Green bond issuance makes positive initial steps

BIDV has become the first bank to successfully issue green bonds according to the Green bond principles of the International Capital Market Association (ICMA) in the domestic market. The proceeds from the bond issuance will be used to finance green, energy saving, emission reduction, and environmental protection projects under BIDV’s Green bond framework.

BIDV is the market leader in green financing in Vietnam - photo: BIDV

This is the first round of green bonds in Vietnam, rated by Moody’s - the world’s leading international credit classification organization. According to Moody’s green bond framework ratings for credit institutions, BIDV has achieved a very high rating for support and high-level transparency in project selection, appraisal, lending, and administration.

Deputy General Director of BIDV Tran Long, said that BIDV has built a clear strategy for developing green banking and green credit associated with the requirements to promote green credit growth and environmental and social risks management (ESG) in credit granting activities and being ready to finance customers operating in low-carbon, adaptive sectors with climate change.

“With the determination to achieve net zero emissions by 2050, we hope that BIDV’s pioneering issuance of green bonds will inspire other organizations to build a green future with strong and sustainable development,” Long said.

The proceeds from the bond issuance will be used to finance green projects - photo: Trung Nam

In 2022, BIDV was honored to be one of the two pioneers selected to support the development of a Green bond framework under the technical assistance program between the State Bank of Vietnam and the German Agency for International Cooperation (GIZ). In 2023, with technical advice from the World Bank (WB) and the International Finance Corporation (IFC) through the Joint Capital Markets Program (J-CAP), BIDV has completed construction and promulgated a Green bond framework with international best practices in line with ICMA’s green bond principles. BIDV’s green bond framework is highly rated by Moody’s Credit Rating Organization with the SQS2 (very good) rating being the second highest in five rating levels.

Carolyn Turk, the World Bank Country Director for Vietnam, also emphasized that this is a meaningful activity ahead of COP28 to support Vietnam’s climate goals, contributing to a livable planet. The World Bank is pleased to support Vietnam in its effort to achieve a net-zero carbon emission target by 2050. Green bond issuance by commercial banks is one of the many important steps towards achieving such a target. With this green bond, BIDV is set to inspire other corporations and commercial banks to join the effort in greening the economy.

As of September 30, 2023, BIDV funded about 1,500 customers with 1,900 green credit projects/plans with a total outstanding debt of up to VND71 trillion, accounting for approximately five percent of BIDV’s total outstanding debt, an increase of 11 percent compared to 2022.

It can be said that the success of green bond issuance marks an important milestone in BIDV’s journey of “Creating sustainable values,” continuing to affirm its pioneering position and leading the market in green and sustainable development.