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VIETNAM, 25 October 2022: VinFast Trading and Production Joint Stock Company (VinFast) has received a USD 135m financing package from the Asian Development Bank (ADB) for the production of Viet Nam’s first fully electric public transport bus fleet and first national electric vehicle charging network.
The funding will help Viet Nam’s initiatives to reach net-zero greenhouse gas emissions and develop its high-tech manufacturing sector.
Climate financing
The 7-year tenor climate finance consists of a USD 20m loan supported by ADB, USD 87m in parallel loans handled by ADB as mandated lead arranger, and USD 28m in concessional financing.
The Climate Bonds Initiative, a scientifically based standard for certifying bonds, loans, and other debt instruments which contribute to tackling climate change, has approved the climate funding.
The Australian Climate Finance Partnership (ACFP), which is funded by the Australian Government, provided a loan of up to USD 20m for the project. The Clean Technology Fund (CTF) provided a loan of up to USD 5m, and the Climate Innovation and Development Fund, which is supported by Goldman Sachs and Bloomberg Philanthropies, provided a grant of up to USD 3m.
ADB also arranged parallel loans from ResponsAbility, Export Finance Australia, the Finnish Fund for Industrial Cooperation, and Oesterreichische Entwicklungsbank AG.
Greenhouse gas emissions
The transport sector in Viet Nam is responsible for 18 percent of the nation’s yearly greenhouse gas emissions, hence the country’s goal of achieving net zero emissions by 2050 will be directly impacted by the sector’s decarbonization through initiatives like e-mobility.
The project also includes USD 950,000 in technical assistance (TA) from the ACFP and the CTF, which is intended to increase consumer understanding of the economic, environmental, and social effects of e-mobility and aid in its market uptake. The TA will also support the advancement of women who are working in or pursuing careers in science, technology, and math-related disciplines.
Comments
Suzanne Gaboury, ADB Private Sector Operations Department Director General said, “This project delivers a high-impact, sustainable transport solution for Viet Nam while helping it meet its climate goals and supporting the growth of climate finance in the region.”
“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,” Gaboury.
“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 Viet Nam’s transition to a low carbon economy,” said VinFast’s Global CEO Thuy Le.
Business profile
VinFast founded in 2017 builds electric vehicles for both domestic and foreign markets, and it is investing in a nationwide network of fast-charging stations to support the growth of its electric vehicle fleet in Vietnam.
