Surveys from 10 businesses, which operate in major industries like textile/garment, leather and footwear, mechanical engineering, energy and electronics, show that 3.2 million kWh of power (roughly VND40 billion) will be saved each year if energy efficiency and conservation solutions are utilized.

Although businesses that utilize energy efficiency and conservation solutions are able to benefit economically and environmentally, the number of businesses using these solutions to reduce production costs remains small.

Big benefits

Energy efficiency and conservation benefits businesses in both the present and future. Companies that practice green solutions can have access to energy efficiency and conservation training, be assisted in energy management and auditing, and borrow capital from banks at preferential interest rates to improve their production.

When participating in the energy efficiency improvement program, small to medium-sized businesses can receive financial assistance worth VND10-30 million in order to support energy audits and the transference of technology. Participating businesses can have 75 percent of its loans guaranteed in this program, with the would-be-guaranteed amount being between VND80 million and VND2 billion. The Ministry of Science and Technology, the United Nations Development Program (UNDP) and the Global Environmental Fund (GEF) finance this program.

Surveys in Hanoi indicate that in 2009, 150 large businesses in the city received guidelines in order to draft energy consumption reports and efficiency and conservation plans. The program assisted 15 businesses with energy auditing and energy efficiency and conservation.

With assistance from the program, brick producers in Phuc Yen have replaced their traditional furnaces with shaft kilns. This technology helps the manufacturers save more than 850 tonnes of coal and almost 17 tonnes of firewood each year. This technology also reduces CO2 emissions by two million kilos and SO2 emissions by 25-30 percent each year.

A seafood processing facility needs to invest only VND40 million in order to save nearly 57,000kWh of energy. With financial aid from the ‘Assisting small to medium-sized businesses in energy efficiency and conservation’ program, Phung The Huynh, owner of a pottery production business in Hanoi, spent VND825 million to replace his old gas-running furnace. This investment has helped his production facility save almost 10,000 kilos of gas and 60,000 kilos of coal. It has also helped decrease his energy costs by about VND100 million each year.

The benefits that energy efficiency and conservation programs bring in for businesses are significant. However, businesses’ awareness of energy efficiency and conservation remains low so the number of businesses participating in such programs is still modest. Many businesses still hesitate to adopt energy efficiency and conservation solutions because the application of such solutions requires investments, while complicated loan procedures serve as a deterrent.

Capital difficulties

Energy efficiency and conservation requires systematic investment. Apart from investing in workforce and idea development, businesses need to invest in improving their equipment and technology, which requires big investments.

A preferential loan is ideal for efficiency and conservation programs, but not all businesses know how to secure this kind of loan. Securing a preferential loan is quite difficult. The difficulty can be blamed on businesses and substandard laws and policies.

Businesses need to take the initiative in looking for capital from other sources inside and outside Vietnam. Experts say that businesses should borrow capital from commercial banks and funds that have concrete preferences related to interest rates and capital mobilization.

However, smaller businesses do not have persuasive projects, while having such a project is one of the most important things for securing a loan. It is ironic that a number of businesses, which are capable of satisfying the bank’s requirements, do not secure a loan because they are unable to provide a proper presentation to the bank. One problem is that the banks are often not willing to finance projects that are too small.

Apart from promoting energy efficiency and conservation through the mass media, providing businesses with energy efficiency training is crucial to expanding conservation. Businesses need assistance from different authorities and organizations so they can invest in technology, manage energy efficiently, and approach preferential credit and efficiently use this credit.  

By Hoang Anh