Vietnam has agreed a $15.5 billion climate deal with the Group of Seven (G7) industrialised nations to help pay for its move away from coal-fuelled power, sources said.
The deal will be the third agreement of this type reached by the G7 nations, as pressure mounts on rich, heavy-emitting countries to help poorer countries cope with climate change and transition to cleaner energy.
The group signed similar deals last year with South Africa and last month with Indonesia.
Vietnam, which is among the world’s top 20 coal users, was initially slated to sign the so-called “Just Energy Transition Partnership” with G7 nations at the global COP27 climate summit in November, but high-level talks stalled before the meeting.
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To persuade Vietnam to back the offer, Western negotiators led by the European Union and Britain have repeatedly increased the amount of funding offered to Hanoi.
Half of the agreed $15.5 billion will come from the public sector and the rest from private investors, sources said.
Only a minor part of the funding will be provided as grants, while most of the public investment will be loans, one of the sources said.
An initial amount of at least $15.5 billion will be disbursed over the next three to five years, one source said.
The G7’s deal with Indonesia promised $10 billion in public funds to shut down coal plants in the country and bring forward the sector’s peak emissions date by seven years to 2030. South Africa was promised $8.5 billion.
Western countries have pushed for funding to be directed at projects such as offshore wind farms and upgrades to the national power grid in Vietnam.
- Reuters with additional editing by Sean O’Meara
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