Budget support refers to the EU’s direct transfer of funds to the national treasury of the Government of Viet Nam. The EU sector budget support is not ring-fenced and should complement the national sector budget to support the country’s overall sustainable energy transition objectives. The EU disburses pre-determined tranches of funding based on the Government of Viet Nam meeting general and specific conditions that were previously agreed upon between the EU and Viet Nam.

The following general conditions for EU budget support must be fulfilled by the Government of Viet Nam before the disbursement of all tranches:

1. Satisfactory progress in the implementation of the energy sector policy;
2. Stable macro-economic framework;
3. Satisfactory progress in the implementation of public finance management;
4. Satisfactory progress with regards to budget transparency and oversight.

In addition, specific conditions for disbursements of budget support are agreed targets measuring the achievement of the SETP objectives (see below).

The SETP budget support payments are made yearly in five tranches between 2022 and 2026.