Green credit paves the way for sustainable production

For green credit to truly spread, there needs to be synchronous coordination between the government, banks and businesses in continuing to perfect mechanisms, enhance appraisal capacity and support businesses to meet green criteria...

Priority capital flow for clean production

Currently, the Central region is not only known for its increasingly expanding industrial park and factory system, but the region is also making a strong mark in transforming the green growth model associated with sustainable development. In line with that trend, green credit and green banking models have become one of the important directions, prioritized by credit institutions in the area to support people and businesses.

In Ha Tinh, the orientation of green economic development and green growth is increasingly clear. The local government has identified environmental protection as the foundation of sustainable development, and has implemented many solutions to facilitate people and businesses to access green capital sources. In that context, credit institutions in the area play a key role in providing preferential capital for clean production, organic agriculture, sustainable forestry and renewable energy... Preferential capital not only helps production facilities expand their scale and apply green technology, but also contributes to improving product quality and increasing competitiveness in the market.

Loan model from Agribank Ha Tinh II to invest in clean production, circular agricultural processes, and application of science and technology in Phuc Trach commune.

According to Mr. Le Dai Duong, Deputy Director of MB Bank Ha Tinh, the unit's green credit balance mainly focuses on groups of fields such as clean and renewable energy, green agriculture , waste treatment, recycling and water management. In addition to expanding the loan portfolio, MB Bank also applies preferential interest rates of 1-2% reduction for loans in the green sector, encouraging businesses to shift towards sustainable production. Many industries are changing positively thanks to this capital source such as textiles, production of energy-saving electrical equipment, green medical supplies or production of electric cars...

Meanwhile, Agribank Ha Tinh II Branch is also one of the pioneers in promoting green credit in the locality. In addition to signing a contract with the Ha Tinh Provincial Youth Union to implement a program to support young people in starting and establishing businesses with preferential green capital, the branch also focuses on carefully assessing projects to ensure that capital is used for the right purposes and effectively. Priority loans are aimed at clean production models, circular agricultural processes, and the application of science and technology, contributing to the goals of the National Strategy on Green Growth in the locality.

Towards sustainable green capital flows

Not only Ha Tinh, green credit in Nghe An is also having a strong breakthrough. In recent years, circular economy and green development have become inevitable trends, and credit institutions in the province have quickly grasped and prioritized capital for environmentally friendly projects.

Many clean and renewable energy projects in Nghe An have been and are receiving support from local credit institutions.

To date, Nghe An has 12 credit institutions issuing green credit loans, with outstanding loans reaching over VND21,710 billion, accounting for 7% of the total outstanding loans in the whole area. It is noteworthy that the outstanding medium and long-term loans account for up to 75%, reflecting the trend of investing in sustainable projects that can create long-term positive impacts.

Green capital here focuses mainly on green agriculture, with more than 2,110 billion VND, including projects such as Nui Tien Pure Water and Fruit Juice Factory; many high-tech, organic farming and livestock models in all communes and wards in the area.

In the field of sustainable forestry, banks have disbursed about 112 billion VND for afforestation projects, developing raw material areas, and increasing forest cover. Clean and renewable energy also accounts for a large proportion with 882 billion VND, supporting hydropower projects, rooftop solar power in industrial parks in Nghi Loc (old), Trung Do Granite Factory or Trung Do Construction Materials Complex...

Some businesses in Nghe An have also transformed strongly thanks to green credit capital. Green Solar Song Lam Company Limited is a typical example, when it received capital support from HDBank Nghe An to expand its solar power system. What is special is that businesses can borrow immediately using the mortgaged property, which is the solar power system, a solution to help reduce the burden of collateral. In addition, many projects such as Trung Do Grannit Brick Factory, rooftop solar power system at WHA Industrial Zone... have also accessed green capital to develop according to the circular economic model.

Green credit - driving force for sustainable growth in the Central region.

According to Ms. Nguyen Thi Thu Thu, Acting Director of the State Bank of Vietnam, Branch Region 8, the implementation of green credit in recent times has received close and synchronous guidance. Credit institutions have strengthened the assessment of environmental and social risks when appraising projects, ensuring that capital flows are used effectively, on target, and limiting negative impacts on the environment...

However, reality also shows that green credit has not developed commensurate with its potential. The characteristics of green projects are large investment capital and long payback periods, while the capital mobilized by banks is mainly short-term capital. In addition, green loan applications require quite complicated environmental criteria and ESG reports, beyond the capacity of many businesses. The appraisal work of bank staff also faces difficulties due to the lack of assessment standards and criteria for measuring environmental impacts...

Despite many limitations, it can be affirmed that green credit in Ha Tinh and Nghe An and many localities across the country is making remarkable progress, becoming a driving force for sustainable development. However, for green credit to truly spread, there needs to be synchronous coordination between the government, banks and businesses in perfecting mechanisms, improving appraisal capacity and supporting businesses to meet green criteria... When barriers are removed, green credit will become an important lever to help the Central region's economy develop in a green, circular and sustainable direction in the future.

Source: https://thoibaonganhang.vn/tin-dung-xanh-mo-loi-cho-san-xuat-ben-vung-173804.html