above, and the funds will be allocated to settlement funds needed to import general commodities.

Executing Agency

Ministry of Natural Resources and Environment
Address: 83 Nguyen Chi Thanh, Hanoi, Vietnam
Phone: +84 (4) 8343-911, fax: +84 (4) 8359-211

Planned Implementation Schedule

  • (i) Completion of project: September 2010 – with completion of the loan process
  • (ii) Issuance of letters of invitation for consulting services:
    No hiring of consultants is planned for this project
  • (iii) Tender announcement for initial procurement package for international competitive bidding on project construction:
    No work in conjunction with tendering is planned for this project

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