In an effort to inaugurate a viable blue finance market in Vietnam and offer aid to small-scale enterprises, the International Finance Corporation (IFC) has disclosed a financial package of $150 million for the Southeast Asia Commercial Joint Stock Bank (SeABank). This initiative signifies the debut of Vietnam’s inaugural blue bond and the premiere of a green bond by a private commercial bank in the nation.
The investment from IFC encompasses a $25 million subscription in blue bonds, which will empower SeABank to amplify its funding for sustainable economic activities related to the ocean and water, such as aquaculture, fisheries, and water supply. Furthermore, IFC’s $50 million subscription in green bonds will facilitate the bank in augmenting financing for green assets, including green buildings, renewable energy, and energy efficiency.
Furthermore, IFC will extend a $75 million loan to SeABank with the objective of advancing financial inclusion by bolstering financing for small and medium-sized enterprises (SMEs), including those owned by women. The investment is projected to bolster the country’s climate and financial inclusion agenda, with Vice Chairwoman of SeABank BOD, Le Thu Thuy, expressing pride in the issuance of Vietnam’s inaugural blue bond and the first green bond by a private commercial bank. She also anticipates further collaboration with IFC to fortify the bank’s green and blue portfolio strategy.
IFC’s involvement will not only provide financial assistance but also strategic counsel to SeABank in embracing green and blue bond frameworks. As part of this, IFC will aid the bank in identifying eligible green and blue assets and developing a pipeline. According to Thomas Jacobs, the IFC Country Manager for Vietnam, Cambodia, and Lao PDR, the launch of groundbreaking financing instruments such as blue and green bonds presents a new source of funding for climate-related projects, which is vital for Vietnam’s green transition heavily reliant on private capital.
The collaboration between IFC and SeABank has been ongoing since 2021, focusing on expanding SME lending through tailored products, heightening climate finance access, and facilitating international trade. With IFC’s backing, SeABank aims to establish an integrated framework for environmental, social, and governance (ESG) considerations and prioritise funding for green projects to promote climate change mitigation and resource efficiency.
This partnership not only signifies a significant milestone in Vietnam’s financial landscape but also underscores the escalating significance of sustainable finance in addressing climate challenges. The issuance of the country’s inaugural blue bond, accompanied by IFC’s extensive support, signals a positive stride towards achieving environmental and financial sustainability.