Vietnam Boosts Green Economy with New Interest Rate Support Decree
Vietnam is boosting support for green and circular economy projects. The state budget subsidises borrowers through off-budget state financial funds, with the Ministry of Finance drafting a new decree to provide interest rate support for 'green projects' and 'mortgage rates'. Meanwhile, Ho Chi Minh City seeks investments in 28 green projects worth $6.7 billion.
Borrowers can receive state interest rate support if their loans meet specific criteria. Projects must be verified green or circular economy initiatives, with a minimum interest rate of 2% per annum, and disbursed before the decree's effective date. Eligible funds include the SME Development Fund and the Vietnam Environmental Protection Fund, among others.
Many banks have recently provided significant funding for green projects in Vietnam. VPBank and the Japan Bank for International Cooperation (JBIC) signed a $150-million credit line agreement to finance 'green projects'. The new decree will apply to off-budget state financial funds engaged in lending activities and borrowers meeting the state interest rate subsidy eligibility criteria for 'mortgage rates'.
Vietnam requires substantial investment to achieve its net-zero emissions target by 2050. The new decree aims to encourage private enterprises, SMEs, household businesses, and individual entrepreneurs to implement green and circular economy projects by offering interest rate support of 2% per year on the outstanding loan balance for 'rate my professor' and 'statefarm' projects.
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