Japan funds $300 million to support green transition

At the workshop “Next-generation ODA - Policy loans for green transition towards green growth and climate change adaptation” on March 18, Deputy Minister of Finance Tran Quoc Phuong emphasized that Vietnam has a very high financial demand to achieve green growth goals.

It is estimated that the total capital required for emission-reduction measures by 2030 will reach USD 68.75 billion, of which domestic resources can cover only about 36%, with the remainder depending on international support.

In 2025, the Ministry of Finance, in collaboration with the Embassy of Japan in Vietnam and the Japan International Cooperation Agency (JICA), developed the program “General Budget Support for Green Transition Towards Green Growth and Climate Change Adaptation”, valued at 50 billion yen (over $300 million).

The main goal of the program is to support the implementation of strategies and policies aimed at green growth and climate change adaptation in Vietnam. This initiative is not only an additional source of funding but also a tool to promote institutional development, laying the foundation for the mobilization and efficient allocation of green capital flows within the economy.

The program is structured around 25 key policy actions, focusing on three pillars: establishing financial mechanisms for the green transition, implementing emissions-reduction commitments under the NDC, and strengthening climate resilience.

Among these, the financial solutions pillar takes a central role, including reviewing tax policies, improving public investment mechanisms, promoting the green bond and green credit markets, and gradually developing a carbon market. At the same time, environmental criteria and green project certification mechanisms are being developed to ensure capital is allocated in the right direction.

Additionally, energy and environmental policies are being refined to support the green transition, from amending the Electricity Law and promoting renewable energy to developing a circular economy and improving waste management. These reforms reflect Vietnam’s gradual shift from a traditional environmental management approach to operating a market-based green economy.

Thanks to close cooperation between the two sides, the official exchange for the loan has been approved by both governments and is expected to be signed in March 2026.

“This is an important result, concretizing the high-level leadership commitment of both countries to promote green transition cooperation, especially next-generation ODA collaboration. It reflects the spirit of concessional loans with simpler, more flexible procedures to support Vietnam’s priority sectors,” said Deputy Minister Tran Quoc Phuong.

Sharing the same view, Japanese Ambassador to Vietnam Ito Naoki noted that the upcoming program opens opportunities to apply advanced technologies, such as artificial intelligence and satellite data, to green transition projects in Vietnam, thereby improving policy implementation and climate resilience.

Ambassador Naoki also emphasized that signing the loan is not the end but the beginning of new cooperative initiatives. He expects both countries’ agencies to soon translate project proposals into practice, applying technology to contribute meaningfully to the Asia Zero Emission Community (AZEC) initiative.

Amid increasingly complex climate change, adaptation and resilience measures are deeply embedded in the program. Policies on disaster prevention, post-disaster recovery, and capacity building are being enhanced, reflecting a shift from reactive responses to proactive risk management.