Vietnam’s pioneering bank to catch the blue economic wave

Sustainable vision associated with blue economy 
Green growth and the development of green/blue economies are the mega-trend worldwide, aiming at a sustainable growth with minimum or zero environmental impacts. Taking advantages of human and natural resources, together with high growth rates, Vietnam has great potentials to develop sustainable economy. Especially, the marine economy and blue finance - an emerging climate finance sector associated with ocean and water - promises to become the next big wave in Vietnam.

According to Mr. Thomas Jacob – Country Manager for Vietnam, Cambodia and Lao PDR of the International Finance Corporation (IFC), Vietnam has rich marine resources as well as great potentials for onshore and offshore wind power. In the context of increasing demand for blue finance resulted from the growing interest of global investors, Mr. Thomas Jacob said: “This type of innovative financing offers an opportunity for Vietnam's financial sector. Transitioning to a climate-resilient and low-carbon economy will require massive investments, with at least half from the private sector. Key to achieving Vietnam's Sustainable Development Goals by 2030, this is also an opportunity for the domestic banking sector to establish their position as market leaders”.

Accordingly, Vietnam has been on its roadmap to achieve national green growth strategies for each phase with a vision to 2050, aiming at ‘net zero’ by 2050. To fulfill the capital needs towards this goal, a long-term funding of approximately US$368 billion is necessary. Meanwhile, banking sector also plays an important financial intermediary role, supplying capital to the green/blue economic growth.

Pioneering in blue finance development 

As a member of the banking system, Southeast Asia Commercial Joint Stock Bank (SeABank) focuses on international cooperation, attracting a foreign capital flow totaling nearly US$850 million from the world's leading financial institutions such as IFC, DFC, AIIB, Norfund, etc. Thanks to the Bank's sustainable strategic vision, together with financial and technical support from experienced foreign partners, SeABank has been developing a sustainable financial system. This system helps mobilize private funding for environmental projects that normally require large and long-term capital.

“SeABank works to become the pioneer bank in linking the public and private sectors to create transparent and attractive opportunities for the market, promoting investments in Vietnam's blue economy. This will help Vietnamese businesses and SMEs with adequate capital for growth and expansion, especially those engaged to green projects” – SeABank’s Vice Chairwoman of the BOD Le Thu Thuy shares on the Bank's sustainable strategic vision.

 

 

Accordingly, SeABank pioneers in applying innovative financial instruments through the issuance of Vietnam's first blue bond and the first green bond by a domestic private commercial bank. The green and blue bonds are issued to international financial institutions, particularly IFC and AIIB, with a total value of US$150 million. Additionally, IFC also advises SeABank on adopting green and blue bond frameworks, helps SeABank identify eligible green-blue assets and build a portfolio of potential projects. The green and blue bonds of SeABank are issued with longer and favorable terms for long-term benefits of Vietnam's sustainable economy, and are in line with the Bank’s goal of increasing capital sources steadily in the medium and long term.

SeABank, together with IFC and AIIB, also provides necessary materials and guidelines on meeting project criteria, identifying eligible green/blue project portfolios, translating general principles on financing the blue economy into guidelines for issuing blue bonds and blue loans... These are useful reference documents for stakeholders and interested parties, thereby creating the premise and paving the way for green economic development in Vietnam.

In addition to broadening international cooperation and developing green finance, SeABank constantly enhances its solid foundation, aiming at “Green Banking” direction through: integration of the environmental and social risk management system (ESMS) into credit procedures; prioritizing capital for green credit projects focusing on the energy sector; providing cheap capital for individual and green homebuying; implementing activities such as planting trees, collecting waste, etc. to combat climate change and protect the environment.

With a sustainable strategic vision, SeABank will continue to promote green growth, focus on disbursing green capital, establishing cooperative partnerships and expanding its green/blue porfolios, connecting green projects, etc. In this way, the Bank steadfastly pioneers, paves the way towards strong development and spread of the blue economy, gradually getting SeABank appear as a ‘sustainable finance’ brand in Vietnam.