Investment of £50 million by British International to enhance Vietnam's shift towards green energy
In a significant move towards a sustainable future, British International Investment (BII) has announced a $50 million debt facility to Vietnam Prosperity Joint-Stock Commercial Bank (VPBank). This marks BII's first climate-directed debt facility in Vietnam and is part of a larger $350 million loan facility with partners such as Sumitomo Mitsui Banking Corporation, Export Finance Australia, FinDev Canada, and the Japan International Cooperation Agency [1][3][5].
The funding is aimed at increasing access to finance for Vietnamese businesses implementing climate-related projects in sectors like sustainable agriculture, clean transportation, circular economy, and renewable energy [1][3]. By providing VPBank with this capital, BII facilitates the bank’s ability to on-lend to small and medium-sized enterprises (SMEs), particularly those advancing green projects aligned with Vietnam’s national priorities on climate action and inclusive economic growth [1][3][5].
Vietnam, one of the world's most vulnerable countries to climate change, has emerged as one of the fastest-growing per-capita greenhouse gas emitters [6]. To combat this trend, the country has set ambitious goals for a sustainable future [7]. BII's role as a Development Finance Institution (DFI) is to help Vietnam achieve its climate targets [8].
The funding from BII is a crucial step in Vietnam's transition towards a net-zero emissions economy by 2050 [1][3][5]. BII aims to boost Vietnam’s climate finance market, supporting impactful projects and inclusive, low-carbon growth, thus contributing directly to Vietnam’s environmental goals and climate resilience [1].
Moreover, BII plans to allocate 30% of total new commitments to climate finance between 2022 and 2026 [9]. In addition, BII, in partnership with FMO and SUSI Partners, is developing a renewable energy platform in Vietnam, with the Dam Nai wind farm being the cornerstone asset [10].
Srini Nagarajan, managing director and head of Asia at BII, stated that the region has set ambitious goals for a sustainable future, and BII aims to attract further private sector investment in Vietnam's green transition [7]. Nagarajan further emphasised that BII's role is to provide patient, flexible capital that supports impact-driven businesses, de-risks projects, and demonstrates their commercial viability [11].
In conclusion, BII's $50 million facility helps mobilise private sector investment towards clean and sustainable business practices and infrastructure in Vietnam, advancing the country's transition to a net-zero emissions economy by 2050. The World Bank has estimated that $368bn is required for the green transition of Vietnam's sectors [2]. With this investment, BII is taking a significant step towards supporting Vietnam in achieving its climate goals and building a more sustainable future.
References: 1. BII Press Release 2. World Bank Report 3. Reuters Article 4. Vietnam News Article 5. Asia Times Article 6. Climate Action Tracker 7. BII Statement by Srini Nagarajan 8. BII Climate Strategy 9. BII Climate Strategy 10. BII Renewable Energy Press Release 11. BII Statement by Srini Nagarajan
- British International Investment (BII) has declared their intention to allocate 30% of total new commitments to climate finance between 2022 and 2026, demonstrating their commitment to environmental-science and finance for a sustainable future.
- In collaboration with FMO and SUSI Partners, BII is developing a renewable energy platform in Vietnam, showcasing their dedication to blended finance, specifically in the energy transition sector.
- By providing financing for climate-directed projects in sectors like renewable energy, sustainable agriculture, and clean transportation, BII is aiding Vietnam's development finance initiatives, which are fundamental to the country's endeavors for a net-zero emissions economy.
