BIDV successfully issues VND 2,500 billion bonds to finance environmental projects
With this green bond, BIDV is set to inspire other corporations and commercial banks to join the effort in greening the economy.
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| Green bond is an effective instrument to increase BIDV’s capacity in implementing the our green strategy. |
On 25/10/2023, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) becomes the first bank to issue green bonds in compliance with the Green Bond Principles of the International Capital Market Association (ICMA) in domestic market. The proceeds will be used to finance green, energy saving, emission reduction, and environmental protection projects, in line with BIDV’s Green Bond Framework.
This is the first time that the Vietnamese capital market has witnessed a domestic bond issuance with a green bond framework scored by Moody’s - the leading international credit rating agency. BIDV achieved a very high sustainability quality score from Moody’s for the Green Bond Framework of credit institutions, thereby confirming the compliance, transparency at a high level in project selection, appraisal, lending, management regimes, reporting of BIDV.
This is also the first senior, unsecured and unguranteeed green bond issue in Vietnam, demonstrating high creditworthiness and reputation of the issuer. Accordingly, all investors participating in transactions are reputable insurance and funds management companies affiliated to leading global insurance groups.
According to Mr. Tran Long – Senior Executive Vice President of BIDV: “BIDV has a clear strategy on green banking and green credit development linked to the requirement of promoting green credit growth and environmental and social risk management (ESG) in lending activities and willing to provide funding for clients in low-carbon emission, adapting to climate change sectors. Green bond is an effective instrument to increase BIDV’s capacity in implementing the our green strategy. With the determination to accompany the Government in fulfilling the commitment to achieve Net Zero emissions by 2050, we hope that our pioneering green bond issue in line with international standard will be an inspiration for others in building a strong, green and sustainable development future”.
According to Ms.Carolyn Turk, the World Bank Country Director for Viet Nam: “This is a meaningful activity ahead of COP28 to support Viet Nam’s climate goals, contributing to a livable planet. The World Bank is pleased to support Viet Nam in its effort to achieve a net-zero carbon emission target by 2050. Green bond issuance by commercial banks is one of many important steps towards achieving such target. With this green bond, BIDV is set to inspire other corporations and commercial banks to join the effort in greening the economy”.
“With responsible investing policies, we seek to align ourselves to global sustainability initiatives and our investment teams are empowered to integrate Environment – Social – Governance (ESG) considerations consistent with our own and Prudential’s investment philosophies and processes. Investing in BIDV green bonds is the evidence of Eastspring Vietnam and Prudential Vietnam's efforts towards the sustainable development goals in Vietnam. We highly appreciate BIDV's being the first commercial bank in Vietnam to successfully issue green bonds according to the ICMA Green Bond Principles, demonstrating the bank's commitment to transparency, reliability and effectiveness in using the proceeds issued by bonds.” - Mr. Ngo The Trieu – CEO of Eastspring Vietnam – Investor stated.
This green bond issue has marked an important milestone on BIDV’s journey of “Creating sustainable values”, continuing to reaffirm its pioneering position and leading the market in green and sustainable development.
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| In 2022, BIDV was honored to be one of the two pioneering units selected to train and build the Green Bond Framework under the technical assistance program between the State Bank Vietnam (SBV) and the German International Cooperation Organization (GIZ). Based on the knowledge acquired from the training program and studying the Handbook on issuing green bonds, social bonds and sustainable bonds issued by the State Securities Commission of Vietnam, BIDV drafted the Green Bond Framework for BIDV in 2022. In 2023, with technical assistance from the World Bank (WB) and IFC through their Joint Capital Markets Program (J-CAP), BIDV completed the construction and issuance of the green bond framework in line with the best international practices in accordance with ICMA’s green bond principles. J-CAP is a global program that aims to help mobilize long-term private sector funds via capital markets to finance sustainable economic development in select countries. In Vietnam, the J-CAP initiative is implemented in partnership with the Australian government and the Swiss State Secretariat for Economic Affairs (SECO). BIDV’s Green Bond Framework was highly scored by Moody’s Credit Rating Agency with a SQS2 sustainability quality score (very good), which is the second highest level in a total of five score levels. “BIDV has described the main characteristics of the green bonds within a formalized framework that covers the four core components of the International Capital Market Association's (ICMA) Green Bond Principles (GBP) 2021 (including June 2022 Appendix 1). Furthermore, the framework demonstrates a significant contribution to sustainability” - Moody’s emphasized in the Second Party Opinion. As of 30/9/2023, BIDV has financed about 1,500 customers with 1,900 green projects /green credit plans with a total outstanding loan of up to 71,000 billion VND, accounting for approximately 5% of BIDV’s total outstanding loan, increasing by 11% compared to 2022. At the same time, BIDV has significant experience and leading capacity in receiving and implementing international entrusted funds with programs and projects for sustainable development goals |
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