Vietnamese EV maker VinFast receives $135 mln in green funding led by ADB

By Reuters October 23, 2022 | 11:00 pm PT

A general view of VinFast's factory in Hai Phong City, Vietnam, April 22, 2021. Photo by Reuters/Thanh Hue

VinFast said Monday it has received a $135 million financing package led by the Asian Development Bank (ADB), part of a push by the bank to boost climate-friendly investments in the region.

VinFast, the auto arm of Vietnam's largest conglomerate Vingroup JSC, said last year it planned to raise at least $400 million via its first green loan to fund its manufacturing of electric vehicles.

"The assistance comprises 7-year tenor financing, including a $20 million loan funded by ADB, parallel loans

of $87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to $28 million," a joint statement by the two organisations said.

Export Finance Australia, the Finnish Fund for Industrial Cooperation, Oesterreichische Entwicklungsbank AG, and responsability also participated in the parallel loans, the statement added.

VinFast, which began operations in 2019 and stopped making combustion engine-driven cars in August, is targeting global electric vehicle sales of 750,000 per year by 2026. It is also gearing up to expand in the U.S. market.

Vietnam's transport sector accounts for 18% of the country's greenhouse gas emissions, according to official data.

According to ADB, the funding will also support Vietnam's efforts to achieve net-zero greenhouse gas emissions by 2050.