IFC's investment and advisory programs address core development challenges, from food security, trade facilitation and improving manufacturing competitiveness.
On November 15, the International Finance Corporation (IFC) announced a record investment in Vietnam in fiscal year 2024, focusing on climate finance, to promote green transformation and sustainable development. The new capital commitments will support Vietnam's transition to a low-carbon economy while enhancing the resilience and competitiveness of the private sector.
Specifically, in the fiscal year ending June 30, IFC’s total committed capital in Vietnam reached more than US$1.6 billion, including more than US$750 million in long-term investments. Of which, IFC directly committed US$310 million from its own capital for long-term investments. This is a record for IFC for projects responding to climate change and ocean plastic waste in Vietnam and the highest level in the East Asia and Pacific region this fiscal year.
IFC’s investment and advisory programs in Vietnam also aim to address core development challenges, from food security, trade facilitation to improving manufacturing competitiveness. Of which, IFC has provided $896 million in short-term capital for trade and value chain finance, supporting domestic enterprises to promote trade, increase production and create jobs.
In addition, IFC has supported the first green bond issuance in Vietnam, including the green bond of Southeast Asia Commercial Joint Stock Bank ( SeABank ), contributing to promoting a sustainable marine economy and enhancing climate change resilience. SeABank is also the first private bank in Vietnam to issue a green bond with IFC support. In addition, IFC has also successfully connected a $75 million investment from the Asian Infrastructure Investment Bank (AIIB) into SeABank's green bond.
On the other hand, IFC also promoted the issuance of the first local currency sustainability-linked bond in Vietnam issued by BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company, to promote sustainable tourism. In addition to financial investment, IFC supports banks and businesses in building a sustainable finance framework, creating a foundation to expand climate investment.
To promote the “greening” of the banking sector, IFC has supported the State Bank of Vietnam in issuing regulations on environmental risk management, creating a level playing field and helping domestic banks strengthen management and minimize financial risks related to the environment and climate. IFC said it is also working with development partners to build a green classification system for Vietnam.
Mr. Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Laos, affirmed that IFC is ready to introduce advanced climate finance instruments, creating a new channel for capital mobilization for climate-smart projects.
“IFC’s funding is a positive signal for the potential development of the climate finance market in Vietnam, encouraging banks to tap into this new segment while promoting manufacturing enterprises to align their interests with responsible investment and mobilize capital from sustainable capital markets, supporting a low-carbon growth model,” Mr. Jacobs shared.
In addition to financing, IFC advises agribusinesses on sustainable rice farming and producers on green solutions in the carbon-intensive industry. With IFC’s support, a draft decree on greenhouse gas emission reduction and carbon market development is expected to be issued soon. A focus is also on promoting greenhouse gas emission reduction in the livestock sector and facilitating livestock companies’ participation in the carbon market.
According to IFC, the organization has cooperated with Vietnam Prosperity Joint Stock Commercial Bank (VPBank) to implement a supply chain finance program worth 30 million USD, supporting import-export enterprises, especially in the coffee sector. Along with that, IFC and Welcome Financial Group also signed an investment cooperation agreement worth 60 million USD, supporting banks to handle bad debts, free up new lending capital and help borrowers restore creditworthiness.
“The private sector plays a key role in driving sustainable economic growth as Vietnam moves towards high-income status. IFC’s robust investment program in the past fiscal year demonstrates our commitment to helping Vietnam build a more resilient and green economy while overcoming domestic and global challenges,” Jacobs stressed.
In fiscal year 2024, IFC committed $12.2 billion to 123 projects in the Asia-Pacific region, up 11% year-on-year. IFC’s projects have made a significant impact, helping to address pressing development challenges, including climate change, gender inequality, food insecurity and financial inclusion, while creating jobs and improving services./.
Source: https://baolangson.vn/to-chuc-tai-chinh-quoc-te-rot-von-ky-luc-ho-tro-chuyen-doi-xanh-tai-viet-nam-5028591.html
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