A significant amount of green capital has found its way to Vietnam as the country targets energy transition and green growth.

Green
finance has become a key driver guiding sustainable development processes in many
countries in the context of climate change increasingly impacting upon socio-economic
development. Vietnam, posting among the highest economic growth rates in Southeast
Asia and with a commitment to achieve net-zero emissions by 2050, is emerging as
a promising destination for global green capital flows.

At
a session with the theme “Sustaining Growth: Green Bonds, Corporate Finance
Bankable Infrastructure” held within the Green Economy Forum (GEF) 2025, experts
shared insights into market operations, analyzing new foundations, barriers, and
breakthrough opportunities for Vietnam in attracting capital to support its energy
transition and green growth.

Solid
foundation

Experts
agreed that national policies play the most crucial role in attracting green capital.
Vietnam has entered a new phase in which the legal framework related to energy transition
and green growth is being developed faster, more coherently, and with clearer standards.

Ms.
Loan Pham, Chief Executive Officer of BNP Paribas Vietnam, commented that Vietnam
is making significant progress in its sustainable development strategies. “The goals
that Vietnam has set, from double-digit GDP growth in the coming years to becoming
a high-income country by 2045 and achieving net-zero emissions by 2050, are bold,
clear, and measurable,” she emphasized.

One
of the most important policies is the Power Development Plan VIII (PDP8), she
continued, which not only promotes renewable energy but also aims to modernize the
national power grid and develop energy storage systems. This creates a long-term
infrastructure framework aligned with the expectations of international financial
institutions that demand transparency and long-term commitment.

The
introduction of the Vietnam National Green Taxonomy in 2025 was also a major milestone.
Mr. Pham Hoang Hiep, Vice President and Head of the Europe, America Oceania
Desk in the FDI Banking Department at BIDV, said this system is aligned with the
EU Taxonomy and fully compatible with the ASEAN Taxonomy. On the regulatory side,
the State Securities Commission (SSC) has been involved in promoting responsible
investment very early on, even before the concept of ESG (environmental,
social, and governance) was widely popularized, and is also a member of the ASEAN
Taxonomy Board.

“These
efforts help ensure that Vietnam’s capital market policies always adhere to regional
and international standards,” he added. “This alignment helps investors participating
in the Vietnamese market easily access a familiar system of standards, similar to
those in regional and international markets. In particular, the synchronization
from the issuer level to the policy framework creates favorable conditions for green
capital to flow into the market.”

Ms.
Sunita Lukkhoo, Head of Regional Representation for Southeast Asia and the Pacific
at the European Investment Bank (EIB), regards Vietnam as a strategic market in
the region because it has high growth rates, demonstrates a strong commitment to
sustainable development, and is also highly vulnerable to climate impacts. “These
factors are decisive for international financial institutions when considering large-scale
capital deployment,” she added. “Together, these factors create a solid foundation
for Vietnam to become a destination for global climate capital in the decade to
come.”

From
awareness to bankability

Vietnam’s
green finance market is currently developing in a positive manner but has yet to
fully meet the expectations of regulators and international investors. Main products
include green bonds, sustainability bonds, green loans, and ESG-linked credit.

According
to figures shared by Mr. Hiep, the total value of green bonds issued in Vietnam
stands at approximately $1.1 billion, but this figure is still considered low compared
to the market’s potential. The reason, he noted, lies in the mindset of investors.
“Many private investors still tend to prioritize high returns in the short term,
accepting greater investment risks instead of being willing to trade off a portion
of profits to move toward sustainable goals,” he said. “It is this mentality that
results in the level of interest in green financial products not being commensurate
with market expectations.”

However,
experts also recognize that rapid changes are underway. Mr. Hiep pointed out that
the level of understanding and interest among non-financial organizations in green
bonds, sustainability bonds, ESG bonds, or bonds linked to sustainability goals
is improving significantly. Though the names differ, they all aim at the same objective:
promoting sustainable finance for businesses.

Another
notable point is the increasing participation of financial institutions in services
related to green bonds, including independent verification services, consulting,
and other support activities. Banks not only play the role of issuers but also act
as service providers and are deeply involved in the operational process. In the
capital market, the banking system has its own set of guidelines; at the same time,
Vietnam’s stock market has issued a set of guidelines for green bond issuance, contributing
to a transparent and unified operating framework.

Meanwhile,
Ms. Loan believes that the market can only break through if the legal environment
remains stable and more transparent. “Investors dislike uncertainty,” she continued.
“They need a clear, consistent policy framework with a long-term vision.”

She
highlighted three factors considered top priorities to promote this process. First,
the legal and regulatory framework, though changing rapidly, still needs further
improvement to meet international standards, as investors expect. Second, Vietnam
must enhance transparency, improve predictability, and, most importantly, ensure
stability in the legal environment, as uncertainty always reduces investor confidence.
And third, it is crucial to expand and diversify forms of financing for the energy
transition.

Ms.
Lukkhoo said many green projects in Vietnam are large-scale and high-risk, requiring
blended-finance solutions to mobilize private capital. She emphasized the crucial
role of multilateral institutions in mitigating risks and enhancing project bankability.
This indicates that Vietnam’s green finance market is entering a stage of broadening
awareness, strengthening trust, and accelerating project supply, which are essential
factors for forming a sufficiently deep market.

Catalyzing
global capital

A
key takeaway from the discussions is that Vietnam is increasingly becoming an attractive
destination for international green capital. In a context where capital demand for
energy transition far exceeds the domestic financial system’s capacity, the role
of international banks, investment funds, and multilateral institutions becomes
particularly important.

Ms.
Lukkhoo said the EIB operates on a non-commercial basis and acts as a catalyst,
with investments built on principles aligned with the Paris Agreement and the United
Nations Sustainable Development Goals (UN SDGs). The EIB is also implementing programs
under the EU’s Global Gateway strategy, which aims to channel European capital into
key infrastructure projects in developing economies. Vietnam is among the strategy’s
priority markets.

International
commercial banks such as BNP Paribas also play an important role in advising, providing
green financial products, and connecting international investors with Vietnamese
projects. Along with the prerequisite of a suitable legal framework and the financial
feasibility of projects, Ms. Loan believes Vietnam needs to make greater use of
financing instruments beyond traditional corporate capital.

She
affirmed that financial institutions are not just observers. On the contrary, they
play a central role in pushing Vietnam into a new stage of development. The success
of the energy transition depends on the ability to mobilize the private sector and
attract international investors. This requires close cooperation between international
banks, such as BNP Paribas, which has strong access to European and global investors,
and domestic banks, institutional investors, and FDI enterprises active in Vietnam.

“Vietnam
is at a crucial juncture, with economic growth among the highest in Southeast Asia,
energy demand continuing to rise sharply, and green transition targets becoming
increasingly challenging,” she said. “It is estimated that more than $130 billion
will be needed to meet energy transition needs in the years to come.”

Meanwhile,
domestic banks like BIDV are localizing green capital by expanding green credit
portfolios, issuing green bonds, and enhancing project evaluation capacity according
to ESG standards. This creates a foundation for international capital entering Vietnam
to be rapidly disseminated through the domestic financial system.

VET-Ngoc Lan