Hanoi (VNA) - Vietnam still lacks specific and distinctive green financial products. While the legal framework is relatively complete, it remains inconsistent overall, particularly in areas such as green classification and green project certification.
According to experts, Vietnam has many opportunities to develop green finance. It is necessary to implement synchronised policies and financial-monetary solutions to help the country achieve its green, inclusive, and sustainable socio-economic development goals.
Economic expert Can Van Luc pointed out that opportunities for green finance in Vietnam are abundant. The legal framework for green credit, green bonds, and green investment funds is gradually being improved. The green growth strategy demands a substantial source of capital from green credit and green securities. COP26 commitments also require Vietnam to make significant investments in renewable energy, waste management, green agriculture, and low-carbon transport.
However, Dr. Can Van Luc also high-lighted several challenges for green finance in Vietnam.
Specifically, the market still lacks distinctive green financial products (including both green credit and green securities).
While the legal framework is quite comprehensive, it lacks overall consistency, particularly regarding the classification and certification of projects eligible for green credit or green bond issuance.
As an investor in the market, Quan Duc Hoang, a member of the Board of Directors at Amber Fund Management Co. and Chairman of A+ Investment Fund, pointed out one of the key challenges in operating green investment funds in Vietnam.
He said many businesses still lack a clear understanding of green standards within their industries. As a result, investment funds have developed their own criteria, which also provides a range of options for both the funds and the businesses.
Synchronised solutions needed
To promote green capital flow into the economy, Can Van Luc recommended implementing synchronized solutions. This includes linking green development strategies and financial planning with national socio-economic development plans. The government should soon issue a “green classification” list, identifying priority sectors and establishing standards for green certification.
Moreover, the government should develop mechanisms and criteria for measuring and inventorying greenhouse gas emissions. Policies should be implemented to influence behavioral changes (in consumption and living habits) and investments in green infrastructure, encouraging and supporting innovation. To realise these policies, the government must provide financial support (through taxes, fees, and interest rates) for green products and services.
Specifically, it should consider establishing a “Green Transition Fund,” a “Green Venture Fund,” and a “Green Growth Fund.” Additionally, the government should attract private sector investment in green projects, build a green finance ecosystem, create a carbon credit market, and develop human resources for green transformation.
This includes building an information and data infrastructure to forecast and manage environmental and climate change risks.
Le Hoang Lan, a representative from the Finance and Monetary Department of the Ministry of Planning and Investment, emphasized that to overcome existing obstacles and promote green finance, Vietnam needs to implement three key groups of solutions to improve the legal framework.
The first group relates to green credit. Financial institutions should be supported in accessing long-term capital and preferential rates or provided with mechanisms to share lending interest rates so that they can offer long-term loans with favorable rates to green sectors and industries.
The second group concerns green bonds. Authorities need to enhance transparency in the disclosure of information by green bond issuers. Reports on the use of funds raised through green bonds should be transparently and objectively assessed by specialised organisations, ensuring that investors can track how their funds are utilized in each green project.
The third group focuses on guiding businesses on prioritised green project categories and offering incentives according to a roadmap through 2050./.
