(MPI) - On September 10, 2024, in Hanoi, the Journal of Economics and Forecasting, Ministry of Planning and Investment, organized the Forum “Realizing the National Strategy on Green Growth in Vietnam: Promoting Green Capital Flows” with the aim of providing policy information, as well as specific support conditions from state management agencies for efforts to promote green capital flows, in order to realize the National Strategy on Green Growth in Vietnam.
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| Ms. Do Thi Phuong Lan, Editor-in-Chief of the Journal of Economics and Forecasting, and Dr. Vo Tri Thanh, Director of the Institute for Strategic Brand and Competition Research, chaired the Forum. Photo: MPI |
In her opening remarks at the Forum, Ms. Do Thi Phuong Lan, Editor-in-Chief of the Journal of Economics and Forecasting, shared that Typhoon Yagi is a prime example of the increasingly erratic and severe nature of climate change, and also demonstrates the ferocity of natural disasters.
Vietnam has identified responding to climate change as one of its key and urgent tasks. On October 1, 2021, the Prime Minister issued Decision No. 1658/QD-TTg approving the National Strategy on Green Growth for the period 2021-2030, with a vision to 2050. The goal is for green growth to contribute to restructuring the economy, fostering innovation in growth models, achieving economic prosperity, environmental sustainability, and social equity, moving towards a green, carbon-neutral economy, and contributing to the goal of limiting global temperature increase.
To achieve its green growth goals, Vietnam needs substantial resources. According to estimates by the United Nations Development Programme (UNDP), Vietnam needs approximately US$330-370 billion to meet its net-zero emissions commitment by 2050. According to the Ministry of Natural Resources and Environment, the financial needs for emission reduction measures in each sector, as per Vietnam's environmental commitments by 2030, are estimated at US$68.75 billion. Of this, national self-funding is projected at approximately US$24.722 billion (36%), while the need for international support is estimated at US$44.028 billion (64%). In particular, Vietnam needs even more resources to meet its climate commitments as outlined in the 26th United Nations Climate Change Summit (COP26), in order to adapt to climate change and achieve national green growth and sustainable development goals. Therefore, effectively mobilizing and allocating domestic and foreign financial resources from various sectors of the economy is crucial and urgent in order to meet green growth targets and move towards sustainable development.
The financial resources driving green growth in Vietnam have been identified in the Green Growth Action Plan 2021-2030 (Decision No. 882/QD-TTg of the Prime Minister dated July 22, 2022), including resources from the state budget; resources from the private sector; resources from international support (ODA, grant aid and concessional loans for green growth); and other social community resources.
From an overall policy perspective, a representative from the Finance and Monetary Affairs Department of the Ministry of Planning and Investment stated that policies and guidelines for the development of green finance, as well as green credit and green bonds, have been issued quite comprehensively.
Regarding specific policies, Dr. Nguyen Thanh Nga, Deputy Director of the Institute of Financial Strategy and Policy, Ministry of Finance, stated that in recent times, the budget revenue policy has been effective, regulating behavior to encourage the economical and efficient use of resources and environmental protection; the policy of mobilizing state budget funds has been adjusted promptly and flexibly to respond to the pandemic, supporting businesses and people with additional resources for investment and consumption; thereby contributing to promoting production and business development.
Regarding state budget expenditure policies, government agencies have finalized regulations prioritizing investment and recurrent expenditures for green growth objectives; developed national programs, strategies, and action plans related to green growth; and refined regulations on public procurement for the use of energy-efficient and environmentally friendly green-labeled products.
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| Overview of the Forum. Photo: MPI |
In addition, the legal and policy framework for developing a green securities market is gradually being formed; several other green finance policies (green insurance, development of a carbon credit market) have also been issued.
Regarding the development of green financial instruments from the perspective of the Securities Market Development Strategy to 2030, Mr. To Tran Hoa, Deputy Director of the Market Development Department, State Securities Commission, stated that the strategy has set the goal of "developing green and sustainable financial instruments." These instruments will be important pillars in building a green and sustainable capital market, contributing to its role as a channel for mobilizing medium and long-term capital, providing necessary financing for projects related to renewable energy, clean and green technologies, and other environmental protection projects. This will help reduce dependence on non-renewable energy sources and encourage the use of environmentally friendly energy sources.
The workshop also heard a presentation by Dr. Can Van Luc, who stated that by the end of June 2024, green credit outstanding reached nearly 680 trillion VND, accounting for approximately 4.5% of the total outstanding loans in the entire economy. Loans assessed for environmental and social risks accounted for over 21% of the total outstanding loans of the credit institution system and increased by more than 20% compared to the same period in 2023. Regarding green bonds, during the period 2016-2020, there were a total of 4 issuances of green bonds, valued at 284 million USD. During the period 2019-6T/2024, Vietnam issued approximately 1.16 billion USD in green bonds.
Based on business experience, Ms. Diep Thi Kim Hoan, Director of Sustainable Development at DEEP C Industrial Park Complex, pointed out several difficulties businesses face in accessing green finance, such as a lack of information about green credit providers; actual financing costs; unclear and vague criteria for green projects; green credit funds often not accepting collateral, requiring bank guarantees; small-scale projects making it difficult to access foreign loans; and exchange rate fluctuations.
At the Forum, experts, policymakers, and businesses put forward proposals to overcome limitations in promoting green capital flows and discussed solutions to further boost green capital in Vietnam.
Source: https://www.mpi.gov.vn/portal/Pages/2024-9-10/Dien-dan-Hien-thuc-hoa-Chien-luoc-quoc-gia-ve-tangkpgf6m.aspx
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