The International Finance Corporation (IFC), the World Bank Group’s private-sector investment arm, made total commitments of $1.9 billion in Vietnam in fiscal year 2023 ending June 30, the IFC announced on Wednesday.
The investment puts Vietnam among the IFC's top five countries for long-term investment in the Asia-Pacific region, the institution added.
The IFC's investment and advisory programs have addressed core challenges facing Vietnam, including climate change, food security, trade barriers, and the housing finance gap. This has helped local companies recover from the Covid-19 pandemic and navigate challenging internal and external environments.
The majority of the long-term funding has been directed towards thousands of small and medium enterprises (SMEs), including women-owned businesses; and supported lower and middle-income home buyers, creating jobs and boosting economic activity.
The IFC's investments in BaF, a leading livestock producer, and in the retail operator GS25, along with a commodity-backed warehouse finance facility for TTC AgriS, have helped strengthen agribusiness value chains and improve food security in the country.
The IFC has also provided over $1.3 billion in short-term trade and supply chain finance to local companies in Vietnam, particularly garment and agribusiness suppliers, enabling them to continue importing and exporting goods while protecting about 100,000 jobs.
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 a bigger focus for IFC engagements in Vietnam. To date, the IFC has committed over $900 million in long-term finance to support climate-related projects in the country.
The IFC's advisory program in Vietnam has focused on facilitating climate business markets and building capacity for local businesses to grasp opportunities in the climate space.
"As businesses gradually recover from the pandemic while weathering uncertainties of ongoing global crises, it's the right time for the private sector to embark on a greener and more sustainable pathway of development to improve resilience and efficiency," said Thomas Jacobs, IFC country manager for Vietnam, Cambodia and Laos.
"This not only makes a strong business case for companies but will also help unlock the potential of the private sector as a driving engine of the country's transition to a low-carbon economic growth model," he added.
Across the Asia-Pacific region, the IFC committed a record $11 billion to 108 projects in FY2023, a 10% year-on-year increase. This comprised $4.7 billion in long-term financing from its own account, $3.4 billion in mobilization, and $2.9 billion in short-term trade and supply chain finance to facilitate trade flows.