TPBank and DEG representatives shake hands after signing the agreement. Photo courtesy of TPBank

HÀ NỘI - Tien Phong Commercial Joint Stock Bank (TPBank) on October 20 signed a US$50 million financing agreement with DEG, a development finance institution of Germany’s KfW Group.

The five-year facility will provide TPBank with additional medium- and long-term US dollar funding, diversify its international funding sources and expand green lending. The agreement also includes technical assistance to upgrade the bank’s Environmental and Social Risk Management System (ESMS) in line with international standards.

Green finance and support for SMEs

Under the agreement, the loan will be allocated to two strategic priorities. Sixty per cent of the facility, equivalent to US$30 million, will be directed towards eligible green projects, emissions reduction and the energy transition, supporting Việt Nam’s climate goals.

The remaining 40 per cent, or $20 million, will support small and medium-sized enterprises (SMEs), with a particular focus on women-owned and women-led businesses.

Alongside the financing, DEG will provide technical assistance to help TPBank strengthen its ESMS. The initiative aims to improve the bank’s capacity to identify, assess and monitor environmental and social risks throughout the credit lifecycle.

The work will cover policy standardisation, risk classification tools, and procedures for assessing and monitoring environmental and social risks in lending. It will also include specialised staff training to help the bank align its practices with international sustainability standards.

Strengthening ties with international financial institutions

The 2026 transaction marks DEG’s second investment in TPBank, following an earlier collaboration to improve access to finance for women-owned businesses. The latest agreement expands the partnership to include a stronger focus on green finance.

Both institutions aim to promote sustainable growth, support Việt Nam’s green transition and improve access to finance for businesses pursuing sustainable development.

DEG’s continued support reflects its confidence in TPBank’s ability to deploy international funding and maintain sound financial and governance standards.

Speaking at the signing ceremony, Monika Beck, a member of DEG’s Management Board, said: “Việt Nam continues to be a strategic market for DEG. TPBank has affirmed its position as a trusted partner thanks to its strong commitment to good governance, digital transformation, and customer-focused growth. Today's $50 million facility represents the next step in our cooperation.

The financing will support areas that are central to both our institutions' priorities. Sixty per cent will be allocated to eligible green projects, helping to advance Việt Nam's sustainable development and climate objectives. And 40 per cent of the funding will be directed to small and medium-sized enterprises, again including a strong focus on women-owned and women-led businesses.”

The facility is expected to strengthen cooperation between the two institutions, support SME development, expand opportunities for women entrepreneurs and contribute to Việt Nam’s green growth objectives.

Nguyễn Hưng, chief executive officer of TPBank, said: “DEG’s long-standing partnership helps TPBank increase its medium- and long-term US dollar funding and diversify its international funding structure. It also reflects confidence in the bank’s transparent governance. This partnership will help TPBank expand green lending, improve access to finance for SMEs, particularly women-owned businesses, and further integrate environmental, social and governance (ESG) standards into its operations, supporting Việt Nam’s net-zero emissions goal.”

TPBank has previously raised US$220 million in long-term loans from the US International Development Finance Corporation (DFC) and the Japan International Cooperation Agency (JICA). The bank has also participated in various cooperation programmes with the Asian Development Bank (ADB), the International Finance Corporation (IFC) and other international institutions.

The additional financing from DEG is expected to further strengthen TPBank’s role in connecting international financial institutions with Vietnamese businesses and supporting the country’s transition towards sustainable development. VNS