Ministry proposes fund to boost energy efficiency

Ministry proposes fund to boost energy efficiency

The fund would provide preferential loans and interest-rate subsidies to encourage companies to upgrade equipment and improve energy efficiency.

Workers monitor production at a factory using solar power to supplement grid electricity in Đồng Nai Province. — VNA/VNS Photo Lê Xuân

The Ministry of Industry and Trade is drafting a proposal to establish a VNĐ500 billion (US$19 million) fund to help businesses invest in energy-efficient technologies, reduce energy costs and enhance competitiveness

The fund would provide preferential loans and interest-rate subsidies to encourage companies to upgrade equipment and improve energy efficiency, as exporters face stricter carbon-emissions requirements in international markets, including the European Union’s Carbon Border Adjustment Mechanism (CBAM).

Under the proposal, the state budget would provide the fund’s initial capital over 2027-29.

Interest rate subsidies could reach two percentage points annually, while loans could run for up to 10 years, with grace periods of up to two years.

The fund would channel financing through credit institutions. Lending for an individual project would be capped at 70 per cent of its total investment cost.

Đặng Hải Dũng, deputy director of the Ministry of Industry and Trade’s Department of Energy and Petroleum, said businesses continued to face difficulties securing financing to turn energy-saving solutions into specific investment projects.

The fund would operate on a non-profit basis and cover its operating costs from lawful revenue sources, without regular state budget support.

John Robert Cotton, director of the Southeast Asia Energy Transition Partnership (ETP), said the fund needed a viable financial and governance framework to unlock investment in energy-efficiency projects.

ETP will work with the ministry from September 2026 to August 2027 to assess investment potential, identify financing barriers and recommend funding and operating mechanisms.

The ministry plans to submit the proposal to the prime minister for approval in December 2026. If approved, the fund would begin operations on January 1, 2027, and receive its full charter capital by 2029.  

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