News

IFC Boosts Climate Financing in Vietnam to Propel Green Transition

The International Finance Corporation (IFC) has scaled up its climate financing in Vietnam, to strengthen private sector resilience and green economic growth.

IFC Boosts Climate Financing in Vietnam to Propel Green Transition

IFC committed over $1.6 billion last fiscal year ending June 30 to support the country’s transition to a low-carbon economy.

This includes more than $750 million in long-term finance and $310 million in new IFC’s own-account long-term funding for climate and marine-plastic waste projects, the largest volume in the East Asia-Pacific region.

IFC also facilitated Vietnam’s first green and blue bonds, supported the issuance of the first local currency sustainability-linked bonds to foster more sustainable tourism, developed sustainable finance frameworks, and supported regulatory updates for carbon markets.

The fund also provided $896 million in short-term trade and supply chain finance to local companies in Vietnam to boost trade flows and create more jobs. Its local investment and advisory initiatives targeted key development challenges, such as improving food security, enhancing trade facilitation, and boosting manufacturing competitiveness. In the real economy, IFC supported agribusinesses in implementing sustainable rice farming practices and worked with manufacturers in high-emission industries to transition to greener technologies.

A few banks in Vietnam received IFC support in sustainable finance initiatives. Thus, SeABank became the first private bank in the country to issue a green bond. Asian Infrastructure Investment Bank (AIIB) invested $75 million in SeABank climate bonds.

To further advance sustainability in banking, IFC partnered with SECO to assist the State Bank of Vietnam in introducing environmental risk management regulations. These rules aim to create equal opportunities for banks while strengthening their systems to manage environmental and climate-related financial risks.

Additionally, IFC and other partners are collaborating with regulators to develop a green taxonomy for Vietnam, which will provide a framework for climate financing. It should clarify guidelines for identifying those projects and assets that align with climate and environmental goals, such as reducing greenhouse gas emissions, conserving biodiversity, or promoting clean energy. Green taxonomies help investors, financial institutions, and policymakers ensure that funds are directed toward genuinely sustainable initiatives, fostering transparency and consistency in the green finance sector.

IFC, part of the World Bank Group, is the largest global institution focused on private sector development in emerging markets. Operating in over 100 countries, it uses capital, expertise, and partnerships to drive market creation and expand opportunities in developing regions.

In fiscal year 2024, IFC achieved a record $56 billion in commitments to private companies and financial institutions in these markets. This funding mobilizes private capital and leverages innovative solutions, contributing to poverty reduction and environmental sustainability.

Nina Bobro

1158 Posts 0 Comments

https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.