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Green bonds pique Vietnamese investor interest

The global green bond market has surpassed the $1 trillion cumulative issuance since its inception in 2007, an impressive growth rate, according to Climate Bonds green bond database. Simultaneously, appetite from the emerging markets is also on the rise.

 

At the 7th Joint Meeting of the ASEAN Finance Ministers and Central Bank Governors in Brunei last month, Deputy Minister of Finance Tran Xuan Ha affirmed Vietnam’s commitment in promoting green and sustainable financial markets, and accelerating the development of green bond market in Vietnam.

 

In this context, the webinar “Green Bonds – The fast-emerging market”, co-organized by the Global Green Growth Institute (GGGI) Vietnam and Vietnam Community of Investment Professionals (A CFA Society in formation), was on air on March 26. The webinar aims at sharing international practices on green bonds and insights into the Vietnamese market.

 

Opening the webinar, Hanh Le, GGGI Vietnam Country Representative, welcomed the government’s commitment. “Viet Nam is a shining star in Covid response, but our economy is not exempted from the global downturn. This is a challenge, but I also see an opportunity to build back better. GGGI stands by Vietnam to support its implementation of a successful green recovery”, said Hanh Le.

 

Srinath Komarina, program manager of GGGI Vietnam. Photo by: GGGI Vietnam.

Srinath Komarina, program manager of GGGI Vietnam. Photo by GGGI Vietnam.

 

Srinath Komarina, Program Manager of GGGI Vietnam, international expert in green finance, claimed that 2020 marked the leap of sustainable finance, hitting a new record with the highest issuance in a year, at $732.1 billion (30 percent increase from 2019). Meanwhile, green bond grew to a record $305.3 billion and social bonds jumped seven folds to $147.7 billion.

 

Discussion highlighted that implications from international and regional markets suggested green bonds have great potential in Vietnam though the market still lacks preferable conditions for green projects. Incentives from the government like tax exemption for coupons of green bonds as well as local capacity building for green bond verifiers to decrease issuance costs were some suggestions from domestic investors.

 

Participants also inquired about the application of the EU’s Sustainable Finance Disclosure Regulation in Viet Nam and technicalities of rating green bonds.

 

The webinar demonstrated peak interest for green bonds from the Vietnamese market. It would be followed by a series of trainings and webinars on different topics of green bonds including executive trainings on sustainable finance and capacity building for green bond issuers, investors and verifiers, within the framework of “Vietnam Green Bond Readiness Program”. The program, implemented under an MOU signed between GGGI and the Ministry of Finance in October 2020, aims to develop the green bond market in Viet Nam through policy advise, capacity building and technical assistance on actual green bond issuance.

 

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