Vietnam has experienced rapid economic growth and industrialisation over the past few decades, leading to an increased demand for energy. This growth has brought several challenges in areas like energy efficiency, renewable energy, energy mix, and sustainable energy. The country's energy infrastructure has struggled to keep up with demand, raising concerns about energy security. At the same time, the existing energy mix, heavily reliant on fossil fuels like coal, poses significant environmental risks, including air pollution and greenhouse gas emissions.

In terms of energy efficiency, many of Vietnam's industries, particularly the manufacturing sector, operate on outdated and inefficient technologies that consume large amounts of energy. There's also a general lack of awareness among consumers and industries about the benefits of energy-efficient practices, compounded by the absence of strict regulatory guidelines and incentives for companies to adopt more efficient practices. When it comes to renewable energy, there are abundant resources like solar and wind energy. However, the initial cost of investment is a significant hurdle, and there is a lack of local expertise in renewable energy technologies. Additionally, the existing electricity grid is not sufficiently robust to handle a significant influx of renewable energy sources, which limits the country's ability to diversify its energy mix quickly. Vietnam's over-reliance on fossil fuels, especially coal-fired power plants, has been the backbone of the country's energy supply but contributes to environmental degradation and climate change. The country is also becoming increasingly dependent on energy imports, which poses a threat to its energy security. The energy mix has not been diversified quickly enough to incorporate cleaner, renewable sources of energy.

Sustainability in the energy sector remains a challenge due to slow policy implementation and a general lack of public awareness and education regarding the importance of sustainable energy. Economic constraints have also hindered the transition to more sustainable energy solutions. Addressing these challenges requires a multi-pronged approach, including policy reform, investment in cleaner technologies, public awareness campaigns, and international cooperation.

Programs like the EU-Vietnam Sustainable Energy Transition Programme (SETP) are intended to address some of these pressing issues and to support the Government of Vietnam (GoV) in achieving a more sustainable energy transition in line with its national objectives, international commitments, and the Sustainable Development Goals (SDGs). The intervention “EU – Vietnam Sustainable Energy Transition Facility (EVSETF)” (hereinafter “the Intervention”) is part of the overall SETP programme with a total budget of 142.000.000 EUR divided into budget support, direct management (Grants) and indirect management with the United Nations Industrial Development Organisation (UNIDO) and the Global Green Growth Institute (GGGI). The Implementing Partner (IP) is a Consortium comprised of Stantec as Lead IP, and SNV Netherland Development Organisation, Centre for Energy, Environment and Resources Development (CEERD) and Danish Energy Management (DEM) as IPs.