Draft Decree on '2% interest rate support for green projects' submitted to the Government.

Photo caption — Ms. Pham Thi Thanh Tung, Deputy Director of the Department of Credit for Economic Sectors (Hanoi Bank).

At the "Diversifying Capital for Sustainable Development" seminar held on December 15th, Ms. Pham Thi Thanh Tung stated that over the past five years, green credit outstanding has increased by an average of 21% per year, higher than the overall credit growth rate of the country. While only 15 credit institutions recorded green credit outstanding in 2017, this number has now increased to 58. Commercial banks are using their own resources to provide preferential loans to this sector.

According to Resolution 68-NQ/TW dated May 4, 2025, of the Politburo on the development of the private economy and Resolution 198/2025/QH15 of the National Assembly, a mechanism for supporting interest rates of 2% per year is stipulated for private enterprises, business households, and individual businesses borrowing capital to implement green, circular, or standard-compliant projects through the Small and Medium-sized Enterprise Development Fund and commercial banks.

“Going forward, there will be more budgetary resources for this sector, opening up great opportunities to access preferential capital, helping businesses transform into more sustainable business models,” said Ms. Pham Thi Thanh Tung. Previously, the Prime Minister directed the State Bank of Vietnam and the Ministry of Finance to submit to the Government a Decree guiding the policy of supporting a 2% annual interest rate for businesses and households borrowing capital to implement green and circular projects applying ESG standards.

"We are actively finalizing the draft Government Decree stipulating interest rate support from the State budget for private sector enterprises, households, and individual business owners borrowing capital from commercial banks to implement green, circular projects applying the ESG framework. The draft has been reviewed by the Ministry of Justice and will be submitted to the Government this week, expected to take effect early next year," said Ms. Pham Thi Thanh Tung.

Meanwhile, Ms. Pham Thi Thanh Tam, Deputy Director of the Department of Financial Institutions (Ministry of Finance), also confirmed that the draft Decree on supporting interest rates of 2%/year for private sector enterprises through the Small and Medium-sized Enterprise Development Fund will be submitted to the Government by the Ministry in December 2025.

According to the State Bank of Vietnam (SBV), in order for green credit to accelerate, in addition to issuing two decrees guiding the 2% interest rate support, there needs to be synchronized coordination from the Ministry of Agriculture and Environment (MARD) in issuing regulations on determining which projects are green projects, circular projects, and ESG projects. These three documents, if issued simultaneously, will unlock the flow of green capital and accelerate its growth in the coming period.

Further guidance is needed regarding green project certification.

The issuance of Decision 21/2025/QD-TTg by the Prime Minister, which stipulates the environmental criteria and green classification list, has resolved difficulties for banks. With clear criteria, banks can easily identify, assess, and grant green credit accurately, avoiding the risk of "greenwashing"; at the same time, it helps businesses easily access government incentives...

However, representatives from businesses and regulatory agencies argue that Decision 21 is necessary but insufficient. Decision 21 only lists 45 types of projects in 7 key sectors (energy, transportation, construction, water, agriculture, processing industry, environmental services) that are recognized as "green projects," eligible for green credit and other incentives.

Decision 21 also stipulates that the agency certifying green projects (belonging to the green classification category) may be a competent State management agency (during the EIA assessment/environmental permit issuance process) or an independent certification organization meeting international standards (ISO/IEC 17029:2020).

Regarding the implementation of Decision 21, according to Ms. Pham Thi Thanh Tung, green projects must be published on the portal of the Ministry of Agriculture and Environment. This is an important database for banks to use as a basis for green lending. However, this database is still lacking. Only when the database is complete and fully updated will banks be able to easily compile statistics on green lending, promoting green credit in a convenient and transparent manner.

Banks are "thirsty" for green project data.

As one of the banks with the largest green credit outstanding in the system, Agribank representatives stated that the bank is facing difficulties due to a lack of standardized databases on green projects; the ESG capacity of businesses is still limited, and they suggested the need for more mechanisms to encourage green credit.

According to Mr. Vuong Van Quy, Deputy Head of the Credit Policy Department, with its leading role in investing in the development of "agriculture, farmers, and rural areas," Agribank has early identified green growth contributing to the achievement of sustainable development goals as a key task in its business strategy. Agribank not only provides capital but also accompanies the Government and the State Bank of Vietnam in realizing the National Strategy on Green Growth for the period 2021-2030.

As of Q3/2025, Agribank's total green credit outstanding reached VND 28,355 billion, with nearly 40,000 customers. Agribank's green credit structure clearly reflects its priority orientation for sustainable development: Renewable energy and clean energy (over 53%), sustainable forestry (over 24%), and green agriculture (over 21%).

To further boost the flow of capital for sustainable development, Mr. Vuong Van Quy suggested building a national database on emissions, energy, and biodiversity.

In particular, the bank has implemented many large-scale credit packages with preferential interest rates to "unlock" green capital flows, such as the VND 50,000 billion package with preferential interest rates reduced by 0.5 - 1.5%/year for businesses and cooperatives applying high technology; pioneering lending for the 1 million hectare high-quality, low-emission rice project; and implementing 3 credit programs specifically for corporate and individual customers with a total scale of VND 42,000 billion to finance projects and business plans for products and services in the green sector, green transportation, etc.

Along with accelerating green lending, Agribank is also implementing cooperation programs and solutions that contribute to achieving green growth and sustainable development goals, such as: Building an internal ESG framework, integrating environmental, social, and governance criteria into credit appraisal; Environmental risk management: In compliance with Circular 17/2022/TT-NHNN, Agribank has integrated the environmental risk assessment process into its lending activities, ensuring that capital does not flow into projects that harm the environment.

In particular, to mobilize resources for green lending, Agribank has actively expanded cooperation with the World Bank, ADB, JICA, and the EU on preferential loans and technical support. To further unlock capital flows for sustainable development, Mr. Vuong Van Quy suggested that, first and foremost, a national database on emissions, energy, and biodiversity should be established and made available to businesses and financial institutions for use in project evaluations. Simultaneously, regulations on measuring and inventorying greenhouse gas emissions must be standardized.

Furthermore, to diversify green capital sources, it is necessary to promptly finalize the legal framework for green bonds according to international standards (such as the Green Bond Principles); encourage the Hanoi Stock Exchange (HNX/HOSE) to develop a secondary market to increase liquidity; and for ministries and agencies to cooperate and participate in negotiations with international partners to bring Vietnam's standards closer to international standards...

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