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The banking industry has provided about VND 84,000 billion to renewable energy

25/12/2020

As of June 2020, the total outstanding "green credit" for renewable energy is about 84 trillion dong (an increase of about 30 trillion dong compared to the end of December 2019).

Information presented at the training workshop " Banking industry on the path of capital shift to green energy" recently organized by the Vietnam Banking Association in collaboration with the World Wide Fund for Nature (WWF) in Hanoi.

Mr. Nguyen Thanh Son, Director of the Training Center (Vietnam Banking Association), said the report on global investment trends for renewable energy in 2019 shows that, in the period from 2010 to 2019, more than USD 2,600 billion put into this sector, in which solar energy attracts the most investment (accounting for about 52%), followed by wind energy (accounting for about 41 %), biomass and waste energy are of 4%, while geothermal and ocean thermal energy attract the lowest investment. The banking and private sectors are at the forefront of investing in renewable energy and this investment also offers many economic opportunities.

According to Mr. Son, access to sustainable energy is a breakthrough for the underprivileged and developing countries by opening the door to sustainable development, contributing to the development of people from all walks of life. Vietnam has issued a series of preferential policies to encourage the development of renewable energy to attract investment from businesses and banks, such as credit provision, corporate income tax exemption/reduction, etc. With consistent policies and specific support mechanisms, there is a wave of domestic and international investment in renewable energy in Vietnam.

According to Mr. Son, in 2019, reports show that investment in renewable energy rose to third place, after fintech and education. Meanwhile, in 2018, this field only ranked 10th in the ranking of the most attractive investment fields in the country.

For the banking sector, to implement the Green banking development project in Vietnam under Decision No. 1604/2018/QD-NHNN, as of the end of June 2020, the total outstanding loans as green credit for renewable energy of about VND 84,000 billion (an increase of about VND 30,000 billion compared to the end of December 2019).

However, according to Mr. Son, despite the growing opportunities of sustainable finance, banks and financial institutions in Southeast Asia in general and Vietnam in particular are still facing many barriers to replicate sustainable projects in the region in the short to medium term.

With great potential for renewable energy, Vietnam is one of the most potential energy markets in Southeast Asia, said Phung Thanh Xuan, Manager of Private Sector Development Advisory Service at MCG. The rate of electrification in the country reaches 99%. In addition, renewable energy development receives great support from the Government of Vietnam through policy reform and improvement of the investment environment. Vietnam opens its doors to investments in wind, solar and other renewable energy production to promote low carbon market development and national economic growth.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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