ADB leads $135 million climate financing package for VinFast to support e-mobility in Vietnam

The Asian Development Bank (ADB) mobilized a $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.

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.

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 responsibility.

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 standard for labelling bonds, loans and other debt instruments which contribute to addressing climate change.

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.

“This project delivers a high-impact, sustainable transport solution for Vietnam while helping it meet its climate goals and supporting the growth of climate finance in the region,” said ADB Private Sector Operations Department Director General Suzanne Gaboury. “Asia and the Pacific is the frontline of the global fight against climate change, and private sector projects like this one with innovative partners such as VinFast are crucial to help its countries decarbonize their economies.”

We are delighted to receive this extensive support and a long-term financing package from ADB and several esteemed international Development Finance Institutions. We see this as a vote of confidence in our efforts to become a global smart mobility company that offers environmentally friendly public transportation, and to advance Vietnam’s transition to a low carbon economy,” said VinFast’s Global CEO Thuy Le.

Established in 2017, VinFast is a subsidiary of Vingroup Joint Stock Company, Vietnam’s largest private enterprise. VinFast develops electric cars for the domestic and international markets and is investing in a nationwide network of fast-charging units to support its electric vehicle expansion.

Also Read: Report on Singapore’s EV Landscape

Subscribe & Stay Informed

Subscribe today for free and stay on top of latest developments in EV domain.

Leave a Reply

Your email address will not be published. Required fields are marked *