More capital to promote green finance

In order to build a green finance market (investing in projects related to environmental protection activities) and support small and medium enterprises in Vietnam, the International Finance Corporation (IFC) will provide a financing package of 150 million USD to the Southeast Asia Commercial Joint Stock Bank (SeABank). IFC's financing package includes an investment in the first blue bond in Vietnam and the first green bond issued by a domestic private commercial bank. 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 green bonds worth 50 million USD to help the Bank expand financing of green assets in areas such as: Green buildings, renewable energy and energy efficiency.

Customers transact at Southeast Asia Commercial Joint Stock Bank.

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 upfront costs of adopting green building solutions that have been factored into the home price by the developer. In addition, IFC will also provide a US$75 million loan to SeABank to increase lending to small and medium-sized enterprises, including women-owned businesses, to promote financial inclusion. According to experts, as one of the countries most vulnerable to climate change globally, Vietnam's economy suffered a loss of about 3.2% of GDP in 2020 due to climate change and this figure is expected to continue to increase rapidly. With a coastline of more than 3,000km, 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 achieve net zero emissions by 2050, Vietnam needs to invest an additional 6.8% of GDP each year, or a total of US$368 billion by 2040, of which half is expected to come from the private sector. “IFC’s investment will help SeABank increase its 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 our enhanced cooperation with IFC will further accelerate the Bank’s strategies for developing a green and blue 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 develop 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. By investing in a leading financial institution like SeABank, IFC aims to establish new asset classes, while mobilizing capital and strengthening the capacity of local financial institutions to promote climate finance in Vietnam,” said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Lao PDR.

Article and photos: HONG ANH

Source: https://www.qdnd.vn/kinh-te/tai-chinh/them-nguon-von-thuc-day-tai-chinh-xanh-783465