Vietcombank issues 2 trillion VND in green bonds.

This 2 trillion VND green bond issuance by Vietcombank was designed with a structure that does not require collateral or payment guarantees. The entire value of the bonds offered was purchased by investors.

Mr. Vu Quang Dong, Deputy Director of the Capital & Markets Division at Vietcombank, stated that through the issuance of green bonds, Vietcombank aims to make a positive contribution to Vietnam's sustainable development and spread the green finance orientation to the community.

Aiming to support environmentally friendly projects

Why did Vietcombank decide to issue green bonds at this time?

In 2021, at the 26th Conference of the United Nations Framework Convention on Climate Change (COP26), the Vietnamese government made a strong commitment to climate change for the first time, aiming to achieve net-zero emissions by 2050. This is considered a strong commitment by Vietnam in pursuing sustainable development.

As a leading commercial bank, Vietcombank always places sustainable development and environmental protection as core objectives in its operational strategy. We recognize the growing need for investment in environmentally friendly projects, and green bonds are an effective tool for raising capital to support these projects.

- Could you elaborate on the structure and special features of the green bonds that Vietcombank has just issued?

This is Vietcombank's first green bond issuance. Simultaneously, Vietcombank is the first bank in Vietnam to issue green bonds in compliance with Vietnamese law and voluntarily adhering to the International Capital Markets Association's (ICMA) Green Bond Principles.

Vietcombank's green bond framework was advised by the international organization Global Green Growth Institute (GGGI) and highly rated by the prestigious credit rating agency S&P Global with a Medium Green rating (the second highest level on the six-point scale of S&P Global's Shade of Green rating framework), affirming the high level of quality, compliance, and transparency in project selection, management of fund disbursement from issuance, and governance and reporting practices of Vietcombank.

Our VND 2 trillion green bond offering was structured without requiring collateral or payment guarantees. The entire value of these bonds offered was purchased by investors, demonstrating their strong confidence in Vietcombank's management capabilities and commitment.

- Could you please share more about the process of evaluating and selecting projects for funding?

We apply a very rigorous evaluation process. First, selected projects must meet the criteria of the Green Bond Framework, developed in consultation with GGGI and evaluated by S&P. This framework is closely integrated with the bank's credit approval process, with the participation of ESG specialists from Vietcombank's departments. We also require clients to conduct environmental and social impact assessments and develop measures to mitigate negative environmental impacts, ensuring that projects not only meet green standards but also truly contribute to environmental sustainability. Project review is conducted strictly according to Vietcombank's regulations.

- How will Vietcombank monitor and report on the effectiveness of using the funds from these green bonds?

Monitoring and reporting are conducted transparently and rigorously. Annually, Vietcombank will publish audit reports on the allocation of funds and environmental impact assessment reports of funded projects to the public. This information includes disbursed capital, the types of projects for which capital was allocated, the allocation ratio, and the auditor's opinions on the suitability of the allocation within our green bond framework. Furthermore, undisbursed capital will be managed in accordance with regulations and transparency will be ensured throughout the bond's lifecycle.

Focus on developing a green banking strategy.

- What are Vietcombank's future plans to expand this green strategy?

We will not stop at issuing green bonds. Based on Vietcombank's Development Strategy to 2025, with a vision to 2030, VCB focuses on building a green banking strategy and diversifying green financial instruments, perfecting criteria and policies to direct credit flows to businesses using new technologies, with low carbon emissions, capable of competing in the international market, businesses investing in renewable energy, clean energy, green infrastructure, and the startup community to contribute to environmental protection and improve the efficiency of resource and energy use.

As of December 31, 2023, Vietcombank's total green credit outstanding reached VND 46,100 billion, equivalent to 3.6% of its total outstanding loans, with 84% of the green credit structure being renewable energy. This VND 2,000 billion green bond issuance by Vietcombank was successfully completed in a short period, receiving positive responses from investors and reputable international organizations, affirming Vietcombank's quality and leading role in this field.

We will strive to promptly introduce new products and initiatives that meet the trends of green finance and green economy , and are committed to making a positive contribution to building a sustainable and environmentally friendly Vietnamese economy.

Tue An (compiled)

Source: https://vietnamnet.vn/vietcombank-phat-hanh-2000-ty-trai-phieu-xanh-2343362.html