The International Finance Corporation (IFC) and Australia launched a new partnership on December 15 to boost private sector growth in Vietnam.

At least $300 million in private investments are expected to be unlocked in Vietnam by the new partnership.

The new A$15 million ($10 million) Vietnam Private Sector Development Partnership aims to create inclusive and sustainable private investment opportunities by enabling a transparent, predictable, convenient, and cheaper way to do business in Vietnam for women and men.

Regulatory and policy reform, stronger sustainable and inclusive business practices, and banking that serves women-led businesses and climate-friendly solutions will be priority areas of the partnership. Initially, six projects worth A$5.7 million ($3.8 million) have been endorsed for implementation.

“The partnership between Australia and the IFC is a natural fit given our shared and strong interests in seeing Vietnam’s private sector continue to thrive,” said Australian Ambassador to Vietnam H.E. Andrew Goledzinowski. “Encouraging green, resilient, and inclusive growth is at the heart of the partnership.”

Over the next five years, the IFC-Australia partnership will work with Vietnam’s public and private partners to unlock the private capital required for its climate and development priorities, especially in key growth sectors such as infrastructure, agriculture, manufacturing, and tourism.

“With Covid-19 and global food and energy crises already depleting public resources, the private sector can play a key role in the country’s transition to a low-carbon growth model but only if the conditions are right and policies are in place,” said Mr. Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. “We are delighted to further deepen the partnership with Australia to promote the private sector’s participation in Vietnam’s ambition to become a high-income country and achieve carbon neutral status in the years ahead.”

In addition, the World Bank Group estimates that Vietnam - one of the countries most vulnerable to climate change - needs additional investments of about 6.8 per cent of GDP each year, or a cumulative $368 billion, in present value terms, through 2040 to realize its commitment of net-zero emissions by 2050. Half of the total cost, or $184 billion, is expected to come from the private sector.