There is a growing need for innovative solutions that open up opportunities for private investment into economically, socially and environmentally sustainable projects in Vietnam.
The climate-smart business investment potential in Vietnam alone is estimated at US$753 billion, with the majority (US$571 billion) in meeting the country’s low-carbon transportation infrastructure needs by 2030, according to a recent assessment of the International Finance Corporation (IFC).
Potential investment in renewable energy totals US$59 billion, with over half of this (US$31 billion) in solar PV and another US$19 billion for small hydropower projects and new green buildings representing an almost US$80 billion investment opportunity.
Given the country’s investment deficit regarding sustainable development projects, there is a growing need for innovative solutions that open up opportunities for private investment into economically, socially and environmentally sustainable projects, delivering jobs, inclusive growth as well as helping underpin achievement of the Sustainable Development Goals agenda.
“While banks have a pivotal role to play in helping unlock opportunities to link investment to sustainable projects in Vietnam, many still have significant scope to adopt international sustainability practices to better manage environmental, social and corporate governance risks within their portfolios and develop customized financial products for this market,” said Vietnam Banks Association (VNBA) General Secretary Nguyen Toan Thang.
The advancement of sustainable finance in Vietnam will take a significant step forward today with an important forum in Ho Chi Minh City bringing together decision-makers from financial institutions to position the sector to play a leading role in supporting the country to meet national development challenges.
The “Sustainable Finance Forum”, organized by VNBA in partnership with the Global Reporting Initiative (GRI) and IFC and sponsored by the government of Australia, Japan and Switzerland, will provide a venue for participants to examine how regulatory and market developments can help promote financial returns and sustainable finance.
A key feature of the forum will be its focus on green growth strategies and Vietnam’s progress in attracting climate finance, given the scale of the climate challenge facing the country.
While Vietnam must increase the effectiveness of climate finance and diversify funding sources, the lack of effective domestic funding for targeted investments inhibits the leveraging of external funds.
As such, building an enabling policy environment will be critical to accessing green growth finance from private investors.
“We are working with both regulators and financial institutions to help create a market for climate business in Vietnam and across the East Asian region through a combination of innovative investment and advisory products,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR.
The forum will bring together a range of stakeholders and participants, including representatives from the Ministry of Planning and Investment, State Bank of Vietnam, State Securities Commission, local banks and the private sector, including Ayala Energy, Dragon Capital and MSCI. Hanoitimes