In 2012, the Vietnamese Government approved the Green Growth Strategy (GGS) as a new orientation towards the overall objective of quality of growth. In this context, around two thirds of capital needed for green investments should come from the private sector. However in reality, financial intermediaries play the crucial role in mobilizing and channeling private funds for green investments and green sector development in Viet Nam.
Nevertheless, effective banking, finance policy frameworks and instruments are not in place to sufficiently support this process. Simultaneously, awareness and capacity for developing and implementing these are at early stage.
Thus, the project aims at supporting partners in addressing these challenges.
The overall objective is a reform of the financial system towards environmentally and socially sustainable development to support green growth and climate change adaptation and mitigation in Viet Nam
The project intervenes primarily at the macro level and consists of two core areas of the financial sector: green banking reform and green capital market development.
The project provides technical assistance to partner institutions responsible for key areas of the green financial sector reform, namely the State Bank of Vietnam (the Central Bank in Vietnam), the Ministry of Finance, the State Securities Commission under the Ministry of Finance, and commercial banks, stock exchanges through policy advice and capacity development activities in order to establish a suitable framework for financing green investments.
The project acts on three levels:
1. Analysis of the regulatory and policy framework for green transformation and its adaptation to current development and the new policy orientation, including formulation of green banking strategy orientation, green credit policy, green capital market policy orientation and green listing policy.
2. Reform of processes and instruments, developing innovative instruments for financing green investments including credit facilities and programs for green projects and green sectors, refinancing scheme, environmental and social risk management in credit activities, green bonds, and green indexes.
3. In-service training and specialized training for partner staff to improve their competency in developing and implementing green banking and finance policies and programs and providing green financial products.