G7 Upgrade $15bn Coal Transition Deal Offer to Vietnam

The G7 group of industrialised nations has made a new revised $15 billion offer to Vietnam to help accelerate its transition away from coal.

Vietnam, one of the world's top 20 coal users, was set to sign up for the so-called Just Energy Transition partnership with the Group of Seven (G7) nations at the global COP27 climate summit in November, but high-level talks fell through before the meeting.

To persuade Vietnam to support the agreement, Western negotiators led by the European Union and Britain have proposed a larger financial package that includes $7.5 billion in public-sector loans and the same amount in private-sector pledges, according to sources.

All three Western officials, who declined to be identified because the discussions were private, said it would be the G7's final offer before a summit of European Union and Southeast Asian nations in Brussels on December 14, which EU officials have repeatedly stated as the new target date for a deal.

The offer has gradually grown from a $2 billion public-funding pledge to an unspecified amount of private support.

If no agreement is reached by next week, it is unclear whether it will be revised further.

It's unclear whether Vietnam would accept the higher offer because its main concerns don't appear to have been addressed.

Because it is traditionally opposed to taking on large loans, the Southeast Asian country requested more grants.

According to one of the sources, there is a "50/50" chance of a deal next week.
Another stated that talks were still ongoing and that final figures could change slightly.

Vietnam's energy security is potentially jeopardised because the G7 plan focuses on renewable energy, which may result in power shortages in the booming country if wind farms or solar panels produce insufficient power.

Following the cancellation of a meeting in Hanoi with top US and EU climate envoys in November, the country's industry ministry circulated a new draught of its long-term power plans, which increased the use of coal compared to a previous version of the same document.