Against the backdrop of Vietnam’s long-term demand for capital to support green transformation—forecast to far exceed the capacity of the state budget—mobilizing medium- and long-term funding from the capital market, particularly the bond market, has become an inevitable direction for credit institutions and enterprises. This approach not only complements traditional credit channels but also serves as an important instrument for mobilizing social resources in pursuit of green growth and sustainable development.

As a State-owned commercial bank playing a leading role in agriculture and rural development, Agribank has proactively adjusted its capital strategy by integrating green credit with capital mobilization from the bond market, thereby laying the groundwork for the development of green financial instruments in the new phase of growth.

Green credit has long been identified by Agribank as a core pillar of its sustainable capital strategy. As of the second quarter of 2025, the Bank’s outstanding green credit balance reached nearly VND 28,784 billion, serving tens of thousands of customers nationwide, with renewable and clean energy accounting for the largest share. Agribank has focused its lending on projects in wind power, solar power, biomass energy, sustainable forestry, green agriculture, and high-tech agriculture—demonstrating its commitment to promoting energy transition and sustainable production.

However, many green projects, particularly in agriculture and renewable energy, involve long investment cycles, extended payback periods, and higher risks compared to traditional credit. Relying solely on short-term deposit mobilization to finance such projects could exert pressure on liquidity and capital adequacy ratios. Therefore, diversifying funding sources—especially through medium- and long-term bond issuance—has become a strategic requirement for Agribank to extend funding tenors, enhance maturity risk management, and access institutional investors.

In 2025, Agribank implemented public bond issuances with the objective of strengthening its financial capacity, optimizing its funding structure, and meeting medium- and long-term credit demand. Notably, for the first time, the Bank differentiated between conventional bonds and bonds issued specifically for green credit purposes, although these issuances have not yet been labeled as “green bonds” under international standards. This approach reflects a new mindset in capital management, whereby the intended use of funds is defined at the mobilization stage rather than being controlled solely at the lending stage.

Alongside capital mobilization, Agribank has also developed and implemented an internal Environmental, Social, and Governance (ESG) management framework, integrating environmental and social criteria into its credit appraisal, risk management, and post-lending supervision processes. This framework is regarded as a critical foundation for the Bank’s future development of green financial products, including green bonds in line with international standards.

By proactively bridging green credit with the bond market, Agribank has not only expanded the capital space for green projects but also sent a positive signal to Vietnam’s financial market: a large-scale State-owned commercial bank is ready to engage more deeply in the green capital market, contributing to shaping investor expectations regarding financial products associated with sustainable development and transparent capital flows.

Kylie Nguyen