MINISTRY OF SCIENCE GEF- UNDP

AND TECHNOLOGY

Project: Promoting Energy conservation in

Small and medium scale enterprises in
Vietnam
Results and lessons learnt

NGUYEN BA VINH
PROJECT MANAGER

Sub-regional Workshop for GEF Focal Points in Asia

Hanoi, Vietnam, 10-12 March 2010

1
 Results and lessons learnt in
PECSME implementation

Content:
1. Introduction of PECSME
2. Results of project implementation
3. Lessons learnt

2
 1. Introduction of PECSME

Project name: Promoting Energy Conservation in

Small and Medium Scale Enterprises (PECSME)
Implementing duration: 2006 2010 (5 years)
Total Fund: USD 28,7 million, including:
Globe Environment Facility (GEF) funds: USD 5.5 million
Local and state sectors: USD 3.7 million
Business sector (Banks and Enterprises): USD 19.1 million
o Implementing agency: UNDP VN
o Implementing Partner: Ministry of Science and
Technology - VN

3
 1. Introduction of PECSME

Project objectives:
Remove barriers to application of energy management systems
and EC and EE Technologies => Reduction of GHG emission
500 projects need to be implemented
136.000 TOE need to be saved
537 thousand tons of CO2 need to be reduced for the period 2006
- 2010
o Beneficiaries: Small and medium scale enterprises in 5 sectors:
brick, ceramics, textiles, paper& pulp and food processing.

4
 1. Introduction of PECSME

Program components ( 6 )
o EC & EE policies and institutional support program
o EC&EE communication and awareness program
EC & EE technical capacity building program
EC & EE services development program
EC&EE Financial support program
EC&EE Demonstration and replication program
 2. Remarkable results of project
for the period 2006-2/2010

Support to develop the system of legal documents for

energy conservation promotion:
Energy conservation law is under procedure for

approval by National Assembly

Support Policies on energy conservation have

been issued in more than 11 provinces.

System of agencies/organizations associated

activities in PECSME was set up.

Improve awareness on EC & EE for SMEs, trade
villages and energy efficiency service providers
(EESPs);
 2. Remarkable results of project
for the period 2006-2/2010

o The staff of 25 EESPs trained on energy audit and EC

project consultancy provision; provide training for
more than 1,000 SMEs on EC technology operation;
The Loan Guarantee Fund (LGF) (total capital of US$
1.7 million) has been effectively operated, guaranteed
for 42 SMEs with total value of 27.3 billion of
Vietnames Dong
400 projects have been implemented, 120 projects are
being implemented => savings of 165,000 TOE,
reduction of 643,000 ton CO2.
Formation of energy conservation market: involvement
of SMEs, EESPs, bank/credit institutions, the
government (issued policies and institutional support).
 2. Remarkable results of project
for the period 2006-2/2010

Number of Projects implemented and on-going by industrial sector

Paper and
Total Food pulp
Brick Ceramics Textiles
Projects processing

520 222 109 105 38 46

8
 2. Remarkable results of project
for the period 2006-2/2010

Result of Energy savings and CO2 emission reductions from

implemented projects
Number of Energy saving (TOE) CO2 emission reduction
project have (ton)
been
An Average Total until An average
implemented Total until
project per 12/2010 project per
12/2010
year year

400 156,000 390 643,000 1,608

9
 2. Remarkable results of project
implementation for the period 2006 - March/2010

Results for loans and loan guarantees

Number Total investment Loan Guarantee
of (VND million ) (VND million) commitments (VND
project million)
Total An Total An Total An
Average average average
project per project project
year

42 74,000 1,668 37,000 997 28,000 610

Total fund of LGF is USD 1.7 million x 18,000 VND/ 1 USD => Total capital
of Loan Guarantee Fund is 30 billion Vietnamese dong.
 2. Remarkable results of project
for the period 2006-2/2010

