International Finance Corporation providing USD 150 million for Vietnam's first blue bond

Vietnamese fishing boats off of Ly Son Island
Vietnamese fishing boats off of Ly Son Island | Photo courtesy of Hamafozi/Shutterstock
4 Min

The International Finance Corporation (IFC) announced it will provide a financing package of USD 150 million (EUR 140.3 million) to Vietnam’s Southeast Asia Commercial Joint Stock Bank (SeABank).

The package, designed to stimulate a viable blue finance market, promote green bonds, and support smaller businesses in Vietnam, serves as the country's first blue bond and green bond issued by a private commercial bank. It includes a USD 25 million (EUR 23.4 million) subscription in blue bonds, enabling SeABank to expand its funding for sustainable economic activities related to aquaculture, fisheries, and water supply.

Another part of the package is a USD 50 million (EUR 46.8 million) subscription to help SeABank push financing for green assets, comprising green-certified buildings, renewable energy, and energy efficiency projects.

"IFC's investment will help SeABank increase funding for initiatives that support the country's climate and financial inclusion agenda. We are proud to be issuing Vietnam's first blue and green bonds by a private commercial bank. We look forward to working with IFC to further bolster our green and blue portfolio strategy," SeABank Vice Chairwoman Le Thu Thuy said.

To help mitigate the additional expenses related to green construction, IFC will also offer a performance-based incentive of up to USD 480,000 (EUR 448,900) to retail borrowers.

The remaining USD 75 million (EUR 70.1 million) loan to SeABank is intended to enhance financial inclusion by increasing financing opportunities for small- and medium-sized businesses, including businesses owned by women.

"Vietnam's green transition relies heavily on private capital, and the launch of innovative financing instruments such as blue and green bonds offers a new source of funding for climate-related projects," IFC Country Manager for Vietnam, Cambodia, and Laos Thomas Jacobs said. "With investment in a leading player, IFC is establishing new asset classes while mobilizing capital and strengthening the capacity of local financial institutions to drive increased climate finance in Vietnam."

In addition to the investment, IFC will provide advisory services to SeABank on adopting green and blue bond frameworks, including assisting the bank in identifying eligible related assets and developing a project pipeline.

In 2023, IFC made a VND 3.5 trillion (USD 137.3 million, EUR 128.7 million) investment in Vietnam's first local-currency, sustainability-linked bonds issued by BIM Land Joint Stock Company and its subsidiary, Thanh Xuan Joint Stock Company.

The investments in SeABank and BIM Land are all part of IFC's commitment to give around USD 1 billion (EUR 934 million) in long-term financing aimed at supporting climate-related projects in Vietnam.

Another Vietnamese commercial bank, VietinBank, announced in January of this year that from 5 January to 31 December 2024, the bank will offer VND 5 trillion (USD 196.2 million, EUR 183.5 million) at preferential interest rates for projects that deliver environmental and social benefits. These projects encompass sectors such as green energy, green exports – including seafood – and green construction.

“Moving toward a green seafood industry is a mandatory and irreversible requirement against the world trend. At least we must have the concept in mind right now, otherwise it will be difficult to integrate fully into the global community,” Vietnamese Deputy Minister Phung Duc Tien said in December last year.

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