IFC signs advisory agreement with Vietnam firm to promote sustainable rice production

International Finance Cooperation (IFC), a member of World Bank Group, is supporting Vietnam’s A An Food JSC to enhance its rice production quality and sustainability, thus helping boost the value and competitiveness of the country’s agricultural sector.

“This will raise income for farmers and mills along the company’s supply chain and reduce greenhouse-gas emissions in rice farming,” IFC said in a release.

Under the new advisory agreement, IFC will help A An Food JSC - the rice business subsidiary of Tan Long Group, a key agribusiness player in the country - develop a safe, low-carbon, high-quality, and sustainable rice supply chain.

This includes supporting thousands of rice farmers and mills in adopting food safety measures, food loss prevention, and low-carbon practices, lowering production costs by up to 15% and reducing the post-harvest loss rate by half, to below 8% by 2030.

"IFC’s support will help Tan Long Group develop a sustainable rice production strategy to realize our goal of supplying up to five million tons of green, safe, and high-quality rice within the next 10 years," said Truong Sy Ba, chairman of Tan Long Group.

"As a leading rice processor, distributor, and exporter, we are keen to adopt low-carbon production practices in line with international standards, reducing the sector’s emissions and boosting the country’s climate and economic resilience,” he added.

The new partnership with Tan Long Group was announced as IFC’s regional vice president for Asia and the Pacific Riccardo Puliti arrived in Vietnam for a two-day visit, aiming to focus on the country’s transition to a productive, high-value and low-carbon growth model.

At a meeting with senior government officials, Puliti reiterated IFC’s commitment to supporting Vietnam’s development and climate goals by boosting productivity and sustainability, facilitating climate business markets and mobilizing international financing for green and resilient growth.

During his visit, Puliti will also meet business representatives to gain insight into the challenges and opportunities facing the local private sector and discuss how IFC can spur private sector investment to support Vietnam’s economic transformation, especially in sectors where the private sector's participation would significantly help ease the burden on the state budget including agribusiness, tourism, and logistics.

"As Vietnam aims to become a high-income economy by 2045, boosting the agriculture sector’s value and competitiveness by improving production, reducing losses, and enhancing safety, quality and sustainability will be critical to make the sector continue to be the key contributor to economic growth and job creation.

"By supporting local agribusinesses like Tan Long Group to develop local food systems that are greener, more productive, and resilient to a changing climate, we are not only helping strengthen the country’s food supply chain but also reducing emissions from agriculture, enabling Vietnam to achieve net-zero by 2050," said Puliti.

Active in Vietnam for more than 20 years, IFC has been a key partner in the country’s development journey, and that of its private sector, providing billions of dollars to local businesses to grow and create jobs since its first in-country investment in 1994. Sustainability and climate are a priority for IFC in Vietnam as the institution has committed over $900 million in long-term finance to support climate-related projects in the country.

Recently, IFC invested up to VND3.5 trillion ($150 million) in Vietnam’s first local currency sustainability-linked bonds, issued by BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company, to allow the developers to improve water conservation and energy efficiency in three of their hospitality assets.

IFC is the largest global development institution focused on the private sector in emerging markets. The institution works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.