The Japan Bank for International Cooperation (JBIC), Mizuho Bank, Joyo Bank, and Shiga Bank will provide funding totaling $300 million to renewable energy firms in Vietnam to support the country's decarbonization efforts.
Vietnam is seeking to promote the development of renewable energy to support its carbon neutrality goal by 2050, and this funding will help the process. The four Japanese banks will provide funds via Vietcombank under a deal signed in Hanoi Wednesday, with $165 million from JBIC.
JBIC said it would also provide a guarantee for the portion co-financed by private financial institutions.
By indirectly utilizing Vietcombank's credit information, the Japanese banks expect that high-risk loans will be provided swiftly. Vietcombank will in turn provide subleasing loans, mainly to local businesses.
“As Japan's policy-based financial institution, JBIC will continue to support global environmental preservation efforts in cooperation with local financial institutions by drawing on its various financial facilities and programs for structuring projects and by performing its risk-assuming function,” the Japanese bank said in an announcement.
“Through the loan, JBIC supports the Government of Vietnam's and Vietcombank's initiatives for preserving the global environment.”
In January, the JBIC issued a joint statement on the Vietnam Climate Finance Framework (VCFF), which aims to promote Vietnam's decarbonization in partnership with the U.S. International Development Finance Corporation (DFC), the Department of Foreign Affairs and Trade of Australia, and Export Finance Australia (EFA). This co-financing by the four Japanese banks is JBIC's first project under this framework.
The DFC is the U.S. government’s development finance institution. Meanwhile, EFA is the Australian government’s export credit agency that plays an impactful role in financing Australian exports and interests, including overseas infrastructure development.