Huge potential for social investment in the green transition

Baoquocte.vn. The clean energy transition is opening up many opportunities for social investment. Taking advantage of this, Vietnam needs to apply effective methods to attract socially responsible investors.

The clean energy transition is opening up many opportunities for social investment. (Source: CIEM)

Social investment opportunities are an important aspect of the decision-making process in the energy transition. These opportunities attract investors who are interested in both the social impact of the investment and the potential to generate a return.

Ms. Kitty Bu, Vice President of the Global Energy Alliance for People and the Planet (GEAPP) in Southeast Asia, said that energy transition is a foundation for promoting social investment because it promotes integrated economic development, environmental sustainability and social equity. By switching to renewable energy sources, countries can redesign their energy systems to address energy gaps, reduce greenhouse gas emissions and promote job creation.

Germany’s renewable energy transition (Energiewende) is a prime example. Policies such as preferential tariffs not only encourage the use of renewable energy, but also empower citizens, businesses and municipalities to actively participate in the green economy. This democratized energy system has spurred widespread investment in renewable facilities, reduced dependence on energy imports and created local economic hubs for green jobs and innovation.

The Electricity and Renewable Energy Authority (EREA) in collaboration with GEAPP organized a technical workshop to discuss BESS. (Source: GEAPP)

In Vietnam, the potential for social investment lies in adopting similar community-focused models. Decentralized renewable energy projects, such as solar microgrids, could provide electricity to rural areas, addressing energy shortages while also fostering local entrepreneurship.

These systems allow communities to jointly own and benefit from renewable energy infrastructure, fueling a cycle of reinvestment in education, health care, and local businesses. Furthermore, the renewable energy transition often requires large-scale workforce changes, creating an opportunity for governments to design comprehensive training programs that prepare workers for greener, higher-paying jobs.

The energy transition also attracts private capital and philanthropic investment by integrating with global ESG (environmental, social, and governance) priorities. The money flowing into the process enables the development of projects that prioritize long-term community resilience, whether through access to clean water, improved public health, or infrastructure built to withstand climate impacts.

Prime Minister Pham Minh Chinh received ADB President Masatsugu Asakawa on November 6, 2024. (Photo: Quang Hoa)

For example, GEAPP is collaborating with the Asian Development Bank (ADB), the Rocky Mountain Institute (RMI), and the Vietnam Institute of Energy (IE) to implement Vietnam’s first grid-connected Battery Energy Storage System (BESS) pilot project. BESS is a priority area for attracting investment.

Integrating BESS into the national grid will increase the reliability of the grid and reduce dependence on traditional fuel sources. BESS projects not only contribute to the modernization of the grid but also create job opportunities in areas such as manufacturing, installation, supply and other related industries.

In order to attract investment in green energy, Vietnam has many mechanisms to "give the green light" to investors. During a meeting with ADB President Masatsugu Asakawa in Kunming (China) on November 6, Prime Minister Pham Minh Chinh proposed expanding the scale of ADB's operations in Vietnam in the private sector, supporting businesses to participate more deeply in the global supply chain, and providing capital support to the private sector. Vietnam will develop policies to encourage the private sector to borrow capital from partners such as ADB.

Mr. Masatsugu Asakawa said that as "Asia's climate bank", ADB will continue to support and provide capital for Vietnam to implement development goals, especially energy transition, green transition, digital transformation, infrastructure development, and achieve the goal of net zero emissions by 2050.

It can be seen that by prioritizing social investments in the energy transition, countries like Vietnam can achieve not only decarbonization but also a broader, more equitable economic transition.

Germany's renewable energy transition (Energiewende) is a prime example of attracting social investment. (Source: Hive Power)

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