Illustrative image (Photo: VNA)Hanoi (VNA) - The International Finance Corporation (IFC) has provided a100 million USD long-term loan for the Orient Commercial Joint Stock Bank(OCB) to increase the private sector’s contributions to green andsustainable growth in Vietnam.
IFC’s investment will help OCB improve its outreach to small and mediumenterprises (SMEs) in Vietnam, which are facing a financing gap of 21 billionUSD, equivalent to 11.2 percent of the country’s GDP.
With this support, OCB expects to double its SME lending portfolio by 2024 byleveraging its digital banking platform and developing products that cater tothe sector’s needs.
Some areas that SMEs are seeking financing for include renewable energy,energy efficiency, and climate-smart solutions, which can help them growsustainably while contributing to reducing greenhouse gas (GHG) emissions.
The current share of climate financing – as a percentage of total bankfinancing – in Vietnam is just about 5 percent or 10.3 billionUSD and is expected to increase significantly in the coming years. As thecountry aims to reduce GHG emissions by 9 percent by 2030 to mitigate climatechange impact, this presents a 753 billion USD climate-smart investmentopportunity for Vietnam between 2016 and 2030, accordingto an IFC study.
To help OCB tap into this huge lending potential, 50 million USD of the fundingwill be earmarked for climate-friendly projects, creating new options forbusinesses to obtain green financing.
While the State Bank of Vietnam has been promoting green banking over the pastfew years, the climate-finance market is still young and banks are nowconsidering a systematic approach toward climate finance.
“IFC sees banks as a major force in fighting climate change in emerging marketssuch as Vietnam since they can strategically expand financing for climate-smartinitiatives,” said Kyle Kelhofer, IFC Country Manager for Vietnam,Cambodia, and Laos.
“By supporting commercial banks in Vietnam to establish a viableclimate-finance portfolio, IFC is facilitating the development of aclimate-finance market, attracting international lenders and further supportingVietnam’s shift to a low-carbon and resilient growth model.”/.
IFC’s investment will help OCB improve its outreach to small and mediumenterprises (SMEs) in Vietnam, which are facing a financing gap of 21 billionUSD, equivalent to 11.2 percent of the country’s GDP.
With this support, OCB expects to double its SME lending portfolio by 2024 byleveraging its digital banking platform and developing products that cater tothe sector’s needs.
Some areas that SMEs are seeking financing for include renewable energy,energy efficiency, and climate-smart solutions, which can help them growsustainably while contributing to reducing greenhouse gas (GHG) emissions.
The current share of climate financing – as a percentage of total bankfinancing – in Vietnam is just about 5 percent or 10.3 billionUSD and is expected to increase significantly in the coming years. As thecountry aims to reduce GHG emissions by 9 percent by 2030 to mitigate climatechange impact, this presents a 753 billion USD climate-smart investmentopportunity for Vietnam between 2016 and 2030, accordingto an IFC study.
To help OCB tap into this huge lending potential, 50 million USD of the fundingwill be earmarked for climate-friendly projects, creating new options forbusinesses to obtain green financing.
While the State Bank of Vietnam has been promoting green banking over the pastfew years, the climate-finance market is still young and banks are nowconsidering a systematic approach toward climate finance.
“IFC sees banks as a major force in fighting climate change in emerging marketssuch as Vietnam since they can strategically expand financing for climate-smartinitiatives,” said Kyle Kelhofer, IFC Country Manager for Vietnam,Cambodia, and Laos.
“By supporting commercial banks in Vietnam to establish a viableclimate-finance portfolio, IFC is facilitating the development of aclimate-finance market, attracting international lenders and further supportingVietnam’s shift to a low-carbon and resilient growth model.”/.
VNA
