Vietnam will need to increase infrastructure spending if it is to succeed in ramping up the transition to net zero, the Vietnam News has reported.
As Vietnam is set to achieve its ambitious goal of carbon neutrality by 2050, at least 60 percent of the country's infrastructure will need significant developments in the coming years, according to the auditing firm PwC.
The Vietnamese government has taken active measures to promote investments in green facilities to support the rapid uptake of electric vehicles, renewable energy and shift away from fossil fuels, said Dang Huy Dong, head of the Planning and Development Institute.
The country is taking the lead in Asia, spending a total of 5.7 percent of its gross domestic product (GDP) on infrastructure, he added.
Infrastructure system, providing all services from power, clean water, transportation, waste treatment to digital connectivity, has been featured as a key factor in Vietnam's master plan for the period of 2021 to 2030 with a vision to 2050, Dong said.
Infrastructure developments will also open up more opportunities for stakeholders and investors in the green sector, said Edward Clayton, partner at Capital Projects & Infrastructure, PwC Vietnam.
Since addressing energy transformation challenges will require strong state orchestration, at least during the development of strategic infrastructure, said PwC experts.
One of the challenges involves the lack of experience and finance in local authorities, which has proved to be a big setback to high-quality infrastructure projects, said Adrian Box, a PwC expert on integrated infrastructure.
He underlined Public-Private Partnerships (PPP) as an effective mechanism to deal with the challenge thanks to its split of risks between public and private sectors.
According to a report by the International Finance Corporation, Vietnam will need 368 billion U.S. dollars or 6.8 percent of the GDP per year, through 2040 to tackle climate change.
The transition to net zero and the new energy landscape require a collective response from the government and the private sector, said the PwC.
Editor: Galia
