IFC, Australia partner to boost Vietnam’s private sector growth
At least $300 million in private investments in Vietnam is expected to be unlocked by a new partnership between the World Bank’s investment arm IFC and the Australian government, IFC announced Thursday.
The partnership will help Vietnam continue on its path to green and inclusive growth while addressing needs emerging from the Covid-19 pandemic.
Traffic on streets in Hanoi, northern Vietnam. Photo courtesy of IFC.
The new $10 million Vietnam Private Sector Development Partnership aims to create inclusive and sustainable private investment opportunities by enabling a transparent, predictable, convenient, and cheaper way to do business in Vietnam, for women and men.
Regulatory and policy reform, stronger sustainable and inclusive business practices, and banking that serves women-led businesses and climate-friendly solutions will be priority areas of the partnership.
IFC said six projects valued at $3.8 million have been endorsed for implementation.
"The partnership between Australia and IFC is a natural fit given our shared and strong interests in seeing Vietnam's private sector continue to thrive. Encouraging green, resilient, and inclusive growth is at the heart of the partnership," Australia's Ambassador to Vietnam Andrew Goledzinowski said in the IFC announcement.
Over the next five years, the IFC-Australia partnership will work with Vietnam's public and private partners to unlock private capital required for its climate and development priorities, especially in key growth sectors including infrastructure, agriculture, manufacturing, and tourism.
“The private sector can play a key role in the country's transition to a low-carbon growth model but only if the conditions are right and policies are in place," said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Laos.
The World Bank Group estimates Vietnam, one of the most vulnerable countries in the world to climate change, needs additional investments of about 6.8% of GDP a year, or a cumulative $368 billion, in present value terms, through 2040 to realize its commitment of net zero emissions by 2050. Half of the total cost is expected to come from the private sector.
IFC is the largest global development institution focused on the private sector in emerging markets.
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