The International Finance Corporation (IFC) announced on September 19 that it is investing up to VND3.5 trillion ($150 million) in local currency sustainability-linked bonds (SLBs) to be issued by the BIM Land Joint Stock Company and the Thanh Xuan JSC. The first local currency SLBs in Vietnam, they aim to help issuers expand their businesses while creating jobs, boosting competitiveness, and supporting the country’s low-carbon growth model.

The investment comprises two subscriptions, with up to VND2.33 trillion ($100 million) to be issued by BIM Land, a leading tourism and property developer in Vietnam, and up to VND1.16 trillion ($50 million) to be issued by the Thanh Xuan JSC. Both are subsidiaries of the BIM Group, a multi-sector corporation in Vietnam.

The proceeds will be used to develop the Thanh Xuan valley project in northern Vinh Phuc province, which includes an eco-friendly and unique residential community alongside a hotel complex, under the InterContinental brand, and other relevant services and infrastructure. The IFC funding will also help the developers implement water and energy savings solutions in two BIM Land hotels - the InterContinental and the Regent - on Phu Quoc Island.

An innovative financing tool to support global sustainable development, these SLBs will provide financial incentives for both BIM Land and Thanh Xuan to improve water conservation and energy efficiency in three of their hospitality assets to be accredited by EDGE, the IFC’s green building certification system. This is expected to avoid an estimated 4,000 metric tons of carbon dioxide annually, equivalent to the greenhouse-gas emissions from 890 gasoline-powered passenger vehicles driven for a year.

“Sustainability is a critical part of our strategy to position BIM Land as a leading property developer and operator in Asia with a long-term vision,” said Mr. Doan Quoc Huy, Vice Chairman and CEO of the BIM Group. “We hope to attract international investors as we develop green and quality tourism infrastructure across the country. Most importantly, the IFC’s financing and advice will help catalyze our green transition in line with the industry’s good practices and global climate goals.”

The IFC has also helped BIM Land develop a sustainability-linked financing framework with tailor-made sustainability performance targets.

“Private capital is key to Vietnam’s green transition,” said Mr. Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Laos. “The issuance of the first local currency SLBs in the country will signal the viability of innovative green financing instruments as an alternative source of capital for climate-smart projects. The IFC’s funding will also encourage developers to align their interests with responsible investment and to mobilize funding from green capital markets, paving the way for a sustainable tourism sector.”

In line with the government’s twin goals of becoming a high-income country by 2045 and achieving net-zero emissions by 2050, climate and sustainability have become bigger focus areas for IFC engagement in Vietnam. To date, it has committed over $900 million in long-term finance to support climate-related projects in the country. The IFC’s commitments in Vietnam reached close to $1.9 billion in fiscal year 2023, ending June 30, helping local companies recover from Covid-19 and navigate the challenging internal and external environments.