Vietnam

In a matter of 30 years, Vietnam has experienced remarkable economic growth. This creates new challenges: responding to growing energy demand, coping with rapid urban development, and training the one million new young workers who enter the labour market every year. Yet these challenges come with an emergency: exposure to natural disasters and impacts of climate change. AFD acts to strengthen the resilience capacity of the country.
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Port industriel de Tan Cang, Vietnam
AFD AND VIETNAM: ASSISTING THE COUNTRY IN ITS PATH TOWARD GREEN GROWTH AND RESILIENCE
Bassin du fleuve Rouge, Vietnam

Challenging climate change

Fisherman near a river

CHALLENGING CLIMATE CHANGE

With more than 3,000 km of coastline, Vietnam is one of the most vulnerable countries to impacts of climate change. The deltas of Mekong and Red River as well as the coastal regions are particularly concerned. Sea level rise, soil erosion, extreme weather events (drought, floods): Vietnam urgently needs to adapt to better resist. 

To cope with this, the Vietnamese government has integrated the fight against climate change into the country’s economic development policy. In response to the country’s request and in line with commitments following the Paris Agreement, AFD is determined to support the development of a low-carbon and resilient path. 

In total, over the period 2006–2017, AFD has granted 829 million euros to Vietnam through 26 projects and development programmes contributing to the fight against climate change. 
We step in on both the adaptation and mitigation aspects:

  • We support "climate" public policies with budget support to the Vietnamese government, co-financing with World Bank and Jica
  • We support the regions that are most exposed to the consequences of climate change and hazards, in order to assist Vietnam in its implementation of climate change adaptation measures.

Developing sustainable energy

Electricity in Vietnam

DEVELOPING SUSTAINABLE ENERGY

Vietnam’s strong growth is leading to a very rapid increase in electricity production, which will be multiplied by 4 in 2030 compared to 2014. For sure, renewable energy development increasingly plays an important role in the master plans, but it remains in a rank behind the high development of coal.

To face this challenge, AFD has financed the hydroelectric plant Huoi Quang (with a capacity of 520 MW) and Proparco, its private sector subsidiary, finances the Phu My 2.2 combined cycle power plant (715 MW). At the distribution level, we have aided electric transport projects in the north of the country and the construction of Pleiku-My Phuoc-Cau Bong high-voltage line. We are also striving to strengthen the power supply in the countryside (Mekong Delta). 

Promoting sustainable urban development

Train in Vietnam

PROMOTING SUSTAINABLE URBAN DEVELOPMENT

Vietnam has experienced very rapid urbanisation in the past 30 years. Its strong demographic growth intensifies this phenomenon and the urban surface keeps increasing. By 2050, cities should be home to 60% of the Vietnamese population. Initially gathered in Hanoi and Ho Chi Minh City, urban development quickly spread to other major cities like Danang and Can Tho and to coastal areas. The challenges are abundant: high urban density, increased air, water and soil pollution, traffic congestion and failure of public transport network.

AFD supports the authorities in the development of urban infrastructure:

  • We have assisted local investment funds for the development of Ho Chi Minh City, Can Tho, Danang and Khanh Hoa.
  • We finance the construction of line 3 of Hanoi underground and participated in the financing of Yen Vien-Lao Cai railway to link to the city of Lao Cai
  • We contribute to the supply of drinking water in several cities of the Mekong Delta. We also support the sewage treatment, flood control and waste management in medium-size cities of central Vietnam.
  • In Huê, we are financing the imperial canal renovation to fight against floods and improve restoration work of the citadel. 

Supporting the productive sector

Professional training in Vietnam

SUPPORT THE PRODUCTIVE SECTOR

In order to maintain dynamic growth and successfully integrate into the regional economic area, Vietnam must continue to modernise its productive sector, by increasing its productivity and its environmental and social performance. AFD steps in to support this transformation by:

  • Supporting the development of a vocational training offer in line with the needs of the economy. This is in order to promote the integration of young people as well as to support the social and ecological transition of Vietnam. 
  • Focusing on environmental and climate-related businesses to enhance environmental responsibility goals and practices. It is also to contribute to the promotion of cost-effective and "efficient" natural resource management. This is how AFD is concerned for energy efficiency. 
  • By supporting local banks to drive dynamism of the private sector, or directly via its subsidiary Proparco.

Acting with civil society

Woman in a Lab

ACTING WITH CIVIL SOCIETY

French NGOs are very keen and active in Vietnam. There are nearly 150 organisations of which 70 are currently conducting projects in the field. These organisations have a positive image among the population. AFD works in partnership with NGOs because of their experience in the field and proximity to the people, particularly in the sectors of education, health and environment. 

Since 2014, we have organised an annual meeting between these different actors in order to facilitate exchanges and to promote better cohesion of international solidarity organisations. Since 2009, we have funded more than 25 projects in Vietnam. 

Our main local partners: GRET, WWF France, French Red Cross, Planète Enfants et Développement, IECD, Batik International, AVSF, Médecins du monde, Entrepreneurs du monde, Enda and Agrisud. 

1.9
billion euros committed for almost 25 years
2
million tonnes of CO2 emissions avoided each year
1 out of 3
Vietnamese benefits from our projects

On the edge of Southeast Asia, Vietnam stretches along the coast of the Indochinese peninsula. With more than 92 million inhabitants, it is one of the fifteen most densely populated countries in the world.

Vietnam has experienced very fast-growing record in the past 30 years. The economic opening and political reforms undertaken in 1986 have given good result. For several years, its annual economic growth has been 6%. As for the poverty rate, it has dropped from 37% in 1998 to 8.2% in 2014. For the so-called "new Southeast Asian dragon," the challenges have changed. These are now linked to its rapid urbanisation, vulnerability to hazards and natural disasters as well as the challenge of climate change.  

That is because Vietnam will have by 2025 more than 100 million inhabitants. A demographic growth that raises many issues. Therefore, we must quickly respond to the increase in energy demand, adapt cities to the increased number of urban dwellers, train the one million new young people who arrive every year on the workforce and improve productivity for global competitiveness. All while guaranteeing the social well-being of the population.

With 3,260 km of coastline and two deltas, the Mekong River to the south and Red River to the north, Vietnam is one of the most vulnerable countries to climate change. In addition, meteorological hazards (rising water levels, floods, drought) affect its coastal regions, cities and agricultural regions, threatening the production and income of the rural population. The country is regularly affected and must adapt by implementing realistic actions. Signatory to the Paris climate agreement, Vietnam has also committed to reduce its CO2 emission by 8% by 2030 compared to the baseline scenario, which could be increased to 25% with support from foreign aid.

Present since 1994, AFD works in close collaboration with the Vietnamese authorities to help the country taking a path of green, inclusive and resilient growth and to fight against climate change. With a wide range of financial instruments combining sovereign, non-sovereign and grant loans, we have financed 84 projects worth nearly €1.9 billion.

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In Vietnam, resilience as seen by young people

During a competition organised by the Youth Union and AFD from August 27 to October 14, 2018, Vietnamese youth from 15 to 35 years old were asked to translate the notion of "resilience" in words and images. There were 400 applicants and 11 laureates were awarded. We met them at the awards ceremony early November in Hanoi.
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