The Group of Seven Wealthy Nations (G7), which includes the U.S., and the U.K., is offering to give Vietnam $15 billion in loans to help the country slash its coal use, according to Reuters.
The G7 has pledged to give nearly $7.5 billion in public loans and another $7.5 billion in private sector pledges to push the nation away from coal, towards green energy, Reuters reported, citing three people familiar with the negotiations.
The offer comes after Vietnam, which consumes more coal than Canada and the U.K., backed out of a deal to curb its coal consumption before the United Nations COP27 climate change conference.
The G7’s plan to get Vietnam to sideline coal and embrace green energy could cause blackouts if there is insufficient wind or solar power to keep the country’s power grid running, according to Reuters. Originally, Vietnam was offered $2 billion in public funding and an unknown number of private financing to curb its coal use.
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Coal accounts for over half of Vietnam’s power generation while non-hydropower renewables account for 5% of the country’s electricity, according to Energy Information Administration data. Vietnam plans to keep using coal for the majority of its energy needs until 2030 and will build up to 11 new coal-fired power plants to achieve this, Reuters reported in November.
President Joe Biden and Indonesian President Joko Widodo struck a deal that will send Indonesia, the world’s chief coal exporter, $20 billion over the next three-to-five years to phase out coal production and switch to green energy in order to reach global targets for reducing carbon emissions.
On Nov. 19, the Biden administration and nearly 200 governments agreed to back a framework that would have richer countries compensate poorer nations for damages allegedly caused by climate change, according to the United Nations Framework Convention on Climate Change.
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