| Company | GuarantCo |
| Sector | Power/Energy |
| Country | Vietnam |
| Total Project Cost | USD 50m |
| PIDG Commitment |
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| Dates of PIDG involvement |
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Despite the growth of Vietnam’s capital markets in the past decade, several challenges remain with respect to mobilising private capital at the scale and speed required to meet the financing needs of renewable infrastructure assets in the country. Increasing the availability of finance for renewable energy is crucial for Vietnam to improve its energy mix and increase the prevalence of non-hydro renewables.
The Government of Vietnam has ambitious plans to increase green bond issuances in the country. However, only two such instruments were issued in the country to date (by municipalities in 2016) and a corporate is yet to issue a green bond in Vietnam.
PIDG provided a c. USD 50 million partial credit guarantee to support a c. USD 75 million bond issuance by EVN Finance Joint Stock Company (EVNFinance), a leading non-bank financial institution in Vietnam. This landmark transaction is Vietnam’s inaugural onshore, local currency, internationally verified green bond. It is also the first corporate bond to attract institutional investors in the market including Manulife and AIA.
The bond proceeds will allow EVNFinance to issue longer term loans to finance capital expenditure of green infrastructure aligned with the company’s Green Bond Framework including loans towards the fast-growing rooftop and ground-mounted solar sub-sectors and electric vehicle projects.
This pioneering transaction will help improve the resilience of the bond market in Vietnam, which can be classed as highly underdeveloped.
It is hoped this transaction will lead to further green bond issuances, with replication of the longer tenor achieved in local currency and requiring only a partial guarantee (where 100 per cent guarantees are the norm).
70 per cent of the bond proceeds were used to launch Vietnam’s first all-electric taxi service in Hanoi, with a fleet of 1,945 cars.
