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Millions of US dollars poured into green growth projects

Capital flows into green growth projects have still seen positive signals despite adverse impacts from the COVID-19 pandemic on foreign direct investment (FDI) in Vietnam.

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French development finance organisation Proparco recently provided a 50 million USD loan for the Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) to lend green projects to promote sustainable development. This is the first time HDBank has borrowed capital from the organisation but it has started to finance green projects in Vietnam since 2018.

The International Financial Corporation (IFC) in July gave a 100 million USD long-term loan to the Orient Commercial Joint Stock Bank (OCB) to further promote the contribution of the private sector in green and sustainable growth in Vietnam. The purpose of this credit was to extend lending to small- and medium-sized enterprises (SMEs), especially to promote the financing for climate-friendly projects in Vietnam.

In May, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) received a 100 million USD loan and technical assistance worth 300,000 EUR (366,000 USD) from the French Development Agency (AFD). The capital is used to finance businesses investing in the fields of environmental protection, climate change response, and green growth.

Earlier, a series of banks including the Bank for Agriculture and Rural Development of Vietnam (Agribank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Tien Phong Commercial Joint Stock Bank, Nam A Commercial Joint Stock Bank also get long-term loans from international financial institutions to fund green growth projects in Vietnam.

Opportunities to raise capital for green projects

According to the World Bank's assessment, green growth financing projects play a very important role in the sustainable development of Vietnam in the future.

Meanwhile, the IFC said the implementation of the national target on reducing total greenhouse gas emissions by 9 percent by 2030 to mitigate the effects of climate change will provide a climate investment opportunity worth about 753 billion USD for the country in the 2016-2030 period.

The green growth trend of international investment organisations is opening up many opportunities for Vietnamese enterprises to call for capital.

A recently released report by HSBC Vietnam highlighted that Vietnam's economy, which has developed rapidly over the past decade, is a fertile land for investors who are seeking growth.

HSBC assessed climate change initiatives and green finance programmes in Vietnam are still in their infancy, but this frontier market is gradually catching up with governance and social factors. For example, in the renewable energy sector, Vietnam is recording the highest level of investment in renewable energy in the Association of Southeast Asian Nations (ASEAN) region.

 

Source: VNA

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