BIDV issues 2,500 billion VND in bonds to finance environmental projects

Proceeds from the bond issuance will be used to finance green projects, energy saving, emission reduction, environmental protection, in accordance with BIDV's Green Bond Framework.

This is the first time the Vietnamese capital market has witnessed a domestic bond issuance with a green bond framework rated by Moody's - a leading international credit rating agency. BIDV has achieved a very high rating for the green bond framework of credit institutions, thereby confirming BIDV's high level of compliance and transparency in project selection, appraisal, lending, governance and reporting regimes.

BIDV's bond issuance is also the first green bond issuance in Vietnam with an unsecured structure, no secondary debt and no payment guarantee, demonstrating a high level of trust in the capacity and reputation of the issuer. Accordingly, all investors participating in the transaction are insurance companies and fund management companies belonging to the world's leading insurance corporations.

Mr. Tran Long - Deputy General Director of BIDV said: “BIDV has a clear strategy on developing green banking and green credit associated with the requirement to promote green credit growth and manage environmental and social risks (ESG) in credit granting activities and is ready to provide capital for customers operating in low-carbon emission sectors, adapting to climate change. Green bond capital will be an effective tool to increase BIDV's capacity in implementing the above strategy. With the determination to join the Government in implementing the commitment to achieve net zero emissions by 2050, we hope that BIDV's pioneering issuance of green bonds according to international standards will be a source of inspiration for other organizations to join hands in building a green future, strong and sustainable development.”

According to Ms. Carolyn Turk - World Bank Country Director for Vietnam: “This is a meaningful activity ahead of COP28 to support Vietnam's climate goals, contributing to creating a livable planet. The World Bank is pleased to support Vietnam in its efforts to achieve the goal of zero carbon emissions by 2050. The issuance of green bonds by commercial banks is one of many important steps to achieve that goal. With this green bond, BIDV will inspire other corporations and commercial banks to join hands in efforts to green the economy.”

“With a responsible investment policy, we support global sustainable development initiatives and our investment team always considers and evaluates Environmental - Social - Governance (ESG) factors in the investment process to be consistent with the company's philosophy and processes, which is also the operating philosophy of Prudential Group. Participating in BIDV green bond investment is a testament to the efforts of Eastspring Vietnam and Prudential Vietnam towards sustainable development goals in Vietnam. We appreciate BIDV being the first commercial bank in Vietnam to successfully issue bonds in accordance with ICMA's Green Bond Principles and with a Second Party Opinion, demonstrating the bank's commitment to transparency, reliability and efficiency in the use of bond issuance capital,” said Mr. Ngo The Trieu - General Director of Eastspring Investments Fund Management Company Limited.

The success of the green bond issuance marks an important milestone in BIDV's journey of "Creating sustainable value", continuing to affirm its pioneering and leading position in the market in green and sustainable development activities.

In 2022, BIDV is honored to be one of two pioneering units selected to support the development of the Green Bond Framework under the technical assistance program between the State Bank of Vietnam and the German International Cooperation Agency (GIZ). Accordingly, based on the knowledge acquired from the technical assistance program and research on the Handbook on Issuance of Green Bonds, Social Bonds and Sustainable Bonds issued by the State Securities Commission of Vietnam, BIDV drafted the Green Bond Framework in 2022.

In 2023, with technical advice from the World Bank (WB) and the International Finance Corporation (IFC) through the Joint Capital Markets Program (J-CAP), BIDV completed the development and issuance of a green bond framework with international best practices in line with ICMA's green bond principles. J-CAP is a global technical advisory program to enhance the mobilization of long-term private sector capital through capital markets to finance sustainable economic development in selected countries. In Vietnam, J-CAP is implemented with the support of the Australian Government and the Swiss State Secretariat for Economic Affairs (SECO).

BIDV's green bond framework is highly rated by Moody's with a rating of SQS2 (very good) - the second highest level out of five ratings. "BIDV has developed an official green bond framework consisting of four pillars in compliance with the 2021 Green Bond Principles of the International Capital Market Association (ICMA) (including Annex 1 of June 2022) and at the same time demonstrates significant contributions to sustainable development" - Moody's emphasized in the second-party opinion.

As of September 30, 2023, BIDV has sponsored about 1,500 customers with 1,900 green credit projects/plans with a total outstanding loan balance of up to VND 71,000 billion, accounting for approximately 5% of BIDV's total outstanding loan balance, an increase of 11% compared to 2022. At the same time, BIDV has extensive experience and leading capacity in receiving and implementing international trust funds with programs and projects for sustainable development goals.

Contact details:

Joint Stock Commercial Bank for Investment and Development of Vietnam

Capital and Currency Trading Department

Phone: 024.22205544 ext: 8279

Hotline: 19009247

Email: [email protected]

Website: www.bidv.com.vn

Le Thanh

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