Pilot green bond issuance through different issuer types (corporate, sovereign, municipal) is one of the steps to accelerate the development of Vietnam’s green bond market, recommended in the freshly launched report by GGGI.
On June 25, the Global Green Growth Institute (GGGI) launched its report “Green Bonds Make More Cents?” which analyzes trends of green bond markets globally and the experience that Vietnam can consider in order to develop its own domestic green bond market. Representatives from leading international agencies also joined the launch webinar to share their experience and insights from different perspectives. Over 70 domestic and international participants joined the event, showing the large interest in the topic.
The report was prepared within the framework of collaboration between GGGI and Ministry of Finance and the Government of Luxembourg. In the opening remarks, Dr. André Weidenhaupt (Director General, Ministry of Environment, Climate and Sustainable Development, the Government of Luxembourg) and Ms. Hanh Le (Vietnam Country Representative, GGGI) highlighted the importance of promoting sustainable finance in Vietnam. Dr. Weidenhaupt welcomed the strong collaboration between Government of Luxembourg and Vietnam in climate actions, especially where Luxembourg can share its experience being an international sustainable finance center.
Ms. Hanh Le further noted 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. Green bonds will open a new capital mobilization channel for long-term investment projects in the infrastructure and renewable energy sectors which are not fully satisfied by traditional financial products.
The report highlights international practices in developing green bond markets in Southeast Asia, Central Asia and Europe, and suggested a broad range of policy recommendations for Vietnam from the perspectives of the first movers. “The report is published at the right timing to reinforce green bond market development in Vietnam”, noted Dr. Weidenhaupt.
The report launch was followed by a panel discussion which saw participation from leading Green Bond market stakeholders like Luxembourg Stock Exchange, Luxembourg Sustainable Finance Initiative, International Capital Market Association and international issuers and investors in Green Bonds like Asian Development Bank and International Finance Corporation. In the panel discussion, Mr. Mushtaq Kapasi, Managing Director, Chief Representative, Asia-Pacific, International Capital Market Association shared the recent update of their flagship Green Bonds Principle (GBP). Mr. Kapasi highlighted the emphasis of the GBP 2021 on independent verifiers. They play an important role in ensuring the green integrity of projects and hence increase the confidence of investors. There is currently limited capacity in Vietnam market to offer this service.
Recognizing this gap, GGGI, in partnership with 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 8 local companies. This is one of the fundamental building blocks in developing a robust domestic green bond market for Vietnam, as part of the transition to a green economy.
This 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 Ministry of Finance.
The report can be accessed via: https://gggi.org/report/green-bonds-make-more-cents/