Four Japanese banks will co-finance a total of $300 million in credit lines to power producers using renewable energy in Vietnam to help the growing Southeast Asian country decarbonize.
The Japan Bank for International Cooperation (JBIC), Mizuho Bank, Joyo Bank and Shiga Bank will provide funds through Vietcombank, the nation’s major bank.
The Vietnamese bank will in turn provide subleasing loans, mainly to local businesses. By indirectly utilizing Vietcombank’s credit information, the Japanese banks expect that high-risk loans can be provided swiftly.
Vietnam has set a goal of achieving net-zero carbon emissions by 2050. As electricity consumption rapidly increases amid economic growth, demand is growing for alternative power sources to replace coal-fired power generation, which accounts for approximately 50% of total power generation. Expanding the introduction of renewable energy is key to reaching the target.
In January, JBIC issued a joint statement related to the Vietnam Climate Finance Framework, which aims to promote Vietnam’s decarbonization in partnership with U.S. and Australian government financial institutions and others. This co-financing by the four Japanese banks is JBIC’s first project under this framework.
Tomoya Onishi
