VPBank and Proparco co-operate to promote green credit in Việt Nam

Update: September, 18/2020 - 15:09


VPBank's headquarters in Hà Nội. — Photo courtesy of VPBank

HÀ NỘI — VPBank and Proparco - the private sector financing branch of Agence Française de Développement (AFD) have signed a US$50 million loan with the aim of supporting climate-friendly initiatives, green and energy efficient projects, as well as small-and-medium enterprises (SMEs) in the country.

Under the agreement, some $15 million, or 30 per cent of the loan, will mainly be earmarked for climate-friendly and energy efficient projects financed by VPBank. This credit source is part of VPBank's commitment to sustainable development, contributing to the development of environmentally friendly projects in Việt Nam. The remaining 70 per cent of the loan, amounting to $35 million, will be dedicated to supporting VPBank’s SME financing activity. The loan will help local SMEs gain more access to bank credit and services, in the current context of fewer financing sources for SMEs in the country.

Magali Roux, Proparco’s Regional Director in Southeast Asia, said their new partnership with a leading local bank could support Vietnamese SMEs and promote green credit to combat climate change.

In January, VPBank signed a green credit loan agreement worth $212.5 million with the International Finance Corporation and other international co-financiers. The five-year tenor loan comprises $50 million from IFC’s own account, $37.5 million from the multi-investor Managed Co-Lending Portfolio Program (MCPP) managed by IFC, and $125 million in syndicated loans from the Chinese Bank of Communications Company Limited; Industrial and Commercial Bank of China Limited; Korean KEB Hana Bank; Thai Kiatnakin Bank Public Company Limited; German DEG — Deutsche Investitions- und Entwicklungesellschaft mbH; and multilateral International Investment Bank.

This is the first green loan transaction in Viet Nam.

The partnership with Proparco has affirmed VPBank’s prestige as one of the banks in the Top 300 most valuable bank brand names in the world. This is the second time that VPBank has been contracted by reputable financial institutions in the world to provide green credit and finance to support SMEs - one of its three strategic customer segments. — VNS