15.5 billion USD has not found a loan project

At the seminar "Prospects for Green Finance Development" organized by the Finance Investment magazine on the afternoon of August 6, Dr. Vo Tri Thanh - Director of the Institute for Brand and Competition Research, said that green development is not only a strong political commitment of the whole country, but also an order from the market itself when consumers demand greener, safer; from the requirements of developed countries; from finance, if it is not green, no loan will be given.

Currently, 80% of financial capital requires ESG (environmental - social - governance) to provide capital. These issues for businesses are not just about existence or non-existence, but also about seizing many new opportunities when developing green.

Emphasizing that green finance is an institutional and technological revolution with many new features such as green criteria, standards, green origin, etc., he acknowledged that there are many challenges that businesses have to face such as conversion costs, market pressure and institutional issues.

Regarding financial resources, Mr. Thanh said that green transformation requires a lot of costs and a lot of capital. This process must be done from the top down, changing legal institutions, policies, and business approaches...

According to him, green economy and green finance are a comprehensive transformation. In this process, finance is clearly very important, so the participation of financial institutions and funds is needed.

From the real story, Dr. Vo Tri Thanh pointed out that “we are doing and running at the same time”. According to him, not only the issue of green economy, green finance but also digital economy, digital finance or financial development... we are all unfinished. If we continue to wait for the law, it will take about 4 more years, so there needs to be a breakthrough policy to develop the green economy and finance.

Lawyer Nguyen Thanh Ha - Chairman of SBLaw Law Firm - said that our country has paid attention to building a legal framework for green economy and green finance very early, but it has not been as expected.

The lack of legal framework and legal regulations greatly affects the decisions of investors in this market. In addition, Vietnam has not yet developed different sets of green criteria for each specific industry. Therefore, the path to developing green finance and green economy in our country still faces many challenges.

Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, pointed out the current situation where green financial resources exist but businesses have not been able to access them.

He cited the figure of 15.5 billion USD that the Partnership for a Just Energy Transition mechanism has allocated for Vietnam to convert from fossil energy to renewable energy, but so far it has not found any projects to borrow or receive funding due to procedural problems.

Expanding on the green policy story, Mr. Nghia assessed that we are talking a lot but doing very little. In fact, green credits and green bonds for wind power and solar power projects... are still just normal loans or investments with full conditions on collateral, interest rates, and terms without any priorities or incentives.

Furthermore, the scale of the funds is not commensurate with the need for green finance. The World Bank estimates that we need 360-400 billion USD to transform energy and reduce greenhouse gas emissions from now until 2030.

To attract green capital, businesses must have a strategy.

From a business perspective, Mr. Nguyen Anh Tuan - Financial Director of PAN Group - said that the company has approached many international financial institutions and found that sustainable financial products are suitable.

According to him, in Vietnam there are two products under this institution, including: a green financial product for businesses with large green projects that are easily funded by international organizations; another product will require businesses to commit to reducing emissions according to ESG criteria. PAN Group is pursuing both products.

Businesses can also access green finance in the above way without depending entirely on state capital. However, Mr. Tuan also noted that to access financial institutions, businesses themselves must have a certain foundation in sustainable development as well as sustainable governance.

IIA Vietnam Chairman Hoang Duc Hung raised the question: “In the green financial flow, how can money flow to the right place?” According to him, businesses must show that they are “green”. Green here is not only an environmental issue, but more broadly, an ESG and sustainable development issue. Money flows into businesses not simply because they are green, but also because they achieve balance, have social commitments and governance methods.

Therefore, for investment funds to invest in businesses, appraisal is a must. Businesses must have reports so that stakeholders can see their commitments.

Vietnam has a limitation in that it does not have a reporting framework on sustainable development and green development. “Lenders have their own criteria. However, management agencies also need to develop a sustainable development reporting framework. Methodologies and measurement tools also need to be standardized,” Mr. Hung suggested, adding that in the long term, the most important thing is the awareness of the highest leaders in the enterprise.

"To attract green capital, businesses must have a specific strategy and direction. It's not like today's green talk can mean tomorrow's green talk. Once you have a bad reputation, it's hard to fix it and it's hard to find friends to play with," Mr. Hung shared.

There needs to be a complete policy and legal framework for a green economy . Dr. Vo Tri Thanh believes that “green” is a revolution, completely changing business methods, lifestyle, investment and even legal aspects.