Nordic climate partnership in Vietnam

The initiative aims to demonstrate how developing countries can prepare and implement Nationally Appropriate Mitigation Actions (NAMAs), which make use of international finance and possible new market mechanisms.

The initiative intends to increase Vietnam’s readiness to benefit from international climate finance by exploring and addressing ways to decrease greenhouse gas emissions in the cement sector. The cement sector has been chosen as the pilot sector since it is the largest emitter of industrial greenhouse gases in Vietnam. There are currently approximately 50 cement plants and 100 production lines in the country. The sectors emission reduction potential has been estimated to be significant.

“The project will support practical preparatory work relating to NAMAs and generate insight into new market mechanisms. Vietnam will thus be a forerunner in the field of bringing added value beyond existing mechanisms,” says Martina Jägerhorn, Country Programme Manager at the Nordic Development Fund.

The Asian Development Bank is the partner agency and the Vietnamese Ministry of Construction is the implementing agency. NDF and other stakeholders launched the Nordic Partnership Initiative at COP17 in Durban. Implementation is expected to start during 2012.

The proposed project will explore and address gaps in data availability and quality regarding sectoral greenhouse gas emissions, technical and institutional capacity, as well as potential barriers to implementing scaling up greenhouse gas mitigation actions in the cement sector in Vietnam. Special emphasis will be given to exploring opportunities to utilise new forms of international climate finance, including possible new market-based mechanisms in Vietnam’s cement and constructions sector, implying a results-based approach for provision of future support.

Attention will also be paid to involving the relevant stakeholders and mapping out the cement sector's viewpoint on the functioning of the overall framework.

NDF will finance a technical assistance contract with the following activities:
1) Set up data and a monitoring, reporting and verification system of international standards for NAMA readiness.
2) Identify and design appropriate support instruments for mitigation actions.
3) Identify and address technical, information, and capacity barriers.

The total cost of the project will be EUR 1.6 million, of which NDF will provide EUR 1.5 million, and government of Vietnam, EUR 100,000.