As Vietnam accelerates efforts to reach net-zero carbon emissions by 2050, IFC is providing a $30 million financing package to fund the construction of a waste-to-energy plant in Bac Ninh province.
The support includes a $15 million concessional loan from the Finland-IFC Blended Finance for Climate Program, which was established to catalyze innovative investments with strong development and climate benefits and to unlock private financing for climate-smart projects in developing countries.
The project is also financially supported by the Japanese government under its Financing Program for the Joint Crediting Mechanism (JCM) Model Projects in fiscal year 2021. It is being implemented under the cooperation between the governments of Vietnam and Japan.
The financing package will allow T&J green energy company to develop a modern waste-to-energy plant in Thuan Thanh district, Bac Ninh province.
Waste incineration at the plant is expected to generate about 92,000MWh of clean energy a year, preventing about 600,000 tons of greenhouse-gas emissions over 15 years. The power generated will be sold to Vietnam Electricity Corporation under a 20-year feed-in-tariff power purchase scheme.
T&J green energy company is a joint venture between Thuan Thanh Environment JSC, a Bac Ninh-based recycling company, and JFE Engineering Corporation, a leading Japanese company in the construction and operation of waste treatment facilities.
The plant is expected to begin operations in 2024 and will incinerate 500 tons of municipal and industrial solid waste every day, significantly boosting the province’s current waste treatment capacity.
With about 1.4 million people and 16 industrial parks, Bac Ninh generates over 1,000 tons of municipal solid waste every day. Only 50 per cent of it is treated, mostly through inefficient incinerators without energy recovery or robust emission control.
Nationwide, the amount of solid waste was about 36 million tons in 2019, and this is expected to double by 2030, with more than 60 percent of the waste not being treated or disposed of efficiently.
Against this backdrop, the T&J plant will introduce an environmentally sound waste treatment and disposal solution, helping avoid issues related to soil and groundwater contamination.
“This will be the most modern waste-to-energy plant in Vietnam,” said Vu Manh Tien, General director of T&J green energy company. “With IFC’s funding, the advanced waste treatment solution will help improve the province’s waste management infrastructure, thereby enhancing living conditions for the local population and reducing health risks.”
The new plant also will enable them to address related environmental and public health issues and cater to the growing demands of the industrial parks in the locality.
“Treating waste as a source for clean energy is a sound solution to help solve Vietnam’s urgent waste problem and support the country’s transition to a low-carbon growth trajectory,” said Kyle Kelhofer, IFC Country manager for Vietnam, Cambodia, and Lao.
IFC’s financing of a private waste treatment company will help reduce the burden on the government, accelerating private sector engagement for Vietnam’s critical infrastructure.
In recent years, the private sector of Vietnam has implemented many activities, as well as received a lot of support in its efforts to reduce waste, contributing to Vietnam's shifts to a low-carbon economy.
For example, VPBank has received over $212 million package from IFC to boost climate-friendly projects, the first green loan of IFC to a bank in Vietnam.
About one third of the financing package will be earmarked for climate-friendly projects, creating new options for businesses to obtain green financing at a favorable interest rate.
Founded in 2019, nine leading FDI and Vietnamese companies having high prestige from consumer goods, packaging, retail, and import industries, jointly established Packaging Recycling Organization Vietnam (PRO Vietnam). It aims at making Vietnam green, clean, and beautiful by promoting a circular economic model through more accessible and sustainable packaging collection and recycling process.
Nestlé in Vietnam, including Nestlé Vietnam and La Vie company - members of PRO Vietnam, recently announced its commitment to plastic neutrality by 2025.
It also signed an MoU with the Vietnam Environment Agency, with the aim of promoting propaganda activities, disseminating and raising awareness about environmental protection, and promoting activities on sustainable packaging management.