HANOI: The Asian Development Bank (ADB) mobilized a US$135 million climate financing package for VinFast Trading and Production Joint Stock Company (VinFast) for manufacturing Vietnam’s first fully-electric public transport bus fleet and first national electric vehicle (EV) charging network.
The assistance will support Vietnam’s efforts to achieve net-zero greenhouse gas emissions and expand high-tech manufacturing industries.
The climate financing comprises 7-year tenor financings, including a $20 million loan funded by ADB, parallel loans of $87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to $28 million.
The climate financing is certified by the Climate Bonds Initiative, a scientifically-based standard for labelling bonds, loans and other debt instruments which contribute to addressing climate change.
ADB has partially offset the project’s risks by utilizing concessional financing through its managed trust funds comprising loans from the Australian Climate Finance Partnership funded by the Australian Government (ACFP), the Clean Technology Fund (CTF) and a grant from the Climate Innovation and Development Fund, which is funded by Goldman Sachs and Bloomberg Philanthropies.
Parallel loans were also mobilized by ADB from Export Finance Australia, the Finnish Fund for Industrial Cooperation, Oesterreichische Entwicklungsbank AG, and responsAbility.
Vietnam’s transport sector accounts for 18% of annual greenhouse gas emissions, and its decarbonization, through options like e-mobility, will directly impact the country’s ambition to achieve net zero emissions by 2050.
Additionally, the project includes a technical assistance (TA) of $950,000 from the ACFP and the CTF, focused on raising consumer awareness about e-mobility’s economic, environmental, and social impacts to help advance its market penetration.
The TA will also help promote the role of women studying for or working in fields related to science, technology and mathematics.