Attracting international funding for adaptation to climate change is one of the clearest impressions of Vietnam in recent years. Nearly 1 billion USD is not a big funding source for combating climate change lasted for hundreds of years but has highlighted the efforts of all departments and ministries of Vietnam in just 5-6 years.
Attracting more than 1 billion USD
State management on climate change was really started from Decision 158/QĐ-TTg in late 2008, designing the National Target Program to Respond to Climate Change. Shortly, the Danish government supported nearly 40 million USD to implement the program in 5 years (2009-2013).
Seeing the determination of the Vietnamese government, many international donors expressed their desire to cooperate and address the challenge of climate change. In 2009, the international donors in collaboration with the Ministry of Natural Resources and Environment and other concerned ministries and agencies established the Support Program to Respond to Climate Change (SP-RCC). SP-RCC became a critical forum for policy dialogue between the Vietnamese government and international donors. Hereby, a significant source of funding has been invested to build a system of policies related to climate change in the ministries and agencies. Since 2009, the SP-RCC donors in collaboration with the ministries and agencies have developed 219 policy actions to respond to climate change.
According to statistics, in the past 6 years, the SP-RCC has attracted more than 1 billion USD, of which nearly 20 million USD are non-refundable aid; the rest are low-interest loans. Year 2014 is the year with the highest received funds of more than 223 million USD.
Six close international donors of the program are the Japan International Cooperation Agency (JICA), the French Agency for Development (AfD), the Canadian International Development Agency (CIDA), the World Bank, the Export-Import Bank of Korea (K-Eximbank), the Australian Department of Foreign Affairs and Trade (DFAT).
Believing in the effective use and management of funds for climate change, the old and new international donors continue to make commitments for the future. For the program in 2015, there are two donors committing support levels: JICA - 100 million USD and AfD - 28 million USD. The Australian government expects to support technically about 1 million USD...
Requiring a specific financing mechanism for climate change
At the recent meeting between the National Committee on Climate Change with International donors, JICA representative welcomed the efforts of the Vietnamese Government in the use of international funds for adaptation to climate change.
The approval of Prime Minister for the list of urgent projects under the SP-RCC facilitates direct funding for proper purposes. JICA said that this mechanism was an important first step toward building a financial system for progressive climate change in Vietnam, which had separate channels with many incentives.
Additionally, the donors asked the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Natural Resources and Environment to research and identify another financial mechanism to ensure the ministries and agencies accessing to adequate resources to carry policy actions in the framework of the SP-RCC.
To improve the efficiency and effectiveness of the financial mechanism for climate change, JICA proposes to continue to strengthen the system of budget allocation, to establish plans, tracking progress to increase transparency and creditworthiness of the management and execution agencies of climate change projects. It is critical to create trust and attract more international funding.