Vietnam

The Vietnamese economy is growing by an average 6 % annually, and therefore faster than many other economies in Asia. However, energy consumption is growing even more rapidly at 10 %. At peak periods, demand from customers already exceeds available power. There are regular power outages, also due to outdated power plants and distribution networks which are unable to cover the rising need. If the country is to safeguard its economic boom, it needs an environmentally friendly, reliable supply of power at an affordable price. This is why Germany is supporting Vietnam in expanding its renewable energy capacity, particularly wind power, and in making its distribution networks more efficient. Both approaches lower greenhouse gas emissions and reduce the impact on the environment. Germany and Vietnam have agreed on energy as a priority area, as sustainable energy provides the basis for competitive, widespread, green growth and, in turn, a green economy.

Project example- Fresh wind, clean energy  (PDF, 453 KB, non-accessible)

The more Vietnam becomes integrated in the global economy, the higher the quality required for goods and services. Sufficient, adequately qualified and productive specialist staff are needed for this, especially because Vietnamese industry is orientating itself more and more in the direction of technology-intensive sectors. Yet, at present, only 32 % of workers have undergone corresponding training and only 15 % can provide proof of a formal vocational qualification. Vietnam is therefore faced with a dilemma. On the one hand, there is a lack of qualified workers with practice-based vocational training, on the other hand around 1.4 million entry-level employees flood the job market every year.

In cooperation with the German Gesellschaft für Internationale Zusammenarbeit (GIZ), KfW is supporting the Vietnamese government in expanding its vocational schools in various provinces. KfW is equipping schools and training institutes with machines, equipment, lesson and teaching materials. In doing so, the Entwicklungsbank is focusing particularly on the areas of electronics/electrotechnics, metalworking/mechatronics, information technology and textile manufacturing. Through this measure the Vietnamese government can tailor its vocational training more precisely and boost quality. By 2020, 40 vocational training institutions are to have been developed into expert centres, at an international level of education, under the national training strategy.

In Vietnam huge areas have been deforested since the 1970s. As a consequence of eroded soils, local populations have suffered from floods or a lack of water, depending on the season, because without the forests the ground has hardly been able to absorb water. This has a negative impact on agriculture which is the main source of income for most Vietnamese 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 Entwicklungsbank has been working in the Vietnamese forestry sector since 1995, especially in north and central Vietnam and since the end of 2012 also in coastal protection of the Mekong Delta. To date, 100,000 families have benefited from this measure. On average they generate an income 30 % higher than before, which especially aids the education and training of their children. The savings book approach has already proved to be particularly successful: the farmers are allowed to use all the wood and by-products. The families' land usage right is documented in the land register – the "red book". In return, the families undertake to reforest the land and apply sustainable management to the areas entrusted to them. The land remains in state ownership. As compensation they receive a "green savings book" which guarantees them a savings deposit of 250 US-dollars 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 after six to nine years. Besides the socio-economic successes, environmental effects are also impressive. Soil erosion is declining in the sustainably managed regions, while ground fertility is growing, as is biodiversity. Moreover, there is a greater number of natural habitats with a balanced water supply and a better micro-climate.

Project example - Forest Protection

Project example - Sustainable Urban Transport