Green and circular economies will bring economic, environmental and social benefits, generating jobs, sustainable growth, and climate change adaptation.

The banking sector, acting as the life-line of the national economy, has applied measures to support the greenization of the economy

As of March 31, 2024, 47 credit institutions had provided green loans worth VND637 trillion, accounting for 4.5 percent of total outstanding loans.

Can Van Luc, chief economist of BIDV (Bank for Investment and Development of Vietnam), said green loans has grown by 22 percent per annum, but the figure needs to be raised.

Luc said green bonds have developed very slowly and need more attention from the government and Ministry of Finance. In 2019-2023, Vietnam issued only $1.16 billion of green bonds.

“Green financing originates from high demand from investors and consumers. The challenge comes from awareness and participation of relevant parties. Criteria and standards need to be clarified. Financial resources are mostly medium and long ones (10-15 years)."

Nguyen Thi Thu Ha from Agribank said the bank has expanded credit to fund clean energy and hi-tech agriculture, including upgrading quality and food safety as well as sustainable agriculture products. It also funds projects on natural calamity risk management, low-carbon agriculture, water supply, and biogas development.

VietinBank has announced success in building SFF (Sustainable Finance Framework) to give detailed guidance to the funding and management of loans for sustainable growth. This shows the bank’s commitment to join the government and clients to obtain net-zero emissions by 2050.

The bank reported a 100 percent growth rate in sustainable finance in 2018-2022. It  launched a VND5 trillion green credit package with preferential interest rates for projects meeting criteria for sustainable growth.

Thanh said green growth is not just a political commitment of the nation, but also a requirement from consumers who want greener and safer products; from commercial banks that provide loans; and from developed countries that import Vietnamese products. Commercial banks tend to provide loans primarily to projects and enterprises applying ESG (environmental, social and governance) standards.

Tuan Nguyen