Vietnam is the first country to implement risk sharing on green trade.

Việt Nam là nước đầu tiên triển khai chia sẻ rủi ro về thương mại xanh- Ảnh 1. — Image at the signing ceremony

According to information from the British Embassy, the UK International Investment (BII), a UK development finance institution and impact investor, together with the Asian Development Bank (ADB) on January 18 announced a new cooperation agreement with a funding target of up to 100 million USD to promote green trade in Asia, including Vietnam.

Cooperation activities will be implemented through ADB's Trade and Supply Chain Finance Program, and will focus on renewable energy, energy efficiency, and climate-resilient agriculture, to support the energy transition and climate resilience in the region.

Southeast Asia and South Asia are among the regions most affected by climate change. Achieving sustainable development goals in the region requires further promotion of renewable energy and its associated supply chains.

Trade plays an important part in facilitating the flow of goods that help countries in the region mitigate and adapt to the impacts of climate change.

However, the gap between global trade finance demand and availability is currently estimated at around $2.5 trillion per year, meaning businesses lack access to the finance needed to trade commodities for energy transition projects.

In addition, local banks are currently unable to meet the demand for loans with long enough maturities to finance climate change projects, especially in the renewable energy sector.

BII and ADB partner to narrow the global trade finance gap and address the need for long-tenor trade finance for green transactions.

The risk-sharing agreement between the two organizations will help international banks increase support for domestic banks, initially implemented in Vietnam before expanding to other countries under the support framework of BII and ADB.

The agreement will provide vital financial support to importers of solar panels, wind turbines, electric vehicles and agricultural products, with the aim of supporting the transition to cleaner energy sources in the region.

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