The fund is envisioned to perform six primary mandates: mobilizing financial resources, wholesale concessional lending, interest rate subsidies,technical assistance, accelerating market transformation, and policy-driven investments.
The proposed energy efficiency fund aims to facilitate concessional financing, technology upgrades, and cost cuts for businesses to enhance competitiveness. (Illustrative image: chinhphu.vn)
The Ministry of Industry and Trade (MoIT) is drafting a scheme to establish a Promotion Fund for Economical and Efficient Use of Energy with a projected charter capital of VND500 billion (over $19 million), according to a report by the Government's online newspaper (chinhphu.vn)
The initiative aims to help enterprises access concessional capital, upgrade technologies, cut energy costs, and sharpen their competitive edge.
According to Deputy Director General of the Energy and Petroleum Authority under MoIT, Mr. Dang Hai Dung, the ministry has executed numerous technical assistance programs under the National Energy Efficiency Program (VNEEP). However, translating efficiency solutions into bankable investment projects remains difficult, primarily due to enterprise financing bottlenecks.
In response to this bottleneck, MoIT is formulating the fund scheme to establish an additional financing vehicle, empowering companies to invest in energy-saving machinery and technologies.
"The proposed fund is designed to dismantle capital barriers. It will be structured as an off-budget state financial fund operating on a not-for-profit basis, while strictly preserving its capital base," Mr. Dung stated.
Under the design framework, rather than relying predominantly on non-refundable grants as seen in several current mechanisms, the fund will deploy financial instruments such as concessional loans and interest rate subsidies. This approach aims to incentivize enterprise investment while ensuring the fund’s financial sustainability.
Under the current proposal, the fund’s projected charter capital of VND500 billion will be allocated from the state budget between 2027 and 2029 via the medium-term public investment program.
The fund is envisioned to perform six primary mandates: mobilizing financial resources, wholesale concessional lending, interest rate subsidies, technical assistance (such as energy audits and workforce training), accelerating market transformation, and policy-driven investments.
Of these, the fund plans to earmark up to 10% of its cumulative annual charter capital for non-refundable support operations, including a 2% annual interest rate subsidy.
Presenting research findings on the fund's operational structure, Dr. Nguyen Thi Mai Anh, representative of the EEI Consulting Consortium, noted that the facility is designed as a non-profit, off-budget state financial fund. Under the proposed blueprint, the Prime Minister will formally establish the fund and promulgate its operational and financial mechanisms.
The fund's capital base will comprise three primary pillars: equity, mobilized funds linked to repayment capacity, and entrusted funds, with the initial charter capital allocated from medium-term public investment capital.