To build a blue financial market, promote green bonds and support small and medium enterprises in Vietnam, the International Finance Corporation (IFC) will provide a $150 million investment to Southeast Asia Commercial Joint Stock Bank (SeABank, Hose: SSB).

In this financing package, IFC subscribes to buy USD 25 million of blue bonds, helping SeABank mobilize more capital for sustainable economic activities related to oceans and water (such as aquaculture and fishing, clean water supply, etc.). IFC also subscribes to buy USD 50 million of green bonds to help the Bank expand its financing of green assets in areas such as green buildings, renewable energy and energy efficiency. At the same time, IFC, as the implementing organization of the UK and IFC Market for Green Construction (MAGC) Program, will provide up to USD 0.48 million of preferential fees based on SeABank's financing performance for individual home loan customers to help them offset the initial investment costs for applying green building solutions that have been included in the home sale price by the investor.

In addition, IFC will also provide a $75 million loan to SeABank to increase lending to small and medium-sized enterprises, including women-owned businesses, to promote financial inclusion.

As one of the most vulnerable countries to climate change globally, Vietnam’s economy suffered a loss of about 3.2% of its GDP in 2020 due to climate change, and this figure is expected to continue to increase rapidly. With a 3,000 km coastline, the livelihoods of millions of Vietnamese people depend on the ocean. Vietnam’s marine economy is expected to contribute about 10% of GDP by 2030.

To reach net zero emissions by 2050, Vietnam needs to invest an additional 6.8% of GDP per year, or a total of US$368 billion until 2040, of which half is expected to come from the private sector.

“IFC’s investment will help SeABank increase funding for initiatives supporting Vietnam’s climate finance and financial inclusion agenda. We are proud to be the pioneer in issuing blue bonds in Vietnam, and the pioneer in issuing green bonds by a domestic private commercial bank. We hope that the enhanced cooperation with IFC will further promote the bank’s strategies in developing a green and blue investment portfolio,” said Ms. Le Thu Thuy – Vice Chairwoman of SeABank’s Board of Directors.

Along with the financing package, IFC will advise SeABank on the application of green and blue bond frameworks, and help the bank identify eligible green and blue assets and build a portfolio of potential projects.

“Vietnam’s green transition relies heavily on private investment, so deploying innovative financial instruments such as blue and green bonds will provide new sources of capital for climate-related projects,” said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “By investing in a leading financial institution like SeABank, IFC aims to create new asset classes, while mobilizing capital and strengthening the capacity of local financial institutions to promote climate finance in Vietnam.”

As a leader in building green and blue financial markets in Asia and the Pacific, IFC has supported many financial institutions and corporates to issue pioneering green and blue bonds in local markets. Last year, IFC invested VND3.5 trillion (about US$150 million) in Vietnam’s pioneering local currency sustainability-linked bond issued by BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company. With the investment in SeABank, IFC has committed to provide about US$1 billion in long-term financing to support climate-related projects in Vietnam to date.

IFC has been working with SeABank since 2021, supporting the Bank to expand lending to SMEs, enhance climate finance capabilities, and promote international trade opportunities. IFC advised SeABank to develop a women’s banking strategy to increase lending to women-owned SMEs with tailored financial products. IFC also supported SeABank in implementing an integrated environmental, social, and governance (ESG) framework to enhance the bank’s capacity to assess and manage environmental and social risks. With IFC’s support, SeABank has prioritized financing green projects to promote climate change mitigation and resource efficiency.

Source: https://nhipsongkinhte.toquoc.vn/ifc-dau-tu-150-trieu-usd-vao-trai-phieu-xanh-do-seabank-phat-hanh-20240625085201589.htm