Hanoi, December 16, 2021—As Vietnam accelerates efforts to reach net-zero carbon emissions by 2050, IFC is providing a $30 million financing package to fund the construction of a waste-to-energy plant in Bac Ninh province. The aim is to increase the province's waste treatment capacity and reduce its environmental footprint while protecting residents from health risks associated with untreated waste.
IFC's support includes a $15 million concessional loan from the Finland-IFC Blended Finance for Climate Program, which was established to catalyze innovative investments with strong development and climate benefits and to unlock private financing for climate-smart projects in developing countries. The project is also financially supported by the Japanese government under its Financing Program for the Joint Crediting Mechanism (JCM) Model Projects in fiscal year 2021. This project is being implemented under the cooperation between the governments of Vietnam and Japan.
The financing package will allow T&J Green Energy Company Limited—a joint venture between Thuan Thanh Environment JSC, a Bac Ninh-based recycling company, and JFE Engineering Corporation, a leading Japanese company in the construction and operation of waste treatment facilities—to develop a modern waste-to-energy plant in Thuan Thanh district, Bac Ninh province. The plant is expected to begin operations in 2024 and will incinerate 500 tons of municipal and industrial solid waste every day, significantly boosting the province's current waste treatment capacity.
With about 1.4 million people and 16 industrial parks, Bac Ninh generates over 1,000 tons of municipal solid waste every day. Only 50 percent of it is treated, mostly through inefficient incinerators without energy recovery or robust emission control. Nationwide, the amount of solid waste was about 36 million tons in 2019, and this is expected to double by 2030, with more than 60 percent of the waste not being treated or disposed of efficiently. Against this backdrop, the T&J plant will introduce an environmentally sound waste treatment and disposal solution, helping avoid issues related to soil and groundwater contamination.
"This will be the most modern waste-to-energy plant in Vietnam," said Vu Manh Tien, General Director of T&J Green Energy Company Limited. "With IFC's funding, the advanced waste treatment solution will help improve the province's waste management infrastructure, thereby enhancing living conditions for the local population and reducing health risks. The new plant also will enable us to address related environmental and public health issues and cater to the growing demands of the industrial parks in the locality."
Waste incineration at the plant is expected to generate 91,872 megawatt hours of clean energy a year, preventing about 600,000 tons of greenhouse-gas emissions over 15 years. The power generated will be sold to Vietnam Electricity Corporation under a 20-year feed-in-tariff power purchase scheme.
"Treating waste as a source for clean energy is a sound solution to help solve Vietnam's urgent waste problem and support the country's transition to a low-carbon growth trajectory," said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. "IFC's financing of a private waste treatment company will help reduce the burden on the government, accelerating private sector engagement for Vietnam's critical infrastructure."
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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About the Joint Crediting Mechanism (JCM) Model Projects
Ministry of the Environment, Japan has been implementing the Joint Crediting Mechanism (JCM) Model Projects, which provides financial supports covering up to half of the initial investment costs. The purpose of this facility is to financially support the implementation of projects which reduce GHG emissions by utilizing leading decarbonizing technologies in developing countries, and in return, to acquire JCM credits for achievement of Japan's GHG emission reduction and the partner countries' emission reduction target.
