- Region: Asia
- Untied Loans
The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed today a loan agreement to set up a credit line totaling up to USD300 million, of which JBIC's portion is USD165 million, with Vietnamese state-owned commercial bank, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank)*1. This credit line is co-financed with Mizuho Bank, Ltd., the Joyo Bank, Ltd., and the Shiga Bank, Ltd. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.
This credit line is intended to finance, through Vietcombank, renewable energy projects in Vietnam, as part of JBIC's GREEN operations*2.
At the 26th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26) in November 2021, the Government of Vietnam announced its national goal to achieve net zero emissions by 2050. Also, according to the Government's Eighth Power Development Plan (PDP 8)*3, which is under preparation, renewable energy will reach 72,238MW of the country's total power generation capacity of 156,385MW in 2030. Vietcombank, which also plays a role of implementing the Government's policies as a state-owned commercial bank, is actively expanding support in such sectors as renewable energy based on the Government's decarbonization policy. Through the loan, JBIC supports the Government of Vietnam's and Vietcombank's initiatives for preserving the global environment.
The loan is in line with the Asia Zero Emissions Community (AZEC) Concept, which is led by the Government of Japan, pursuing carbon neutrality and economic growth depending on the circumstances of each country. It also aligns with the Just Energy Transition Partnership (JETP), which was agreed on by the Government of Vietnam and its partner countries, including Japan and the United States, in December 2022. This is the first loan JBIC extends under the Vietnam Climate Finance Framework (VCFF), which was announced under the Australia-Japan-United States Trilateral Infrastructure Partnership (TIP) in January 2023*4.
As Japan's policy-based financial institution, JBIC will continue to support global environmental preservation efforts in cooperation with local financial institutions by drawing on its various financial facilities and programs for structuring projects and by performing its risk-assuming function.
The agreement signed this time is of JBIC's second credit line for Vietcombank, following the first signed in June 2019 as part of JBIC's GREEN operations.
PDP 8 drafted as of August 2022.