European financial institutions are displaying their optimism about Vietnam’s sustainability path by fostering green financing alternatives, thus empowering the country to fulfil its net-zero carbon emission promise by 2050.
As part of a new partnership made last month, HSBC will comprehensively analyse and offer sustainable financing options for the growth of Trung Nam Group’s renewable energy projects in Vietnam.
The bank will draw on its global investment banking franchise, its deeply entrenched presence in the country’s financial market, and its extensive experience in sustainable finance to aid the group’s potential.
Nguyen Tam Thinh, Trung Nam’s chairman said, “This collaboration will generate critical financial solutions, assisting future growth of our strategic projects. Thus, we could increase ownership capacity in renewable energy to 3.8GW and 1.5GW of liquefied natural gas (LNG) by 2025, while also fulfilling the country’s net-zero ambitions.”
According to HSBC Vietnam’s announcement in late January, the bank intends to arrange up to $12 billion in direct and indirect financing for Vietnam and the business sector by 2030. The bank has vowed to invest $750 billion to $1 trillion in financing and investment this decade in order to help customers shift their business models and decarbonise.
HSBC Vietnam would mobilise funds from domestic and international financial markets to provide a variety of sustainable solutions in green finance, debt financing, supply chain management, commerce, green deposits, and investment products.
Standard Chartered Vietnam, another UK-based lender, is likewise devoted to its sustainability path.
T&T Group’s green initiatives in Vietnam will be partially funded by a $6 billion financing agreement from Standard Chartered made in November. Several projects would be the beneficiaries, including the Thai Nguyen province industrial and medical waste treatment plant, a waste treatment plant in Hung Yen, the waste-to-energy Xuan Son power plant in Hanoi, and the Hai Lang LNG project in Quang Tri province with a capacity of 1,500 MW, and other renewable energy projects.
Michele Wee, CEO of Standard Chartered Bank Vietnam said, “We are focused on consistently delivering world-class services and strategic solutions and making a significant difference in the markets we operate in. It is indeed a great pleasure that our efforts here in Vietnam have been recognised.”
A T&T Group spokesman noted that the partnership would unlock medium and long-term financial requirements as well as gain more exceptional know-how to speed up the group’s green projects in Vietnam, thus contributing to the national green growth plan for the period of 2021-2030, with a view to 2050.
Elsewhere, German finance institution DEG, a subsidiary of KfW Group, has invested $10 million in convertible Tier 2 bonds issued by Sovico’s HDBank. The bonds raised will also help HDBank enhance its environmental and social risk management capacity based on international practices. Specifically, HDBank has committed to staying away from coal-related projects.
For the United Nations’ Sustainable Development Goals of clean water, clean energy, industry, innovation, and infrastructure, the combined private sector investment prospect in Vietnam to 2030 is projected at $45.8 billion, cited Standard Chartered’s Opportunity 2030 research.
The World Bank, meanwhile, also predicts that climate change would diminish Vietnam’s national GDP by up to 3.5 per cent by 2050, making it one of the most vulnerable nations in the world.
Vietnam is one of Asia’s most carbon-intensive countries, only after China and Mongolia, and must make a swift transition away from high-carbon sectors in favour of climate change mitigation.
Vietnam’s climate-smart business potential is anticipated to be $753 billion between 2016 and 2030, with the bulk ($571 billion) allocated towards the country’s transportation infrastructure requirements by 2030, according to the IFC Climate Investment Opportunity study.
Renewable energy investment opportunities reach $59 billion, with more than half going to solar photovoltaic technology and another $19 billion to hydropower projects. New green buildings offer a prospect worth around $80 billion.
Vietnam needs considerable international support in terms of concessional capital to take measures for concurrently ensuring national energy security and achieving net zero emissions by 2050.