Representatives of VPBank and JBIC signed a green credit contract on Wednesday in Hà Nội. — Photo courtesy of VPBank

HÀ NỘI — The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) and the Japan Bank for International Cooperation (JBIC) have recently signed a credit agreement worth up to US$150 million to finance renewable energy and power transmission projects in Việt Nam, contributing to the national goal of achieving net-zero emissions by 2050.

The signing ceremony took place at VPBank's headquarters in Hà Nội on Wednesday.

In attendence were Japanese Ambassador to Việt Nam Ito Naoki, JBIC's Senior Executive Officer Ogawa Kazunori and VPBank's General Director Nguyễn Đức Vinh, along with numerous leaders from both organisations.

JBIC is a government-owned financial institution with a mission to protect the environment and combat climate change through collaboration with financial organisations in various countries, using diverse programmes and financial resources for sustainable development investment projects.

During the United Nations Climate Change Conference (COP26) in 2021, the Vietnamese government announced its national goal of achieving net-zero emissions by 2050.

To realise this goal, the eighth Power Development Plan (PDP 8), published in 2023, serves as a critical link guiding the transition of electricity production from fossil fuels to renewable energy sources.

Việt Nam will accelerate the development of smart power systems, integrate renewable energy sources and upgrade and construct modern power transmission and distribution networks.

In line with the objectives of both governments, the medium- to long-term $150 million loan provided by JBIC to VPBank is expected to be disbursed to corporate clients and projects in the fields of power grid development and renewable energy, positively impacting environmental protection in various localities across the country.

This loan is part of the AZEC initiative – the Asia Zero Emissions Community – launched by the Japanese government in an effort to achieve carbon neutrality and economic growth in accordance with each country's circumstances.

It aligns with the Just Energy Transition Partnership (JETP) programme agreed upon by Việt Nam and partner countries, including Japan and the United States, in 2022.

The collaboration between VPBank and JBIC marks a significant milestone, reaffirming the trust of international financial institutions in the operations of domestic banks.

The partnership also strengthens the robust relationship between Việt Nam and Japan across various sectors, including economics, finance, investment and industry.

As of the end of June 2024, Japan is one of the top three countries with the largest registered investment capital in Việt Nam, totaling over $76 billion, according to data from the Foreign Investment Agency under the Ministry of Planning and Investment.

VPBank headquarter in Hà Nội. The bank actively participates in realisng the national goal of net zero emissions by 2050 through green loans. — Photo courtesy of VPbank

VPBank is actively involved in realising the national goal of achieving net-zero emissions by 2050 through green loans.

Prior to this credit line from JBIC, VPBank successfully raised several large-scale international sustainable finance loans, including a commitment of $300 million from the US International Development Finance Corporation (DFC) in 2023, syndicated loans from major financial institutions backed by strategic partner SMBC (Japan) totalling nearly $1.7 billion.

In 2022, the bank raised a $500 million syndicated loan from five prominent financial institutions: the Asian Development Bank (ADB), Sumitomo Mitsui Banking Corporation (SMBC), the Japan International Cooperation Agency (JICA), ANZ Bank and Maybank Securities Pte. Ltd.

For many years, VPBank has been one of the leading banks in Việt Nam in terms of contributions to environmental, social and climate initiatives, by establishing and acting upon a consistent sustainable finance development strategy and a clear understanding of responsible lending principles. — VNS