Customers make transactions at a BIDV office. To promote green credit, it is necessary to have an effective coordination policy to help projects obtain green certifications. (Photo: VNA)Data from the State Bank of Vietnam (SBV)’s Credit Department for EconomicSectors showed as of December 31, 2022, the outstanding loans for greenprojects increased by 12.96% against the end of 2021 to more than 500 trillionVND, accounting for more than 4.2% of the total outstanding loans of the wholeeconomy. The loans mainly focused on green agriculture, renewable energy, andclean energy.
Nguyen Thi Phuong, Deputy General Director of Agribank, said though Agribankhas set aside a large amount of capital for green credit, it is not easy todisburse.
In many areas around the country, it is easy to find out a clean agriculturalmodel or a commodity production model, but it is very difficult to find out agreen model, which has to meet many criteria and certifications, Phuongexplained.
In recent years, green credit in Vietnam has grown strongly, but banking expertCan Van Luc said green outstanding loans are still modest compared to the totaloutstanding loans of the whole banking system.
To promote green credit, Phuong said it is necessary to have an effectivecoordination policy to help projects obtain green certifications.
The Vietnam Business Forum’s Banking Working Group (BWG) recommends Vietnam needsa roadmap to quickly apply green energy and an appropriate green financialframework for projects that can get bank loans through actions such as thedevelopment of the transitional financial instruments, the preparation ofenvironmental-social-governance (ESG) reports and the investment portfoliotransformation.
Commercial banks hope the Government will promote the development of greencredit by issuing more detailed guidance on the definition of ‘green’ andassessment criteria.
To promote green credit, some banks have recently built a sustainable loanframework with a green credit appraisal process. For example, State-owned BIDV,which topped the market in green credit with a total committed capital of morethan 2.68 billion USD by the end of 2022, last month issued the sustainableloan framework to ease the green loans.
State-owned Agribank has also issued a series of documents on promoting greencredit growth, and environmental and social risk management in credit grantingactivities.
Besides State-owned banks, some private banks have also joined the green creditsegment, but the disbursement amount was not much as they are still concernedabout long repayment period, large investment costs and high market risks ofgreen projects, including renewable energy ones./.
VNA
