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  • The Business Case for: Energy Efficiency in Vietnam’s Textile Industry

The Business Case for: Energy Efficiency in Vietnam’s Textile Industry

With annual turnover of US$ 20 billion, equivalent to 15% of the country’s GDP, the textile industry is the second leading export sector in Vietnam after crude oil. Vietnam’s Ministry of Industry and Trade (MOIT) estimates that energy costs in the Textile & Garment (T&G) industry are approximately 12% of the total production costs, or close to US$ 3 billion per a year. However, there remain significant opportunities to reduce energy costs by improving energy efficiency through a combination of equipment replacement, usage management, and other measures, representing savings up to 30% as estimated by MOIT. Therefore, efficiently managing energy consumption in T&G plants could result in savings of nearly US$ 1 billion. This paper examines the benefits of the textile industry in taking part in the Industrial Energy Efficiency (IEE) measures that will lower their overall energy consumption. Doing so not only reduces operating costs, but also protects the industry against future risks by mitigating factors such as increasing energy costs and grid reliability. The author also looks at ways in which The United States Agency for International Development’s (USAID) regional Private Financing Advisory Network-Asia (PFAN-Asia) can support interested parties in raising capital with a range of services that include strategic advisoryand mentoring on the preparation and refinement of IEE proposals as well as other related documentation necessary for investor outreach.

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