GGGI supports Vietcombank’s debut of $80 million green bonds

In its continuous efforts to catalyse the green finance sector in Vietnam, the Global Green Growth Institute (GGGI) brought its global and local expertise to advise Vietcombank on developing the green bond framework for this landmark issuance, which adheres to both the Green Bond Principles of the International Capital Market Association (ICMA) and Vietnamese law. The green bond framework received a Medium Green rating from S&P Global, the second-highest level in S&P Global’s six-tier Shade of Green ratings scale.

As Vietnam remains steadfast in its commitment to green growth, it is crucial to align the financial sector, particularly the banking sector, with the overarching goals of the country on both sustainable development and net-zero emissions by 2050.

Helena McLeod, acting director-general of GGGI, said, “We are proud to partner with Vietcombank on this green bond issuance. This success reflects the growing investor demand and confidence in green growth projects, signalling strong market potential for directing private capital towards Vietnam’s net-zero transition. With the support of the Grand Duchy of Luxembourg, this issuance marks an expansion of GGGI’s technical assistance towards Vietnam’s net-zero 2050 goal.”

Under the green bond framework, the use of proceeds shall be allocated to projects in seven key sectors including renewable and clean energy, sustainable transport, sustainable water management, green construction, waste management and resource efficiency, sustainable agriculture – forestry – fisheries and biodiversity conservation, and energy efficiency. The issuance is expected to play a part in channelling the much-needed capital to address the increasing demand for investment in environmentally friendly projects in the country, supporting Vietnam in its net-zero transition.

S&P Global noted, “Vietcombank’s green credits contribute to addressing the most urgent environmental issues facing the country, such as carbon emissions and pollution.”

Vu Quang Dong, Vietcombank’s acting head of global markets, said, “As a leading bank in Vietnam, we recognise our responsibility to develop the green financial market, promote sustainable development, and support the economy in reducing emissions.”

He shared that the issuance of green bonds worth $80 million has been successful in a short time, receiving positive responses from investors and reputable international organisations, affirming the quality and leading role of Vietcombank in this field.

“We will make efforts to promptly introduce new products and new steps to meet the trend of green finance and a green economy and commit to actively contributing to building a sustainable and friendly Vietnamese economy with the environment,” he added.

The successful issuance adds to GGGI’s growing technical support for issuances of green bonds across sectors in Vietnam. The support is part of the Vietnam Green Bond Readiness Programme, funded by the government of Luxembourg, to foster the development of a robust green bond market in Vietnam.

The International Finance Corporation (IFC) is investing around $150 million in local currency sustainability-linked bonds (SLBs) to be issued by BIM Land JSC and its subsidiary Thanh Xuan JSC.

Vietnam Investment Review organised the conference themed "ESG in Banking: Leading Through Implementation" at the Pullman Hotel, Hanoi on November 19.

The banking sector has positioned itself as a pioneer in greening investment capital and enhancing social responsibility to achieve green growth and sustainable development goals.