Sector Implemented EC Average Payback Rate of Energy Rate of

solution investment period investment cost energy
level (years) on savings cost
(VND turnover savings
million) ratio (potential)
(Achieved)

1. Brick Replace 3,000 -10,000 34 88% 30-60% 30-60%

traditional kilns
that burning
brick by wood
and coal to
vertical shaft
brick kiln
(VSBK)
 2. Remarkable results of project
for the period 2006-2/2010
Sector Implemented EC Average Payback Rate of Energy Rate of
solution investment period investment cost energy
level (years) on savings cost
(VND million) turnover ratio savings
(%) (Achieved) (potential)

2.Ceremics Replace 500 1,000 34 75% 20-30% 15-40%

traditional kilns
that burning
and drying
ceramic
products by
coal to LPG
kilns and heat
recovery
chamber for
drying
 2. Remarkable results of project
for the period 2006-2/2010

Implemented EC solution Average Payback Energy cost Rate of

investme period savings ratio energy cost
Sector nt level (years) savings
(VND (Achieved) (potential)
million)

3. Textiles Energy management; 286 0.5 -3 4% 15-25%

Improvement of
lighting systems;
4. Food 208 6% 15-25%
Insulation of heating
processing pipes and valves;
Condensate recovery;
Installation of VSD;
5. Paper Replacement of old 664 12% 15-25%
and Pulp motors with new high
efficiency motors;
Improvement of boiler
operation; Overhaul of
cooling machines;
application of cooling
accumulation at off-
peak hours
13
 2. Remarkable results of project
for the period 2006-2/2010

Impacts by PECSME:
Contribution to hunger eliminate and poverty reduction: create jobs
for:
10,000 jobs with labour income from 1.5 to 2.5 VND million per
month .
Reduce environment pollution: 643,000 ton of CO2 emission has
been reduced by 50% coal consumption level decrease from
application of VSBK technology, replace traditional kilns burning
with woods and coals ... By LPG kiln in ceramic sector
Contribution to energy security: 156,000 TOE saved.
Facilitate the energy conservation market transformation that
including different stockholder's involvement: Energy Efficiency
service providers (EESPs), financial providers, SMEs, EC & EE
technology providers, government organizations.
 3. Lessons learnt

1. Project objectives, activities have met the essential

needs of SMEs so they have actively participated in
Reduce production costs, increase productivity and product
quality, enhance competitiveness.
Loans and loan guarantee implementation of project.
2. Technological innovation to save energy is of decisive
significance for SMEs to improve their productivity,
product quality, increasing competitiveness
3. Policies, institutions on EC & EE should been
preceded to create favourable environment for SMEs
to project implementation
 3. Lessons learnt

4. Local governments in participating provinces has played an

important role in assisting EC&EE project implementation in
their areas
Issue local supporting policies and initiatives
EC&EE institutional development
5. Energy service providers - the bridge for SMEs to get EC
technology should get more support for its development.
Enhance EESPs capacity in the provision of turn key
consultancy service for SMEs
Turnkey Technology transfer by implementing Energy
performance contract (EPC)
Loans support and loans guarantee.
Ceramic kiln of 26 m3 at Chu u
The first batch of a ceramic production
household at Bat Trang
Project Evaluation Team of the Government
and UNDP at Bat Trang
Brick kiln with 3 burning chambers at
Hai Duong 3
Demonstration at Binh Duong province
Demonstration at Binh Duong Province
Signing ceremony of MOU on Loan
Guarantee Fund Management
 Brick shape creating assembly at
Demonstration at Binh Duong province
 Project Management Unit Promoting Energy
Conservation in Small and Medium Scale
Enterprises in Viet Nam
Ministry of Science and Technology
--------------------------------------------------------
Address: 65 B T Hin Thnh street, Hai Ba
Trung District, Hanoi
Telephone: (84-4) 39783574
Fax: (84-4) 39783573
Website: www. ecsme.com.vn