Vietnam

The Vietnamese economy is growing faster than many other economies in Asia. However, energy consumption is growing faster still – by up to 10% every year. During peak periods, customer demand for electricity is already outstripping supply. If the country wants this strong growth to continue while benefiting from the anticipated post-coronavirus global boom, it needs an environmentally friendly, reliable and cost-effective electricity supply. This is why Germany is supporting Vietnam to expand its renewable energy sources and improve the efficiency of its transmission grids. Both of these approaches reduce greenhouse gas emissions and harm to the environment. Germany and Vietnam have agreed on renewable energy sources and energy efficiency as areas for action as sustainable energy offers a foundation for competitive, green and pro-poor growth.

Project information - smart power grids (PDF, 229 KB, non-accessible)

Vietnam is among the top five countries in the world mostly heavily hit by the effects of climate change. Severe tropical storms, rising sea levels and changes in precipitation levels and average temperatures are already posing a major challenge for the country.

Adapting to climate change will require a major national effort, especially in the river deltas (Mekong, Red River), plus further expansion of coastal protection and adaptation of urban and rural infrastructure to cope with the direct and indirect effects of climate change. This is why Germany is supporting Vietnam to plan and finance these types of comprehensive programmes.

In Vietnam, huge areas of jungle have been deforested since the 1970s. This led to erosion and local populations suffered from floods or droughts, depending on the season, because without the forests, the ground could hardly absorb any rain. This also had a negative impact on agriculture, which is the main source of income for most Vietnamese people living in rural areas.

Since the mid-1990s, Vietnam has been continually reforesting, which has led to a country-wide increase in forest coverage. KfW Development Bank has been working in the Vietnamese forestry sector since 1995, especially in north and central Vietnam. Since late 2012, it has also been involved in protecting the coast of the Mekong Delta. To date, 100,000 families have benefited from these measures.

They generate an income that is 30% higher than it would be otherwise, which benefits their children’s education. The savings book approach has already proved to be successful: the farmers are allowed to use all wood and by-products. The families’ land usage right is documented in the land register – the “red book”. In return, they undertake to reforest the land and sustainably manage the areas entrusted to them – while the land remains under state ownership. As compensation they receive a “green savings book”, guaranteeing them a savings deposit of up to USD 250 per hectare of successfully reforested or managed area, depending on the type of forest. Interest is paid on this amount and the deposit is disbursed over a period of six to nine years.

Project information – forest protection (PDF, 132 KB, non-accessible)