MUFG Bank signs its first sustainability-linked loan deal in Vietnam’s agriculture sector

Japan's MUFG Bank, Ltd. (MUFG) has signed a sustainability-linked loan (SLL) agreement with Angimex-Kitoku, an An Giang province-based Vietnam-Japan joint venture company specializing in rice cultivation, production, and processing.

This bilateral facility marks the first SLL in the agriculture sector for MUFG in Vietnam.

The transaction is also a part of MUFG’s newly-launched “Vietnam Food-X Project”, a strategic initiative to solve agriculture and food issues in Vietnam and Japan through sustainable finance and cross-sector collaboration.

The initiative aims to strengthen Vietnam’s agrifood ecosystem and serve as a bridge between Japan and Vietnam in agriculture and food.

It also aims to enhance the wellbeing of both nations' people by leveraging the extensive networks of MUFG, VietinBank, and other partners.

The SLL will also enable Angimex-Kitoku to implement sustainable rice production practices under Vietnam’s “Transforming Rice Value Chain for Climate Resilient and Sustainable Development in the Mekong Delta” (TRVC) program.

Backed by international and local partners, the program promotes sustainable rice farming practices that reduce greenhouse gas emissions and improve economic outcomes for smallholder farmers in the country.

Under the loan structure, financial terms are linked to Angimex-Kitoku’s performance in reducing greenhouse gas emissions, with the company’s efforts independently verified.

Takao Nozaki, regional head of MUFG Vietnam, said: "MUFG is proud to play a part in the transformation of Vietnam’s agricultural sector and its food security goals. This facility is a fitting start to our Vietnam Food X Project, which aims to be a catalyst for sustainable development in the country’s agrifood sector."

Takashi Ryujin, director of Angimex-Kitoku, commented, "We are honored to partner MUFG through this sustainability-linked loan, which represents a meaningful step forward in our shared vision for a more sustainable and inclusive future."

This financing empowers Angimex-Kitoku to scale up climate-smart rice production while enhancing the livelihoods of smallholder farmers, especially women, who play a central role to the resilience and prosperity of farming households.

"Together with MUFG, we aim to create lasting, positive change for rural communities and contribute to the long-term development of Vietnam’s agricultural sector," added Ryujin.

MUFG is one of the world’s leading financial groups. Headquartered in Tokyo, MUFG has a global network with approximately 2,000 locations in more than 40 markets.

In Asia Pacific, the Japanese group has a presence across 18 markets - Australia, Bangladesh, mainland China, Hong Kong, Indonesia, India, South Korea, Laos, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.

It has also formed strategic partnerships with some of the most prominent banks in South-east Asia, further augmenting its unrivalled network across the region – VietinBank in Vietnam, Krungsri in Thailand, Security Bank in the Philippines and Bank Danamon in Indonesia.