Experts share global experience in developing green bond market

In a report it issued in June titled ‘Green Bonds Make More Cents?’, the Global Green Growth Institute (GGGI) analyzed key trends in global green bond markets and the experiences that Vietnam could utilize to develop its market. GGGI is a Seoul-based intergovernmental organization that aims to promote strong, inclusive green growth across developing and emerging countries.

The report was prepared within the framework of collaboration between GGGI and Ministry of Finance and the Government of Luxembourg under Viet Nam Green Bond Readiness Program.

Dr. André Weidenhaupt (Director General, Ministry of Environment, Climate and Sustainable Development, the Government of Luxembourg) welcomed government of Vietnam’s commitment for climate actions and green finance. Photo by GGGI.

At a webinar held to launch the report, Dr. André Weidenhaupt, Director General of the Ministry of Environment, Climate and Sustainable Development of Luxembourg, underscored the close collaboration between Luxembour and Vietnam in climate actions.

Hanh Le, Vietnam Country Representative (until June 2021), GGGI, pointed out that in the context of post-Covid recovery, countries are urged to "build back better" to create a more inclusive and sustainable economy that is climate resilient. "The development of green bonds market would facilitate market-based long-term financing for infrastructure projects in green sectors such as renewable energy, waste, circular economy, and other relevant sectors, which might not be fully satisfied by traditional financial products", she said.

Hanh Le (Vietnam Country Representative, GGGI) highlighted the role of green bonds as a capital mobilization channel for green projects in the post-Covid time. Photo by: GGGI.

The report, highlighting international practices in developing green bond markets in Southeast Asia, Central Asia and Europe, suggested a broad range of policy recommendations for Vietnam.

"The report is published at the right time to reinforce green bond market development in Vietnam," Dr Weidenhaupt noted.

Mushtaq Kapasi, Managing Director, Chief Representative, Asia-Pacific, International Capital Market Association emphasized the importance of capacity building for independent verifiers on green bond principles. Photo by: Finance Asia

Mushtaq Kapasi, Managing Director, Chief Representative, Asia-Pacific, International Capital Market Association, spoke about the recent updates to the association's green bonds principle (GBP), including an emphasis on the GBP 2021 in the role of independent verifiers in ensuring the green integrity of projects and thus adding to investors’ confidence.

But there is currently limited capacity in Vietnam for this specialized service.

Recognizing this gap, GGGI, in partnership with the Climate Bonds Initiative, organized the first green bond verification and certification workshop in Vietnam from June 22 to July 1 with more than 30 participants from eight companies attending. This is considered one of the fundamental building blocks in developing a domestic green bond market for Vietnam as part of its transition to a green economy.

The report and the training workshop are part of the "Green Bond Readiness Program" funded by the government of Luxembourg and implemented by GGGI, in partnership with Vietnam Ministry of Finance.

The report can be accessed via https://gggi.org/report/green-bonds-make-more-cents/