Despite some growth over the study period, green capital from foreign sources still accounts for a small share of total funding for green investment activities in Vietnam. In particular, green FPI has yet to develop due to limitations in the issuance and trading of green instruments such as green bonds and green shares (according to the Banking Times).
In Vietnam, three sources of capital were studied:1. Green foreign direct investment (green FDI).
2. Green foreign portfolio investment (green FPI).
3. Green official development assistance (green ODA).
To access “green capital” from international funding institutions, Vietnam can take the following measures:
Be more proactive in outreach: Vietnam needs to research and identify international funding institutions with financial support programmes for green projects. This includes gathering information on the past lending or funding methods of potential financing sources.
Consider the funder's motives: Before applying for a loan, businesses need to consider what motivates the funder to lend. This helps them better understand the criteria and requirements of green funding institutions.
Anticipate information requirements: Businesses need to anticipate the information they will have to provide to funders. This helps them prepare in advance and respond quickly when needed.
Create support mechanisms: Vietnam needs to establish support mechanisms for credit institutions to access long-term, preferential capital. This includes creating a clear legal framework for a national green taxonomy as the basis for mobilising green capital.
Cooperate with international partners: Vietnam should work closely with international organisations, development banks, NGOs and other partners to seek and access green capital.
At #VietESG we are ready to advise financial institutions in Vietnam on green capital solutions, ensuring high-quality investment policies so that financial institutions can access green capital from abroad, optimising business performance and sustainable development!
