Firms looking to HCMC for green economy investments

At "CEO 100 Tea Connect" on Thursday, Phan Van Mai, chairman of the HCMC People’s Committee, said the city was facing challenges such as climate change, traffic congestion, labor shortages and the impact of the business cycle in economic growth. To overcome them, the city is beginning to restructure itself and make a green economy a key driver for growth.

The HCMC-based event saw 100 CEOs of local and international organizations gather to enjoy specialty tea, as a part of the "Ho Chi Minh City Economic Forum 2023." This was the first time HCMC hosted a professional networking event through the "tea party" concept.

Han Sang Doeg, executive vice president of Samsung Engineering Vietnam, said he’s been observing and considering investing in wastewater treatment and waste-to-energy in HCMC.

His firm also proposed a strategy they called the "integrated environmental complex." It would entail a circular economy, on-site treatment of water, waste and biogas, and self-generated energy rather than power from external sources.

For Han Sang Doeg, starting from the planning stage, Samsung and associated parties must work together to find optimal solutions.

"Upon receiving policy support from the government, we will take responsibility for the entire value chain through promotions, technological applications, investment initiations, and provision of solutions for financial structuring, design, construction and operations management," he said.

Gabor Fluit, chairman of EuroCham, said the European Green Deal (EGD) and the Carbon Border Adjustment Mechanism were providing opportunities and challenges for firms exporting their goods to his region. As a result, the group would be willing to help find ways to operate with legal compliance.

"We hope to assist through technology transfer, model sharing, capacity-building for projects, and from there help HCMC become a center for exports into the EU. In the coming months, EuroCham will host a range of events to get Vietnamese firms to adapt to the EGD," he said.

Nguyen Thi Mai Thanh, CEO of the refrigeration electrical engineering corporation REE, also said HCMC has yet to catch on with the circular economy demand. She also hopes that her firm’s projects will gain approval faster.

REE waited 18 months to determine its location for a 2,000-ton-per-day capacity waste-to-energy plant.

"We can invest in solar power on all the rooftops of offices and schools, and sell electricity at electricity company’s prices," she said.

The three-year-old proposal has yet to be considered.

Some international banks are looking for windows to disburse "green" finance (loans for sustainable development projects) in HCMC.

Tracy Wong Harris, head of sustainable finance in Asia at Standard Chartered, said her bank had a substantial budget for sustainable innovation fields and hoped to work with the city in regard to disbursements.

According to Ramachandran A.S, CCO of Citi Vietnam, HCMC is a center for green finance, with many present multinational companies committed to sustainable growth. However, the private sector still lacks capital for the green economy.

"We plan to provide medium and long-term financing for green projects, ensuring increased competitiveness for manufacturers," he said.

To attract sustainable investment sources and help businesses feel secure when they contribute to the development of a green economy, experts at the event offered their experience and recommendations.

Ricardo Valente, city councilor for economy and finance of Porto City (Portugal) proposed that HCMC create "a circular business riddle for businesses to solve." Accordingly, the best solution will be chosen.

Tax exemption can also be an incentive. "We have built environmental indexes and tax exemptions for companies meeting these indexes," he said.

Ichisaka Hirofumi, director of international relations of Osaka Province (Japan), said that in 1973, this was the first province to implement a management model with clear regulations on environmental factors.

Consequently, Osaka became a pioneer in overcoming pollution problems and maintaining stable growth.

In the immediate future, businesses believe HCMC must provide central ministries and branches the ways to develop standards and criteria considered "green" for each industry.

"HCMC should work with associations and departments to build criteria and legal barriers to turn the textile and garment industry green," said Pham Van Viet, CEO of VitaJean and vice chairman of HCMC’s Garment, Embroidery and Knitting Association.

Le Anh, director of sustainable development of DUYTAN Plastic Recycling, said he hopes the city will have a point agency to troubleshoot for businesses in the recycling sector.

"We also need a set of regulations for recycled goods, and safety standards for recycled products," he said.

Standard Chartered wants the State Bank to create a more favorable environment for green finance.

According to Phan Van Mai, HCMC is drafting a green strategic framework to 2030 and beyond. It is also identifying people and firms as the center of transformation, with a focus on four areas.

First are green resources, including highly qualified human resources, green finance and international cooperation. Second is green infrastructure, including energy conversion, water preservation, and resource circulation. Third is green behavior in consumption, transportation, and construction. Fourth are industries and fields pioneering green transformation such as high-tech manufacturing, startups, innovations, tourism, agriculture, food and turning Can Gio District into a green destination (being carbon neutral by 2035).

Mai said currently HCMC had some clusters of issues in need of suggestions from experts and businesses.

First is energy conversion. Currently, the city consumes about 90 million kWh daily, with external sources being the main supply. Thermoelectricity and clean energy only generate 7.6%. HCMC’s goal is to have 25% clean electricity by 2025 and 35-40% clean electricity by 2030. Hurdles for this reside in policies, institutions, capital, and technology.

Second is green transportation. The inner-city traffic system is dominated by personal vehicles, mainly motorbikes. HCMC had 777 motorbikes and 81 cars per 1,000 people in 2019. The work here is to reduce the number of personal vehicles.

Third is waste and wastewater treatment. Every day, HCMC generates about 9,500 tons of solid waste, with an average of 0.98 kg of household waste per person per day. Current issues remain policy, capital, and technology.

Fourth are carbon credits. The city needs expert advice on legal issues, pilot models and ways to operate.

HCMC’s chairman said the city will heed comments at the "tea party" to complete the green development strategic framework to 2030, this September.

"We will also propose to issue standards based on research of international standards governing production, consumption, and green development activities," he added.