International funding crucial for Vietnam's green growth: central bank official
Commercial banks in Vietnam need funding from international institutions and private financiers in order to promote green, sustainable growth, a Vietnamese central bank official said Thursday.
Pham Thanh Tung, deputy director of the State Bank of Vietnam’s (SBV) Credit Department, raised the issue at a conference titled “Greening the financial sector: Accelerating transition to a low-carbon economy in Vietnam” organized by the International Financial Corporation (IFC) in Hanoi.
Tung said Vietnam’s needs for long-term green loans were huge, with most of the mobilization consisting of short-term ones.
Total outstanding loans in Vietnam crossed VND12,500 trillion (roughly $520 billion) as of August, or 114% of GDP. Of this amount, green credit accounted for a mere 4.6%, she noted.
Tung added that the central bank was looking to build and cement ties with international financiers to green the financial sector, especially for green projects that require long-term funding.

Pham Thanh Tung (second from right), deputy director of the State Bank of Vietnam's Credit Department, speaks at the conference "Greening the Financial Sector" in Hanoi, September 21, 2023. Photo by The Investor/Minh Tuan.
Big opportunities
According to the IFC, the private arm of the World Bank Group, climate finance is still in its infancy in Vietnam, presenting massive opportunities for financial institutions.
The IFC estimates that Vietnam would require a cumulative $368 billion through 2040, or about 6.8% of GDP per year, to pave a resilient, net-zero development pathway. Of the amount, private sources would provide $184 billion, the public sector $130 billion, and external financiers $54 billion.
The key sectors with immediate investment opportunities for climate change adaptation and mitigation are energy, transport, agriculture and forestry, trade and manufacturing, infrastructure, water, and waste and wastewater management.
Climate financing accounted for about 0.5% of total financing provided by Vietnamese banks, or 0.2% of GDP in 2020, according to an IFC report, which adds that no green bonds had been issued thus far by the private sector or by a bank.
Funding energy transition
Speaking at a panel on Vietnam’s commitment to achieve net zero emissions by 2050, Pham Nguyen Hung, deputy director of the Electricity and Renewable Energy Authority under the Ministry of Industry and Trade, said Vietnam needed massive funding for its energy transition process.
After a boom lasting several years, solar and wind power projects now make up 27% of total designed supply sources in the country. The percentage of renewables will be 50% plus if hydropower is included, Hung said.
Meanwhile, coal-fired power plants have a combined capacity of 26 gigawatts (GW), but their electricity output surpasses 50% of total production.
Under the new National Power Development Power Plan (PDPVIII) approved by the government in May, the total capacity of coal-to-power projects would increase to 30 GW by 2030, Hung said, noting that power from coal use was still a vital source that will gradually be phased out with natural gas and natural liquified gas.
Vietnam needs $135 billion to implement its latest national power development plan (until 2030 with vision extended to 2050), Hung said. On average, the country needs $13.5 billion annually - around $12 billion for power generation and $1.5 billion for grid development.
The IFC earlier this week announced that it was investing up to VND3,500 billion (around $150 million) in local currency sustainability-linked bonds (SLBs), the first of its kind in Vietnam, to be issued by BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company. The bonds aim to help issuers expand their businesses while creating jobs, boosting competitiveness, and supporting the country’s low-carbon growth model.
In line with the government’s twin goals to become a high-income country by 2045 and achieve net zero by 2050, climate and sustainability have become bigger focus areas for IFC engagements in Vietnam. To date, IFC committed over $900 million in long-term finance to support climate-related projects in the country.
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