In the process of realizing its Net Zero commitments, Vietnam is facing an urgent need to remove financial barriers to energy efficiency and conservation activities. The establishment of the Energy Efficiency and Conservation Promotion Fund is not only a legal requirement under Law No. 77/2025/QH15 amending and supplementing a number of articles of the Law on Energy Efficiency and Conservation (Law 77), but also a strategic step to create a sustainable foundation for the energy audit market and green investment.

In the context of Vietnam accelerating the transition toward a green and sustainable growth model, energy efficiency and conservation have become one of the key policy pillars. Energy auditing, as a technical tool to identify losses, assess performance, and propose energy efficiency solutions, is increasingly recognized as the “gateway” to all energy efficiency improvement programs. However, practical implementation in Vietnam shows that there remains a significant gap between audit results and enterprises’ investment decisions, with financial barriers being the core cause.

The establishment of the Energy Efficiency and Conservation Promotion Fund as a dedicated financial instrument to support enterprises and the market in overcoming capital constraints, technical challenges, and investment risks.

Law 77 for the first time lays the legal foundation for the establishment of the Energy Efficiency and Conservation Promotion Fund as a dedicated financial instrument to support enterprises and the market in overcoming barriers related to capital, technology, and investment risks. Previously, Decision No. 280/QĐ-TTg of 2019 approving the National Program on Energy Efficiency and Conservation for the period 2019–2030 also clearly identified the task of “piloting the establishment of the Energy Efficiency and Conservation Promotion Fund through socialization, sponsorship, and cooperation of domestic and international organizations and individuals,” to save 8–10% of total national energy consumption by 2030.

According to the orientation of the Ministry of Industry and Trade, the Energy Efficiency and Conservation Promotion Fund is designed under a socialization approach, operating with financial independence, without overlapping with the state budget, and without increasing production and business costs for enterprises. The Fund will provide concessional loans, grants, interest rate subsidies, and credit guarantees for programs, projects, and activities promoting energy efficiency and conservation, in which energy auditing plays a key role as a mandatory input.

Emphasizing the role of the Fund in supporting enterprises, Ms. Nguyen Thi Lam Giang, Director of the Innovation, Green Transition and Industry Promotion Agency (Ministry of Industry and Trade), stated: “The Energy Efficiency and Conservation Promotion Fund is expected to be used to support enterprises as well as energy service companies to access loans at preferential interest rates or receive credit guarantees to implement energy efficiency and conservation projects, in order to change technologies and install equipment that increases energy efficiency at energy-using facilities.”

From a market perspective, this statement reflects a common reality: many enterprises, after conducting energy audits, identify significant energy-saving potential but still hesitate to implement solutions due to a lack of medium- and long-term capital or failure to meet commercial lending conditions. In this context, the Energy Efficiency and Conservation Promotion Fund is expected to become a “bridge” between audit results and investment actions, helping transform technical recommendations into real projects.

At the international level, the establishment of dedicated financial funds for energy efficiency has been implemented early by many countries and has demonstrated clear effectiveness in promoting investment and developing the energy audit and ESCO service markets.

In Thailand, the Energy Conservation Promotion Fund (ENCON Fund) was established in 1992 under the Energy Conservation Act, with a stable revenue source from fuel taxes. ENCON operates as a revolving fund, providing a wide range of support from non-refundable grants for research and technology pilots to financial support for enterprises and credit guarantees for energy efficiency improvement projects. According to OECD assessments, the ENCON Fund not only plays a financial role but also serves as a pillar for developing the ESCO market, contributing to the formation of a sustainable energy efficiency ecosystem in Thailand.

In the United States, many states such as California, New York, and Massachusetts have established Clean Energy Funds with stable financing from surcharges on electricity bills or energy taxes. Notably, these funds are often entrusted to semi-public or non-profit organizations for management, ensuring independence and transparency. In California alone, billions of USD are invested annually in improving energy efficiency for public buildings, schools, small businesses, and low-income households through co-financing mechanisms, credit guarantees, and repayment from actual energy savings.

In Europe, Germany is one of the leading countries with a financial support system for energy efficiency through the German Development Bank (KfW) and the Federal Office for Economic Affairs and Export Control (BAFA). KfW programs provide concessional loans and non-refundable grants for enterprises and households, with building renovation programs offering support of up to 40% of investment costs. This approach not only promotes energy efficiency but also creates a stable market for energy audit and technical consultancy services.

