Vietnam ranks second on ASEAN green debt issuance board

Vietnam ranked second among ASEAN members on the green debt issuance board with a volume of $1 billion in 2021, according to a report by Climate Bonds Initiatives (CBI) and HSBC.

Vietnam is only ranked lower than Singapore ($12 billion), which dominates the bulk of indices in the Association of Southeast Asian Nations (ASEAN) Sustainable Finance - State of the Market 2021.

In all, Vietnam incurred $1.5 billion in green, social, and sustainability (GSS) debts in 2021, a fivefold increase over the previous year.

The ASEAN GSS market continued to expand in 2021, with a volume of $24 billion compared to $13.6 billion the prior year, representing 76.5% year-on-year growth.

According to HSBC, the Vietnamese bond market has grown to represent over $70 billion in 2021. Over 80% of the volume comes from government debt, with development banks being the second-largest issuer type.

“Most of the green debt originating from Vietnam in 2021 came from the transport and energy sectors,” it added.

Accordingly, Vinpearl JSC, VinFast (subsidiaries of Vietnam's largest listed conglomerate Vingroup), and Lien Lap Wind Power JSC are among Vietnam's top issuers with amounts of $425 million, $400 million and $173 million, respectively.

Along with Vietnam, Singapore, Thailand, and Malaysia also saw increased volume compared to 2020, while Indonesia and the Philippines saw a decline.

The bright figures came after major changes in Environmental Protection Law 2020 compared to the previous version. Among the changes are the inclusion of the definition, general requirements of green bonds and potential incentives applicable to eligible issuers, which will be specified in subsequent sub law documents.

Furthermore, a green taxonomy, expected to be introduced in 2022, is being developed together with the promulgation of the law, the bank noted.

ASEAN is an economically dynamic and culturally diverse region with a population of 650 million, comprising 10 member countries - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam - that together make up the fifth largest economy in the world, set to become the fourth largest by 2050, according to HSBC.

CBI is an international organization working to mobilize global capital for climate action.

This report describes the shape and size of GSS+ themed and unlabeled climate aligned debt market originating from ASEAN and priced on or before December 31, 2021.