IFC invests in Vietnam's first blue bond issued by SeABank to boost climate finance

In this financing package, IFC subscribes to buy 25 million USD of blue bonds, helping SeABank mobilize more capital for sustainable economic activities related to oceans and water (such as aquaculture and fishing, clean water supply, etc.). IFC also subscribes to buy 50 million USD of green bonds to help the Bank expand financing of green assets in areas such as: green buildings, renewable energy and energy efficiency.

At the same time, IFC, as the implementing organization of the UK and IFC Market for Green Construction (MAGC) Program, will provide up to US$0.48 million in additional performance-based incentives from SeABank for individual home loan customers to help them offset the initial investment costs for applying green building solutions that have been included in the home selling price by the developer.

In addition, IFC will also provide a $75 million loan to SeABank to increase lending to small and medium-sized enterprises, including women-owned businesses, to promote financial inclusion.

As one of the most vulnerable countries to climate change globally, Vietnam’s economy suffered a loss of about 3.2% of its GDP in 2020 due to climate change, and this figure is expected to continue to rise rapidly. With a 3,000 km coastline, the livelihoods of millions of Vietnamese people depend on the ocean. Vietnam’s marine economy is expected to contribute about 10% of GDP by 2030.

To reach net zero emissions by 2050, Vietnam needs to invest an additional 6.8% of GDP per year, or a total of US$368 billion until 2040, of which half is expected to come from the private sector.

“IFC’s investment will help SeABank increase funding for initiatives supporting Vietnam’s climate finance and financial inclusion agenda. We are proud to be the first issuer of a blue bond in Vietnam, and the first domestic private commercial bank to issue a green bond. We hope that the enhanced cooperation with IFC will further promote the bank’s strategies in developing a green and blue investment portfolio,” said Ms. Le Thu Thuy – Vice Chairwoman of SeABank’s Board of Directors.

Along with the financing package, IFC will advise SeABank on the application of green and blue bond frameworks, and help the bank identify eligible green and blue assets and build a portfolio of potential projects.

“Vietnam’s green transition relies heavily on private investment, so deploying innovative financial instruments such as blue and green bonds will provide new sources of capital for climate-related projects,” said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “By investing in a leading financial institution like SeABank, IFC aims to create new asset classes, while mobilizing capital and strengthening the capacity of local financial institutions to promote climate finance in Vietnam.”

As a leader in building green and blue financial markets in Asia and the Pacific, IFC has supported many financial institutions and businesses to issue the first green and blue bonds in local markets. Last year, IFC invested VND3.5 trillion (about US$150 million) in Vietnam’s first local currency sustainability-linked bond issued by BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company. With the investment in SeABank, IFC has committed to provide about US$1 billion in long-term financing to support climate-related projects in Vietnam to date.

IFC has been working with SeABank since 2021, supporting the Bank to expand lending to SMEs, enhance climate finance capabilities, and promote international trade opportunities. IFC advised SeABank to develop a women’s banking strategy to increase lending to women-owned SMEs with tailored financial products. IFC also supported SeABank in implementing an integrated environmental, social, and governance (ESG) framework to enhance the bank’s capacity to assess and manage environmental and social risks. With IFC’s support, SeABank has prioritized financing green projects to promote climate change mitigation and resource efficiency.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities for developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, harnessing the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impact of dual crises. For more information, visit www.ifc.org.

About SeABank

Established in 1994, SeABank is one of the leading joint stock commercial banks in Vietnam with more than 3 million customers, nearly 5,500 employees and 181 transaction points nationwide. SeABank's goal is to become a typical retail bank with a customer-centric strategy by providing a diverse system of financial products and services to individuals, small businesses and large enterprises. SeABank is considered one of the pillars in the banking system with a charter capital of VND 24,957 billion, ranked Ba3 by Moody's in many important categories, and is one of the first banks to implement Basel III international risk management standards.

According to the development strategy of "Digital Convergence", SeABank focuses on digitizing products and services as well as applying technology in internal operations and investing in building modern technology infrastructure to optimize processes, increase operational efficiency, bring customers a different experience of digital banking services, aiming to become the most favorite retail bank. https://www.seabank.com.vn.

About the UK-IFC Market for Green Construction (MAGC) Programme

The IFC-UK Market for Green Construction (MAGC) programme is the first bilateral partnership between IFC and the UK on blended concessional finance to support climate change mitigation. By promoting the construction of certified green buildings, the programme aims to mobilize a total of US$2 billion in climate change mitigation investment. The UK government’s contribution is used to stimulate construction markets by providing financial incentives for the development of green buildings certified by IFC’s EDGE and other leading green certification systems.

Source: https://www.congluan.vn/ifc-dau-tu-vao-trai-phieu-xanh-lam-dau-tien-cua-viet-nam-do-seabank-phat-hanh-nham-thuc-day-tai-chinh-khi-hau-post300637.html