Capital flows into green growth projects have still seen positive signals despite adverse impacts from the COVID-19 pandemic on foreign direct investment (FDI) in Viet Nam.
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French development finance organization Proparco recently provided a US$50 million loan for the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) to lend green projects to promote sustainable development. This is the first time HDBank has borrowed capital from the organization but it has started to finance green projects in Viet Nam since 2018.
The International Financial Corporation (IFC) in July gave a US$100 million long-term loan to the Orient Commercial Joint Stock Bank (OCB) to further promote the contribution of the private sector in green and sustainable growth in Viet Nam. The purpose of this credit was to extend lending to small- and medium-sized enterprises (SMEs), especially to promote the financing for climate-friendly projects in Viet Nam.
In May, the Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV) received a 100 million USD loan and technical assistance worth 300,000 EUR (US$366,000) from the French Development Agency (AFD). The capital is used to finance businesses investing in the fields of environmental protection, climate change response, and green growth.
Earlier, a series of banks including the Bank for Agriculture and Rural Development of Viet Nam (Agribank), Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), Tien Phong Commercial Joint Stock Bank, Nam A Commercial Joint Stock Bank also get long-term loans from international financial institutions to fund green growth projects in Viet Nam.
Opportunities to raise capital for green projects
According to the World Bank's assessment, green growth financing projects play a very important role in the sustainable development of Viet Nam in the future.
Meanwhile, the IFC said the implementation of the national target on reducing total greenhouse gas emissions by 9 percent by 2030 to mitigate the effects of climate change will provide a climate investment worth about US$753 billion for the country in the 2016-2030 period.
The green growth trend of international investment organizations is opening up many opportunities for Vietnamese enterprises to call for capital.
A recently released report by HSBC Viet Nam highlighted that Viet Nam's economy, which has developed rapidly over the past decade, is a fertile land for investors who are seeking growth.
HSBC assessed climate change initiatives and green finance programs in Viet Nam are still in their infancy, but this frontier market is gradually catching up with governance and social factors. For example, in the renewable energy sector, Viet Nam is recording the highest level of investment in renewable energy in the Association of Southeast Asian Nations (ASEAN) region./. VNA
