The Vietnamese government is placing a high value on green finance as a means to meet its net-zero goals, recognizing the need for substantial investment in sustainable projects and the importance of aligning economic development with environmental sustainability.
Green Finance and Climate Resilience
Green finance encompasses a broad range of financial instruments, including loans, bonds, and investment flows that support sustainable energy, infrastructure, climate resilience, and environmental sustainability. In the context of Việt Nam, this means addressing the need for increased investment in renewable energy, energy efficiency, sustainable agriculture, and climate resilience.
- Renewable energy
- Energy efficiency upgrades
- Green transport
- Sustainable agriculture
- Waste and wastewater management
- Eco-friendly construction
These sectors are critical to reducing emissions and promoting long-term sustainable development. According to a 2024 CleanTech Asia report, Việt Nam will need approximately US$368 billion in green investment through 2040 to achieve its climate targets.
Current State of Green Finance in Việt Nam
As of March 31, 2024, outstanding green credit in Việt Nam reached approximately VNĐ636.96 trillion ($25 billion), accounting for 4.5 per cent of total outstanding credit. This represents a nine-fold increase since 2015 and an average annual growth rate of nearly 100 per cent.
| Year | Green Credit (VNĐ trillion) | Growth Rate (%) |
| 2015 | 0.15 | N/A |
| 2020 | 30.9 | 108.1 |
| 2024 | 636.96 | 99.2 |
Challenges and Opportunities
Despite the growth in green finance, several challenges remain, including:
- Access to and management of green capital
- Regulatory gaps and lack of standardization
- Limited awareness and adoption among SMEs
However, there are also opportunities for growth and development, including:
- Increased adoption of ESG criteria and risk management practices
- Integration of green finance into bank-mediated trade finance
- Development of green bonds and other financial instruments
Examples of Green Finance in Action
Several examples illustrate the potential for green finance to drive sustainable development in Việt Nam, including:
- TPBank’s issuance of VNĐ1.2 trillion in green bonds to fund renewable energy and eco-agriculture projects
- Phúc Sinh Group’s receipt of over VNĐ1 trillion from international financial institutions to fund green projects
- The European Chamber of Commerce’s (EuroCham) support for the development of green trade finance products and the promotion of digital platforms and green fintech applications
Conclusion
The development of green finance in Việt Nam has the potential to play a critical role in meeting the country’s net-zero goals and promoting sustainable development. With coordinated policy, institutional reform, and international cooperation, Việt Nam can unlock the full potential of green finance and drive a new era of sustainable, inclusive growth.
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