Best results will come from eco-IP direction

Can Van Luc , member, National Financial Monetary Policy Advisory Council

Green credit for industrial property is still blocked somewhere and has not been able to reach borrowers.

This is due to mainly three reasons: first, domestic credit institutions have not yet designed appropriate green products, but are mainly based on the purpose of capital use and industry according to the guidance of the State Bank of Vietnam.

Second, although there are some regulations on green bonds, regulations on green classification and certification of projects to be issued such bonds have not yet been released.

Third, the cost of investing in green projects is often high, so project evaluation and appraisal also pose a big problem for both businesses and banks.

Besides that, market awareness of green and sustainable bonds is still uneven. Some businesses have understood correctly, but there are also businesses that have a rudimentary understanding, so they are not drastic in finding capital.

Although green finance has been deployed in Vietnam for more than 10 years, the scale is still small. Green credit only accounts for around 4.5 per cent of total outstanding debt, and green bonds are very few.

In particular, the implementation of green credit still has many problems such as not enough legal framework, overall policies (including taxes, fees, and preferential capital) related to the implementation of green finance and sustainable finance.

Green projects often have long terms of up to 20 years and large investment costs, while the sources of loan capital from credit institutions are often short- and medium-term mobilised capital, and the borrower usually requires preferential interest rates.

From that reality, to develop green finance, Vietnam needs a comprehensive strategy to develop the green finance market in a harmonious and effective manner between capital channels, associated with the orientations of socioeconomic development goals.

Tran Thanh Vu, director, Industrial and Civil Sector Consultancy, Edeec

Green building development and industrial construction can both avoids added costs and significantly reduce investment and operational expenses.

About 15-20 years ago, green buildings followed a traditional design process with green features added later, which resulted in increased costs. However, if those elements are integrated from the start, these costs can be greatly minimised

Over the past 15 years, Vietnam has had about 300 projects with green certification, a number far too low given the market size.

Developers need to return to the basics by planning green buildings from the outset, with support from expert consultants. Technical consulting plays a crucial role in optimising costs, including structural strategies that ensure efficient energy use and effective funding in a building’s technical systems.

Many investors and developers often focus solely on achieving attractive renderings, standard construction drawings, and green certifications. However, they frequently overlook the core objective of such projects – maximising building operational efficiency, optimising costs, and adhering to sustainable, environmentally friendly practices. These are essential checklists that must be completed before moving to construction drawings or obtaining certification.

Hardy Diec, COO, KCN Vietnam

Vietnam is experiencing a significant shift towards green industrial real estate, driven by growing environmental awareness, government incentives, and increasing demand from international investors.

The eco-IP model is definitely gaining significant traction in Vietnam as a sustainable and efficient approach to industrial development. Additional trends gaining momentum among developers in this country include sustainability certification, where there’s a notable rise in industrial projects seeking green building certifications like LEED or local Vietnamese standards like LOTUS.

These certifications not only validate environmental performance but also enhance the project’s marketability and appeal to tenants.

In renewable energy integration, industrial zones are incorporating renewable energy sources like solar and wind power to reduce their carbon footprint and operational costs. This aligns with Vietnam’s broader commitment to renewable energy adoption.

Developers, meanwhile, are increasingly adopting circular economy principles, emphasising waste reduction, resource recycling, and the use of sustainable materials. This approach not only minimises environmental impact but can also create new economic opportunities.

The integration of smart technologies, such as Internet of Things sensors and data analytics, is optimising energy management, water usage, and waste disposal within industrial parks, leading to significant resource savings.

In green infrastructure, the focus is on creating green spaces, implementing rainwater harvesting systems, and using permeable pavements to improve water management, reduce heat island effects, and enhance the overall environmental quality of industrial zones.