Within the European Union, the Energy Efficiency Directive (EU/2023/1791) encourages Member States to establish national funds and financial mechanisms to support energy efficiency investments, with particular emphasis on technical and financial support for capital-constrained areas such as energy auditing and building renovation. According to World Bank studies, revolving fund and credit guarantee models are among the most effective tools to reduce investment risks and mobilize private capital for energy efficiency projects.

In Asia, China has developed a large-scale system of energy efficiency support funds, directly linking the level of financial support to the amount of energy saved. The State intervenes strongly through subsidies, tax incentives, and technical support, thereby promoting the rapid development of more than 6,000 ESCOs operating nationwide.

These experiences show that energy efficiency funds are only effective when three factors converge: stable capital sources, transparent governance mechanisms, and close linkage with the energy audit and ESCO service markets.

From domestic practice and international lessons, the establishment of the Energy Efficiency and Conservation Promotion Fund in Viet Nam should be approached as a long-term institutional project rather than a short-term support instrument. First, it is necessary to promptly complete the subordinate legal framework, clarifying organizational mechanisms, capital sources, project selection criteria, and supervision and reporting regimes. This not only ensures transparency but also builds confidence among international donors, financial institutions, and the private sector to contribute capital.

In terms of resources, the Fund should be designed toward diversification, combining socialized capital, international funding from partners such as the World Bank, the European Union, and climate funds, together with revenues from carbon credits, green bonds, and private investment. This approach aligns with international practices and enables the Fund to operate independently and sustainably.

In particular, the Fund should allocate a clear component for energy auditing, not only supporting assessment costs but also supporting the implementation of post-audit solutions. Integrating financial support with ESCO services, through models that share benefits from energy savings, will help reduce risks for enterprises and promote the professional development of the energy services market.

At the same time, the Fund should play the role of a technical support hub, investing in expert training, standardizing energy audit methodologies, and applying digital platforms for monitoring, measurement, and reporting of savings results. Experience from the EU and the United States shows that data transparency and process standardization are prerequisites for improving investment efficiency and accountability.

Mr. Ma Khai Hien, Director of the Energy Efficiency Research and Development Center (ENERTEAM), believes that Law 77, with its provisions on establishing the Energy Efficiency and Conservation Promotion Fund, if guided fully and promptly, will create a very strong leverage for the market. According to him, the Fund should focus on supporting ESCOs, providing technical assistance, credit guarantees, and human resource training, thereby helping enterprises remove the financial bottleneck—the largest current barrier to implementing energy efficiency projects. At the same time, he recommends the early issuance of a Decree guiding Article 41a on the Energy Efficiency and Conservation Promotion Fund. “The Decree must clearly define the organizational model, capital governance, PPP mechanisms, inspection and evaluation mechanisms, methods of supporting ESCOs, and support for key enterprises. The Fund should be operated under a non-budgetary model, prioritizing international cooperation, green credit, and green bonds to create sustainable capital sources,” Mr. Hien emphasized.

In his role as a consultant, Mr. Mai Van Huyen, Director of GreenDC, believes that for the energy efficiency market to operate smoothly, it is necessary to soon establish a sustainable financial mechanism to remove the biggest bottleneck at present—capital. Accordingly, instruments such as concessional lending and credit guarantee funds for energy service and ESCO projects need to be implemented substantively, helping enterprises and service providers reduce investment risks.

In addition, he proposes developing mechanisms to allocate resources from investment funds to consulting organizations and energy service enterprises, enabling them to proactively invest in and implement energy efficiency projects under a professional and long-term model. This approach both promotes energy efficiency and creates stable financial flows for the development of the energy services market.

The establishment of the Energy Efficiency and Conservation Promotion Fund is not only a legal requirement under Law No. 77/2025/QH15, but also a strategic step to build financial infrastructure for the energy audit market and green transition in Viet Nam. International models from Thailand, Europe, the United States, and China show that when properly designed and transparently operated, the Energy Efficiency and Conservation Promotion Fund can become a powerful lever to mobilize private capital, promote technological innovation, and enhance enterprise competitiveness.

In the context of Viet Nam’s deep integration and increasing pressure from global green standards, the Energy Efficiency and Conservation Promotion Fund, if implemented effectively, will be a critical foundation for translating policy commitments into concrete actions, contributing to the realization of sustainable development and Net Zero goals in the coming decade.