To reduce 8-10% of greenhouse gas emissions as planned, from now to 2020, Vietnam will need US$ 30 billion which is not a small amount of money. In such conditions, the “green” bond is considered an effective solution that can help mobilize hundreds of billions of dollars a year for the development of a clean and sustainable economy.
Era of green bond starts
Green bond is defined as a type of fixed-income financial instrument in order to attract capital for environmentally benefited projects. Accordingly, the profits from the bond will be committed to investing in programs to strengthen the adaptation and mitigation of climate change, including clean energy projects, efficient use of energy, public transport and water. The green bond can be released by the government, commercial banks, development banks and international financial institutions.
It can be said that green bond is considered a channel to attract capital effectively for solutions to climate change adaptation and mitigation in many countries around the world.
The bankers said that the era of green bonds has began when this market has achieved tremendous growth in recent years, with average annual growth rate up to 55% / year. By 2013, the value of global green bonds reached 11.4 billion dollars, 3 times higher than that of 2012.
The engine that has boosted the green bond market rapidly stems from the need of capital of issuers and investors’ commitment to fund the anti-climate change, as well as the dual benefits that it brings about for both investors and issuers.
The emergence of green bonds has demonstrated the contributions of the private sector in the fight against climate change.
Opportunities for green businesses
The study of international organizations has shown that climate change could make Vietnamloss US$ 15 billion a year, equivalent to 5% of GDP. Before the serious impacts of climate change to the socio-economic development, Vietnamgovernment has carried out many policies to create a favorable legal corridor for the development and application of environmentally friendly technologies.
According to Rachel Kyte World Bank Group Vice President and Special Envoy on Climate Change, green bonds are creating a new capital flows for clean and sustainable economies’ development.
Prime Minister issued Decision No. 2612/QD-TTg dated Dec 30, 2013 approving the strategy to use clean technology by 2020 with a vision to 2030. The overall goal is to use clean and environmentally friendly technology, to increase energy and natural resources efficiency, to reduce gas emissions in industrial production in order to promote green growth, reduce the impacts of climate change as well as improve the life’s quality of the community. Accordingly, by 2020, 100% of new investment projects which consume lots of energy or potentially cause serious pollution to the environment must satisfy the technical standards, regulations on clean technology.
Clean technology is becoming a general trend of businesses in Vietnam. However, the biggest barrier for Vietnam’s enterprises is lack of capital investment to renovate and replace existing technology.
In this context, green bonds are considered as a solution to support enterprises which intend to change toward “green and clean” technology. Currently, the State Bank of Vietnam (SBV) is preparing a draft Circular on environmental and social risk management in credit granting of credit institutions and branches of foreign banks.Under the draft Circular, the SBV encourages credit institutions to conduct proactively environmental and social risk management in internal operation in order to mitigate negative impacts on environment and society, optimize the use of resources, proactively develop and innovate products, seek and seize eco-friendly business opportunities.
Minh Tong
Đăng ký: VietNam News