Investment firm British International dishes out £50 million to speed up Vietnam's eco-friendly evolution
In a significant move towards Vietnam's goal of achieving net-zero emissions by 2050, British International Investment (BII) has announced a $50 million debt facility. This investment, provided through Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), aims to increase access to finance for Vietnamese businesses undertaking climate-related projects.
The facility marks BII’s first climate-directed debt investment in Vietnam and focuses on sectors such as sustainable agriculture, clean transportation, circular economy, and renewable energy. These sectors are key to driving Vietnam’s green transition.
The larger $350 million syndicated loan, of which the BII funding is a part, involves partners like Sumitomo Mitsui Banking Corporation, Export Finance Australia, FinDev Canada, and Japan International Cooperation Agency. The collaboration aims to boost green projects that help reduce Vietnam's dependence on fossil fuels and promote sustainable development in areas such as healthcare, education, clean water, and housing in underserved communities.
BII's commitment extends beyond this single investment. The organisation plans to allocate 30% of its total new commitments to climate finance between 2022 and 2026, with the aim of investing up to £500 million of climate finance across Southeast Asia during this period.
The renewable energy sector is a particular area of focus for BII. In partnership with FMO and SUSI Partners, BII has developed a renewable energy platform in Vietnam. The Dam Nai wind farm, the cornerstone asset of this platform, is expected to play a crucial role in Vietnam's green transition.
Vietnam, one of the world's most vulnerable countries to climate change, stands to benefit greatly from such investments. The country's energy sector, which relies heavily on fossil fuels, accounts for over half of its total emissions.
BII's approach to these investments is patient and flexible, as stated by its CEO, Nagarajan. The organisation aims to de-risk projects and demonstrate their commercial viability, thereby attracting further private sector investment in Vietnam's green transition.
The World Bank estimates that $368 billion is required for Vietnam's green transition. BII's investment is a significant step towards mobilising the private sector's involvement in Vietnam’s green economy and fostering partnerships that can amplify the impact on climate and social inclusion, including support for women-led small businesses.
- British International Investment (BII) is shifting focus towards sustainable development in Vietnam, with a commitment to invest up to £500 million in climate finance across Southeast Asia by 2026.
- Science sectors such as renewable energy, sustainable agriculture, clean transportation, and circular economy are set to receive funding under BII's climate finance strategy, which aims to drive Vietnam's green transition.
- BII's approach to investing in these areas is patient and flexible, aiming to de-risk projects and demonstrate their commercial viability, thus attracting further private sector investment in sustainable living initiatives.
- The renewable energy sector, particularly, has seen a boost with BII's investment in the Dam Nai wind farm, a key asset in their renewable energy platform in Vietnam.
- The World Bank estimates that $368 billion is required for Vietnam's green transition. BII's investments, by fostering partnerships with organizations like FMO and SUSI Partners, can help mobilize the private sector's involvement in the country’s sustainable development and climate action.
- Apart from financial inclusion in climate-related projects, investments by organizations like BII also have a social impact, as they support women-led small businesses and contribute to Vietnam's development finance, helping to reduce the country's dependence on fossil fuels and promote a sustainable lifestyle and real-estate market.
