EVN Finance has signed deals for a VND1,725 billion ($75 million) bond issuance that will mark Vietnam’s inaugural onshore, internationally verified green bonds in local currency.
Green bonds facilitate the borrowing of capital for environmentally-friendly, low carbon economy projects.
The deals, signed by EVN Finance, a unit of Vietnam Electricity Group (EVN), include one with GuarantCo, a Private Infrastructure Development Group (PIDG) member, to provide a VND1,150 billion ($50 million) partial credit guarantee to support this EVN Finance bond issuance.
It is the first-ever partially guaranteed corporate bond that has attracted institutional investors in Vietnam, including Canada’s Manulife and U.S.-based AIA. Vietcombank Securities under Vietnamese leading lender Vietcombank acted as the mandate lead arranger for the transaction.
The bond proceeds will allow EVN Finance to issue longer-term loans to finance green infrastructure projects including the fast-growing rooftop and ground-mounted solar sub-sectors in electricity-thirsty Vietnam, one of the world’s fastest-growing economies.
The projects are expected to contribute to the seventh United Nations Sustainable Development Goal, which is to ensure access to affordable, reliable, sustainable and modern energy for all by enhancing Vietnam’s energy and climate resilience.
Financing the solar power sector will help the nation reduce its dependence on fossil fuels and support its lower carbon emissions goals.
The rooftop solar solutions supported by EVN Finance will further benefit the wider economy by providing commercial and industrial end-users with access to renewable energy that is both cleaner and cheaper.
GuarantCo has worked alongside the Global Green Growth Institute (GGGI), an inter-governmental international development agency, which provided EVN Finance with technical assistance in structuring the green bond and also assisted with third-party verification of the Vietnamese firm’s green bond framework.
The support was made possible through a technical assistance grant under the GGGI’s Vietnam Green Bond Readiness Program supported by the Ministry of Finance, the Government of Vietnam and the Government of Luxembourg.
GuarantCo and Vietcombank Securities played an important role in attracting investors and coordinating the transaction, contributing to the success of EVN Finance’s green bond issuance, a new financial product in the domestic market, one which could be replicated across other similar transactions in Vietnam.
EVN Finance, a premier non-bank financial institution in the country, operates in capital mobilization, credit and investment, inter-bank market trading and services.
PIDG is a global infrastructure developer and investor that mobilizes private investment for sustainable and inclusive infrastructure in Africa and Asia.