VPBank and JBIC sign $150-million credit line to finance green projects

VPBank and the Japan Bank for International Cooperation (JBIC) signed a general agreement for a credit line totalling $150 million on October 9. Source: VPBank

The signing ceremony took place at the head office of VPBank in Hanoi, and the loan has been extended under JBIC’s GREEN operations to finance projects related to renewable energy and power grids in Vietnam to help realise the national target of net zero by 2050.

As a policy-based financial institution wholly owned by the Japanese government, JBIC takes its initiative to support global environmental preservation efforts by drawing on its various financial facilities and programmes, in cooperation with local financial institutions, for structuring projects and by performing its risk-assuming function.

At COP 26 in November 2021, the government of Vietnam announced its national goal to achieve net-zero emissions by 2050. To realise this goal, the government’s power development plan, released in May 2023, has acted as important guidance for the country’s power production plan that seeks to transit from fossil energy sources to renewable energy ones. Accordingly, Vietnam will accelerate the development of smart power systems that incorporate renewable energy sources, while upgrading and constructing the appropriate power transmission and distribution grids.

In line with the direction of both parties, the medium- and long-term loan amounting to $150 million from JBIC extended to VPBank shall be disbursed to enterprises and projects operating in power transmission development, renewable energy, or those that have a positive impact on environmental protection.

The untied loan harmonises with the Asia Zero Emissions Community concept led by the government of Japan, which strives for carbon neutrality and economic growth depending on the circumstances of each country. It also aligns with the Just Energy Transition Partnership, which was agreed on by the government of Vietnam and its partner countries, including Japan and the United States, in December 2022.

The cooperation between VPBank and JBIC is an important milestone that demonstrates the confidence of international financial institutions in the operations of VPBank. In addition, the deal also contributes to strengthening the strong relationship between Vietnam and Japan in many fields, ranging from economics to finance, investment, and industry. Accumulated through the end of June 2024, Japan remains one of three countries with the largest total registered investment in Vietnam, with more than $76 billion, according to the Foreign Investment Agency.

Prior to the credit limit granted by JBIC, VPBank had successfully mobilised numerous large-scale international finance loans, including a commitment of $300 million from the US International Development Finance Corporation in 2023, syndicated loans from major financial institutions backed by strategic partner SMBC (Japan) that added up to nearly $ 1.7 billion, and a syndicated loan valued at $500 million from reputable organisations such as the Asian Development Bank, Sumitomo Mitsui Banking Corporation, Japan International Cooperation Agency Bank, ANZ Bank, and Maybank Securities Pte. Ltd.

Over the years, VPBank has played a vital role in the environment, social, and climate contributions in Vietnam, through building, operating, and following a financial development strategy with consistency, sustainability, and a clear awareness of responsible lending principles.

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