Vietnam’s push for green growth and carbon neutrality by 2050 requires an estimated $670–700 billion in long-term investment - an amount far exceeding the capacity of the banking sector alone. This reality demands urgent diversification of capital sources.

$700 billion needed for sustainable growth

According to the Ministry of Finance, financial demand to meet national green growth goals and achieve net-zero emissions by 2050 is exceptionally high.

Under the carbon neutrality scenario, Vietnam’s long-term investment need for green and sustainable development by 2050 is estimated at $670–700 billion. Of this, around $368 billion will be required for climate change adaptation - accounting for about 6.8% of GDP annually.

This calls for mobilizing every possible source of capital, especially from green bonds, green credit, carbon markets, and international funding, alongside the state budget.

As of November 30, 2025, green credit outstanding stood at approximately 750 trillion VND (roughly $30.8 billion), growing at an average rate of 21% per year from 2017 to September 2025 - faster than general credit growth across the economy.

This highlights how banks and credit institutions have shown great interest in creating financing channels for green and sustainable development. However, relying solely on credit from banks is insufficient to meet funding needs.

At the seminar “Diversifying capital for sustainable development,” held by Finance and Investment News on December 15, Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Ngoc Canh emphasized the need to broaden financial resources by involving domestic and foreign capital markets, especially the private sector, to complement the banking system in supporting Vietnam’s green transition.

“Expanding green finance investment channels across various sectors and markets not only relieves pressure on the banking system but also enables safer, more flexible, and effective medium- and long-term capital mobilization - aligned with global green finance trends,” he stated.

To mobilize and effectively deploy these resources for the national green transition, Canh stressed the importance of clarifying the role of capital markets and the stock exchange in attracting mid- and long-term capital for sustainable development.

He urged the development of green capital markets, the promotion of sustainable financial instruments such as green bonds, sustainability bonds, and ESG-compliant equities (environmental, social, governance). He also called for enhancing corporate and investor capacity in accessing, utilizing, and monitoring the effectiveness of green finance flows and financial products.

Proposals to ‘awaken’ the capital market

Financial institutions and banks have proactively explored and developed green financial products and credit to support environmentally beneficial projects, climate change response, and sustainable production models.

Vuong Van Quy, Deputy Head of Credit Policy at Agribank, offered several recommendations to the government, ministries, and the SBV to further unlock capital flows for sustainable development.

He proposed building a national database on emissions, energy, and biodiversity that enterprises and financial institutions can use for project assessments. He also called for standardized regulations on emissions measurement and greenhouse gas inventories.

In addition, Quy advocated for specific incentives such as corporate income tax reductions for green loans, interest rate subsidies or preferential refinancing - especially for energy transition and sustainable agriculture.

He recommended offering free training and support from the SBV and international organizations to boost ESG capacity among businesses, including ESG reporting guidance and green technology adoption.

A key priority is finalizing a legal framework for green bonds aligned with international standards such as the Green Bond Principles. Simultaneously, the Hanoi and Ho Chi Minh City stock exchanges (HNX/HOSE) should be encouraged to develop secondary markets to improve liquidity.

Finally, Agribank representatives urged government agencies to negotiate and align domestic standards with international ones while simplifying approval procedures to shorten timelines.

According to Dr. Nguyen Ba Hung, Chief Economist at the Asian Development Bank (ADB) in Vietnam, besides bank credit, Vietnam must expand its capital market through stock and bond markets - covering both corporate and government bonds.

Hung emphasized improving capital efficiency across both public and private investment.

For the public sector, he proposed several solutions: reforming the government bond market, improving credit ratings, enhancing project selection and execution efficiency, developing new financial instruments that blend public and private capital, and increasing access to international capital markets.

For the private sector, he recommended developing all domestic financial markets in sync - including money, debt, and equity markets - along with a full ecosystem of financial services (banking, investment, brokerage, advisory). He also highlighted the need to connect with global financial markets to attract large-scale capital and improve service efficiency.

Tuan Nguyen