Boosting its support for Vietnam’s green transition and sustainable development, the International Finance Corporation (IFC) has scaled up its long-term investment in the country with a strong focus on climate finance in the last fiscal year.

The new commitments aim to bolster Viet Nam’s shift towards a low-carbon economy while enhancing private-sector resilience and competitiveness, IFC said in a statement on Thursday.

It is noted that IFC’s total commitments in Vietnam reached over $1.6 billion, including more than $750 million in long-term finance, in the fiscal year ending June 30.

Notably, a total of $310 million in new long-term financing from own account was committed to projects that will help address climate change and marine-plastic waste, a record for Vietnam.

The country received the highest volume of IFC’s own-account climate financing in fiscal year 2024 in the East Asia and the Pacific region.

Investment and advisory programs in the country also addressed other core development challenges, from food security and trade facilitation to manufacturing competitiveness.

Notably, IFC provided $896 million in short-term trade and supply chain finance to local companies to boost trade flows, helping them grow business and create more jobs.

IFC also supported Vietnam’s first blue bond and green bond issued by Southeast Asia Joint Stock Commercial Bank (SeABank), which will help promote a sustainable ocean economy and increase climate resilience.

SeABank was also the first private bank to issue a green bond in the country with IFC’s support.

IFC also facilitated the Asian Infrastructure Investment Bank (AIIB) to invest $75 million in SeABank climate bonds, alongside IFC’s own investment.

Setting a precedent, IFC facilitated the issuance of the country’s first local currency sustainability-linked bonds, issued by BIM Land Joint Stock Company and its subsidiary, Thanh Xuan Joint Stock Company, which will help to foster a more sustainable tourism sector.

Alongside the financing, in partnership with the Australian government, IFC supported client banks and companies in the development of sustainable finance frameworks, laying the groundwork to scale up climate investments.

To promote greening the banking sector, in partnership with the Swiss State Secretariat for Economic Affairs (SECO), IFC supported the State Bank of Viet Nam in issuing environmental risk management regulations, which will create a level playing field and help local banks enhance their management systems to mitigate financial risks related to the environment and climate.

Additionally, IFC, along with other development partners, is working with regulators to develop a green taxonomy for Viet Nam.

“As a global leader in climate finance, IFC is well positioned to introduce innovative climate financing instruments to the local market as an alternative source of capital for climate-smart projects,” said Thomas Jacobs, IFC Country Manager for Viet Nam, Cambodia, and Lao PDR.

“IFC’s funding will signal the viability of a climate-finance market in Viet Nam, encouraging banks to tap into this new segment and pushing real sector investors to align their interests with responsible investment and mobilize funding from sustainable capital markets, supporting the country’s low-carbon growth model,” he added.

In the real sector, IFC advised agribusinesses on sustainable-rice farming and manufacturers in hard-to-abate industries on adopting greener solutions.

With IFC’s support in the improvement of Vietnam’s legal framework for carbon markets, a revised decree on GHG emissions mitigation and the development of carbon markets is expected to be issued soon.

Efforts are also focused on promoting GHG reduction measures in the livestock sector and facilitating Vietnamese livestock companies to participate in the carbon market after adopting carbon emissions mitigation.

Supporting small and medium enterprises—including women-owned businesses—the backbone of Vietnam’s economy, IFC also partnered with VPBank to set up a $30 million supply-chain finance facility to back local importers and exporters.

A $60-million platform, co-funded by IFC and Welcome Financial Group, aims to help financial institutions resolve their non-performing loans, freeing up capital for new lending and allowing defaulted borrowers to rebuild their creditworthiness.

“As Vietnam advances on its path to becoming a high-income economy, the private sector has a critical role to play in driving sustainable economic growth,

“IFC’s robust program in the last fiscal year is a testament to our commitment to supporting Viet Nam in building a more resilient and greener economy that can navigate both global and domestic challenges,” Jacobs added.

According to the statement, IFC committed a record $12.2 billion to 123 projects in Asia Pacific in fiscal year 2024, an 11 percent year-on-year increase.

It noted its projects delivered significant impact across the region, addressing pressing development challenges, including climate change, gender inequality, food insecurity, and financial inclusion, while creating jobs and improving services.

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.

The institution works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2024, it committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet.

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