On November 19, 2024, Vietcombank successfully issued VNÄ2 trillion (approximately US$78.7 million) in green bonds, marking its inaugural venture into the green bond market. The proceeds from this issuance are earmarked for financing a range of projects aimed at promoting renewable energy, sustainable transport, water management, green buildings, waste management, sustainable agriculture, forestry, fisheries, and energy efficiency. This initiative aligns with local regulations and adheres to the Green Bond Principles set forth by the International Capital Market Association (ICMA). Furthermore, the bonds received a Medium Green rating from S&P Global, indicating their strong environmental credentials [731a540f].
The issuance reflects a growing trend in Vietnam's financial sector towards sustainable finance, with Vietcombank's green credit portfolio expanding significantly from VNÄ11.7 trillion in 2020 to VNÄ46.1 trillion by the end of 2023. Helena McLeod from the Global Green Growth Institute (GGGI) noted the strong investor demand for green projects, highlighting the increasing interest in sustainable investment opportunities within the region [731a540f].
In the broader context, Hong Kong is also making strides in sustainable finance, launching a roadmap to enhance climate disclosures and improve investor confidence. The Financial Services Development Council, alongside environmental organizations, has been advocating for adherence to international standards in sustainable finance [053c86fe].
The sustainable bond market in East Asia reached a size of $4.3 trillion by the end of last year, with the ASEAN+3 region's sustainable bond market expanding to $805.9 billion by March 2024. Global issuance of sustainable bonds surged by 36% in Q1 2024, driven by strong demand for green bonds, which accounted for $169 billion of the total issuance [2d150723].
Vietnam's local currency bond market has shown resilience, rebounding with a 7.7% quarterly increase, supported by government and central bank issuances. However, corporate bonds have faced challenges, contracting due to maturities and low issuance volumes. The sustainable bond market in Vietnam is gaining traction, with expectations for continued growth in the coming years [3fd5f6c7].
As global bond issuance increased by 13% in the first half of 2024, driven by refinancing needs and new debt issuance, Vietcombank's green bond issuance exemplifies a significant shift towards sustainable finance in Vietnam. This move not only supports the country's green economy but also positions Vietcombank as a leader in sustainable finance, contributing to Vietnam's long-term sustainable development goals [830cff38].