Green credit growth reaches 22% annually
Total oustanding green credit estimated at $25 bln as of March, 2024.
Banks face difficulties in granting green credit
The State Bank of Vietnam (SBV) has reported that average growth in green credit in the 2017-2021 period was more than 25 per cent each year. As of June 30, outstanding loans for green projects stood at more than VND474 trillion ($19 billion), up 7.08 per cent year-on-year but accounting for only 4.1 per cent the total in the economy. At the “Green credit, green banking towards sustainable development in Vietnam” workshop held by the SBV in cooperation with relevant units on October 27, a central bank representative pointed out many obstacles in granting green credit, such as a lack of medium and long-term capital and high market risks.
Capital for green growth to come from many sources
Capital demand for green growth is quite large and long-term, so the burden of provision should not be put solely on the shoulders of the banking sector. According to Deputy Governor of the State Bank of Vietnam Pham Thanh Ha, “In the 2021-2030 period, to realize green growth, the government will focus on promoting resources from commercial loans and private investment such as green credit and green corporate bonds.”
IFC to provide capital for green projects
At a meeting on April 12, Minister of Natural Resources and Environment Tran Hong Ha and Mr. Alfonso Garcia Mora, Vice President of the International Finance Corporation (IFC) in charge of Asia-Pacific, agreed to expand cooperation in environmental protection and climate change response. The IFC is to provide long-term capital for enterprises’ green projects.