The project is highly strategic for Viet Nam as it will contribute to address the overarching problem of reducing the climate funding gap, therefore creating the conditions to achieve national and international climate goals. The specific problems that the project aims to solve are:

• The NDA is not fully operational and stakeholders have limited awareness and capacity to engage with climate finance
• Ineffective planning, tracking and reporting of climate finance
• Low engagement of private sector in climate investment and limited capacity of the banking system to promote and appraise green credit
• Limited capacities to develop concept notes and promote PPPs
• Weak awareness and knowledge-sharing on GCF and climate financing between agencies, sectors and projects

The goal of this proposal is to strengthen capability of the Ministry of Planning and Investment (MPI) and of the Viet Nam Development Bank (VDB) – entity that has become the DAE of GCF since July 2021 - to create an enabling environment to mobilize GCF resources and other international and private climate finance for the implementation of the NDC and national climate policies, and to coordinate its effective planning, spending and reporting. In particular, this project will be directly supporting the implementation of priority measures foreseen in the NDC.

Building on the efforts and achievements of the past decade, the readiness actions foreseen in this proposal will play a transformative role by generating a more attractive environment for international and private investment through the following key actions:

-  consolidate the capacities of the NDA to coordinate climate finance, including management, strategic guidance, oversight, coordination, administrative and operational functions as prescribed by Vietnamese law, and strengthen the capacities of key stakeholders to engage with the GCF;

• improve the transparency, accountability and effectiveness of climate expenditure by developing a roadmap for institutionalizing a tracking system and developing climate budgets, and pilot in two priority sectors and provinces guidelines and project proposal templates to improve the effectiveness of sector-based climate expenditure;
• strengthen the role of the banking system in enabling private investments in green climate resilient projects by removing barriers through a package of preferential lending policies and awareness raising;
• strengthen the mechanisms for stakeholder engagement in planning and implementation of climate finance and further the development of an ambitious GCF project pipeline aligned with country priorities, including the update of the GCF country programme and preparation of two concept notes, with a least one with high potential for PPP;
• improve the capacities and efficiency of VDB for assessment and appraisal of investment opportunities, investment decision making, post- investment management and evaluation for the investment portfolio in the updated Country Program;
• create a climate finance community of practice to increase awareness, facilitate information exchange across sectors and promote multi stakeholder collaboration.