UK supports Vietnam in developing green bond market

Recently, the British Business Association in Vietnam (BritCham), Prudential Vietnam and the Climate Bonds Initiative (CBI) jointly organized the Workshop “Green Bonds & Transformational Investments in Vietnam” to collect feedback on how to support the growth and development of the green bond market in Vietnam.

Anh hỗ trợ Việt Nam phát triển thị trường trái phiếu xanh

Mr. Tom Thornley, First Secretary for Climate and Nature, British Embassy in Hanoi shared at the Workshop. (Source: British Embassy in Hanoi)

Speaking about the UK Government's participation in the Just Energy Transition Partnership (JETP), Mr. Tom Thornley, First Secretary for Climate and Nature, British Embassy in Hanoi, informed that last March, the UK set a target to halve global emissions by 2030, while promoting climate resilience through net zero emissions and transforming the global economy in a positive direction for the environment.

"The key to achieving this goal is long-term and close cooperation between countries. Typically, the cooperation between the UK and Vietnam in many areas such as research, policy planning and finance" , Mr. Tom Thornley shared.

According to Mr. Tom, the UK and Vietnam have many similar views on climate issues. Both sides aim for net zero emissions by 2050. "The UK is very willing to accompany countries that share the same vision. We have doubled the budget for international climate finance to £11.6 billion to support countries in the period from 2021 to 2026. With this budget, the UK is helping developing countries and emerging economies like Vietnam respond to the challenge of climate change and realise their ambition to achieve net zero emissions," Mr. Tom Thornley added.

At the workshop, stakeholders in the green bond market such as international non-profit organizations, securities companies, local banks, credit rating agencies and Prudential Vietnam's asset management unit - Eastspring Vietnam Fund Management Company - shared information and lessons from the obstacles and barriers in the market in the Southeast Asian (ASEAN) region, thereby drawing experiences for the process of promoting the growth of the green bond market in Vietnam.

In his speech on the State of the Sustainable Finance Market in ASEAN and Vietnam 2022, Mr. Chi Xiang Wong, Senior Analyst on ASEAN of the Climate Bonds Initiative (CBI) - a global fund-raising organization for climate change activities, commented that the diversification of green bond issuance is becoming increasingly popular in the region.

There is growing interest from stakeholders in this area, including policy makers, regulators and the financial sector, in initiatives and efforts to support sustainable finance to promote green growth in Vietnam.

“CBI has seen a number of initiatives from policymakers – for example, the guidelines issued by the Central Bank on environmental risk management in credit extension, along with a handbook on green bond issuance in Vietnam, which was developed by CBI under the authority of the securities regulator,” said Chi Xiang Wong.

Mr. Ngo The Trieu, General Director of Eastspring Investment Vietnam Fund Management Company - the asset management unit of Prudential Group, shared experiences and practical examples on the Sustainable Investment Journey.

According to Mr. Trieu, the financial demand for climate change in Vietnam will soon increase significantly, with a large contribution from private finance. Prudential Vietnam has identified supporting the Vietnamese Government to achieve its goal of net zero emissions by 2050 as its key objective. An important aspect in supporting the transition to a low-carbon economy is investing in sustainable financial mechanisms, of which green bonds are key in the current context of Vietnam.

Delegates and guests had an effective exchange session, with many ideas and solutions proposed to promote the development of the green bond market. The green bond market plays an important role in mobilizing private capital and financing the transition towards net zero emissions in Vietnam.

In December 2022, the Just Energy Transition Partnership (JETP) was signed by the International Partnership Group (IPG), comprising the G7 countries along with Norway, Denmark, and Vietnam, to establish cooperation agreements on the energy transition. The agreement includes commitments from both parties.

On the IPG side, it is a commitment to mobilize financial resources and expertise to support Vietnam. On the Vietnamese Government side, it is a commitment to issue a mechanism to optimize support from IPG. A number of financial institutions are acting under the JETP agreement: Standard Chartered Bank, HSBC, Prudential...

Source