VPBank gets $212.5 million loan from IFC for climate-friendly projects

The funding will help VPBank expand its lending to small and medium enterprises and boost financing especially for climate-friendly projects.

Currently, the share of climate financing in Vietnam is just about five percent or $10.3 billion, indicating a significant climate finance gap.

It is expected that about one third of the financing package will be earmarked for climate-friendly projects, creating new options for businesses to obtain green financing at a favorable interest rate, IFC said in a statement.

The five-year tenor loan comprises $50 million from IFC’s own account, $37.5 million from the multi-investor Managed Co-Lending Portfolio Program managed by IFC, and $125 million in syndicated loans from the Chinese Bank of Communications Company Limited; Industrial and Commercial Bank of China Limited; Korean KEB Hana Bank and others.

Vietnam’s is one of the most carbon intensive countries in the world, ranking only after China and Mongolia in the East Asia and Pacific region.

Reducing greenhouse-gas emissions has been a national target to mitigate climate change impact, it presents a $753 billion climate investment opportunity for Vietnam between 2016 and 2030.

This is IFC’s first green loan to a bank in Vietnam, where most of the near-term multimillion-dollar climate investment potential is in renewables and infrastructure. The loan will qualify as per the Green Loan Principles — a widely accepted set of voluntary guidelines that specify the use of proceeds, monitoring, and reporting.

► IFC no longer major shareholder of Vietinbank, offloading nearly 1.5% stake