KWPF Grant Supports Low-carbon Rice Farming in Viet Nam

The $1.5 million KPWF grant, “Viet Nam: Facilitating Low-carbon and Green Agriculture Transformation” is providing demand-driven policy and advisory services that contribute to key building blocks of the government of Viet Nam’s overall green transformation program. The grant’s activities focus on enabling a well-designed, high-quality, and national low-carbon rice investment program, addressing knowledge gaps on agricultural promotion, the mobilization of climate finance, and improved institutional capacities.

The KWPF newsletter team was pleased to be able to catch up with the grant’s Task Team Leader (TTL), Guo Li (Senior Agriculture Economist, Agriculture Global Practice, Southeast Asia) to learn more about the grant’s impact to date.  

Question: Tell us about the larger context in which this grant is being implemented: Viet Nam’s overall green transformation program.  What are the components of this program, and what progress has the government of Viet Nam made to date?

Answer: Viet Nam is on an exciting journey towards a greener future. The country’s National Green Growth Strategy for 2021–2030, with a vision to 2050, forms the backbone of the green transformation program. The agriculture sector agenda of this program focuses on four areas:

1. It emphasizes an increase in farmers’ income, national food security, and the development of a low-emission, resilient, and sustainable agricultural sector by formulating and implementing targeted tasks. 
2. It develops and implements projects to protect and restore ecosystems, enhance biodiversity, and increase carbon sequestration. 
3. It promotes market linkages and improves the sector’s competitiveness. 
4. It seeks to accelerate the new rural development, with more communes meeting new rural development criteria.

The government has already made significant progress. Viet Nam has actively committed to net-zero emissions by 2050, aligning its efforts with global climate goals. A significant milestone in this effort was the Prime Minister's approval of the transformational “One Million-hectare High-quality Low-carbon Rice Program” (referred to as “1MHa”), which was announced in late 2023 at COP28 in Dubai. The government is also actively seeking carbon financing solutions through a first-of-its-kind large-scale rice sector carbon finance transaction with the World Bank’s Transformative Carbon Asset Facility (TCAF) program. There is a strong commitment from all levels of government to implement the program and achieve its set targets.

Q: Drilling down a bit, please tell us about the grant’s three components and how they contribute to catalyzing further progress in Viet Nam’s green transformation program.

A: The KWPF grant is structured around three interconnected components, each playing a critical role in advancing Viet Nam’s green transformation program. 

• Component 1: Technical assistance to support the development of a national low-carbon agriculture transition strategy, laying the foundation for transformative change. 

• Component 2: Analytical work and technical assistance to facilitate the execution of this strategy, with a particular focus on the rice sector, a cornerstone of Viet Nam’s agricultural economy. 

• Component 3: Targeted information campaigns to disseminate outcomes from studies, policy research, technical assistance, and the development of the 1MHa program.

Together, these components contribute significantly to catalyzing further progress in Viet Nam’s green transformation program. By addressing key challenges, enhancing stakeholder engagement, and fostering innovation, the grant strengthens Viet Nam’s capacity to meet its National Green Growth Strategy goals, positioning the country as a global leader in sustainable agriculture and climate action—particularly in rice farming.

Q: The Korean Knowledge Partner Institution for this grant is the Korea Rural Economic Institute (KREI), and you are also working with the Global Green Growth Institute (GGGI). Can you share a little bit about how these two partners have contributed to the successful implementation of the grant to date?

A: The contributions of these two partners have been extremely valuable. KREI is a Korea’s top-tier think tank with extensive expertise in agricultural and rural development. It is supporting the grant by introducing Korean best practices in overall agriculture and rural development policies, digital agriculture technologies, and low carbon agriculture development, which can then be tailored to Viet Nam’s context. 

GGGI, as an international NGO in green technical and policy support, has also actively contributed. GGGI is currently developing an ASEAN-wide methane reduction project, of which Viet Nam will be one of the major beneficiaries. The project is focused on the development of enabling policies, technical capacity, and financial resources to reduce methane emissions. These collaborations with Korean and international institutions have facilitated knowledge exchange between Korea and Viet Nam, ensuring that best practices and innovative approaches are shared and incorporated in the grant activity.

Q: Do or will the grant activities leverage larger World Bank lending programs in Viet Nam, or other sources of financing? 

A: Yes, the KWPF grant has been instrumental in developing the IBRD loan proposal and TCAF project to support the government’s 1MHa program. Since its activation in March 2024, among other activities, the grant has supported high-level government events, chaired by the Vice Minister and Prime Minister respectively, to advance the preparation and technical design of the IBRD loan project. 

Over the next twelve months, the grant will finance important technical assistance, knowledge sharing, and capacity building activities to help inform the IBRD project design and accelerate its delivery. In addition, grant funds will be used to support the monitoring, reporting and verification (MRV) methodology and system development, trainings for policy makers and local stakeholders, and development of the project description document (PDD) for the TCAF project.

Q: What are next steps for supporting Viet Nam’s green transformation program, either within the context of this grant or the World Bank more broadly?

A: The next steps involve building on the momentum created by the KWPF grant and aligning efforts with broader World Bank initiatives. The focus of the KWPF grant will be on advancing the preparation of the IBRD loan project, supporting the implementation of the 1MHa program, and scaling up capacity-building efforts for stakeholders. This includes refining the MRV methodology and systems, enhancing carbon finance readiness, and promoting market penetration and branding for low-carbon rice products. In addition, the World Bank is actively seeking additional grant financing to support the non-construction activities of the IBRD project, such as technology transfer, strengthening the capacity of cooperatives, and agricultural branding, as well as strengthening partnerships and capacity building to help the government achieve the targets in its green transformation program.