Green bonds pique Vietnamese investor interest

By Van Pham   April 19, 2021 | 07:00 pm PT
The global green bond market has surpassed the $1 trillion cumulative issuance since its inception in 2007, an impressive growth rate, according to Climate Bonds green bond database. Simultaneously, appetite from the emerging markets is also on the rise.

At the 7th Joint Meeting of the ASEAN Finance Ministers and Central Bank Governors in Brunei last month, Deputy Minister of Finance Tran Xuan Ha affirmed Vietnam's commitment in promoting green and sustainable financial markets, and accelerating the development of green bond market in Vietnam.

In this context, the webinar "Green Bonds - The fast-emerging market", co-organized by the Global Green Growth Institute (GGGI) Vietnam and Vietnam Community of Investment Professionals (A CFA Society in formation), was on air on March 26. The webinar aims at sharing international practices on green bonds and insights into the Vietnamese market.

Hanh Le, GGGI Vietnam Country Representative, welcomed the Government of Vietnam’s commitment on developing green bonds market.

Hanh Le, GGGI Vietnam Country Representative, welcomed the Government of Vietnam’s commitment on developing green bonds market.

Opening the webinar, Hanh Le, GGGI Vietnam Country Representative, welcomed the government’s commitment. "Viet Nam is a shining star in Covid response, but our economy is not exempted from the global downturn. This is a challenge, but I also see an opportunity to build back better. GGGI stands by Vietnam to support its implementation of a successful green recovery", said Hanh Le.

Srinath Komarina, Program Manager of GGGI Vietnam, international expert in green finance, claimed that 2020 marked the leap of sustainable finance, hitting a new record with the highest issuance in a year, at $732.1 billion (30 percent increase from 2019). Meanwhile, green bond grew to a record $305.3 billion and social bonds jumped seven folds to $147.7 billion.

Discussion highlighted that implications from international and regional markets suggested green bonds have great potential in Vietnam though the market still lacks preferable conditions for green projects. Incentives from the government like tax exemption for coupons of green bonds as well as local capacity building for green bond verifiers to decrease issuance costs were some suggestions from domestic investors.

Srinath Komarina, program manager of GGGI Vietnam. Photo by: GGGI Vietnam.

Guest speaker - Srinath Komarina - shared results from GGGI Viet Nam’s Green Bond Market Survey.

Participants also inquired about the application of the EU’s Sustainable Finance Disclosure Regulation in Viet Nam and technicalities of rating green bonds.

The webinar demonstrated peak interest for green bonds from the Vietnamese market. It would be followed by a series of trainings and webinars on different topics of green bonds including executive trainings on sustainable finance and capacity building for green bond issuers, investors and verifiers, within the framework of "Vietnam Green Bond Readiness Program". The program, implemented under an MOU signed between GGGI and the Ministry of Finance in October 2020, aims to develop the green bond market in Viet Nam through policy advice, capacity building and technical assistance on actual green bond issuance.

GGGI was established as an international intergovernmental organization in 2012 at the Rio+20 United Nations Conference on Sustainable Development. Its vision is "a low-carbon, resilient world of strong, inclusive, and sustainable growth" and its mission "to support members in the transformation of their economies into a green growth economic model." GGGI does this through technical assistance to: reduce greenhouse gas emissions in line with the Paris Agreement; create green jobs; increase access to sustainable services (such as clean affordable energy, sustainable waste management); improve air quality; sustain natural capital for adequate supply of ecosystem services; and enhance adaptation to climate change.

CFA Institute is the global association of investment professionals that sets the standards for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global

financial community. The end goal is to create an environment where investors’ interests come first, markets function at their best, and economies grow. CFA Institute has more than 178,000 active members in 162 markets, including 156 member societies. Vietnam has more than 270 CFA charterholders.

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