On 28th August 2024, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) completed the successful issuance of a VND 3,000 billion Sustainability Bond, aligned with the International Capital Market Association (ICMA)’s Sustainability Bond Guidelines. BIDV will use the funds raised for environmentally and socially beneficial projects.

Mr. Doan Viet Nam, Senior Executive Vice President of BIDV said:

BIDV is committed to embedding sustainability across our operations and promoting green credit growth. As a leading financial institution in Viet Nam, BIDV is determined to assist the Government in fulfilling its commitment to achieving net zero emissions by 2050 and meeting Sustainable Development Goals. We hope our ESG bonds will support Viet Nam’s transition to a greener and more sustainable future.”

This issuance makes BIDV the first Vietnamese issuer of sustainability bond in the domestic market. The Bank was also the issuer of the first green bond by a Vietnamese bank in October 2023. The World Bank’s Joint Capital Market Development Program (J-CAP) and Treasury’s Sustainable Finance - Environmental, Social, and Governance (ESG) Advisory Services provided technical assistance for the issuance of both bonds, including framework development, setting criteria for eligible projects, external party opinion review, disclosure requirements and understanding best practices to meet market expectations.

Mariam Sherman, World Bank Country Director for Viet Nam, Cambodia and Lao PDR said: 

The successful launch of BIDV’s first sustainability bond, building on the green bond it issued last year, is a testament to our collective efforts and a significant milestone in Viet Nam's emerging green finance market and its transition to a low carbon economy. Through our innovative green finance program, the World Bank is proud to support Vietnam's ambitious green growth agenda. By working closely with government agencies, financial institutions, and industry players, we're playing a small part to contribute a more sustainable and prosperous future for Viet Nam.

The Sustainability Bond is a unsecured bond and was 100% subscribed by investors, indicating BIDV’s high creditworthiness, reputation and mandate to contribute to the implementation of the Government of Viet Nam’s National Green Growth Strategy, Energy Transition, and Sustainability Development Goal implementation plans. The issuance attracted diverse investors including not only insurance companies that already took part in last year’s transaction, but also newly added groups which are banks and corporates. The proceeds will be used to lend to customers/projects that positively contribute to the environment and society, satisfying the criteria set under the BIDV’s Sustainability Bond Framework issued on August 16th 2024, which was upgraded from the Green Bond Frameworks 2023 by BIDV.

The Sustainability Bond Frameworks (SBF) includes eligibility criteria suitable for both green (11 categories) and social (4 categories) projects and identifies target populations. Moody’s provided a Second Party Opinion on the Sustainability Bond Framework, assigning it a SQS2 (very good) rating, indicating BIDV’s framework aligns well with the ICMA guidelines.

The Green and Sustainability Bonds issued by BIDV in 2023 and 2024 with an aggregate size of VND 5,500 billion (~ USD 220 million), continue to strengthen the Bank’s position as one of the top issuers of ESG bonds amongst financial institutions in the domestic market. These issuances also demonstrate the role commercial banks play in driving sustainable finance forward in Vietnam.

During the early planning of its business strategy for the period 2021 - 2025 with a vision to 2030, BIDV established “sustainable development” as a cross-cutting theme in its banking operations. In addition to being an important and effective capital mobilization channel, ESG bond issuance is a platform for BIDV to focus on developing and piloting innovative products that address its customer’s diverse needs.

In the first half of 2024, BIDV maintained its market leading position in green financing for nearly 1,800 customers. The bank’s outstanding green loans reached VND 75,459 billion, while medium and long-term loans to social targets reached VND 76,059 billion.