At the Credit Policy and Carbon Market workshop on 14/10, Nguyen Ngoc Canh, Deputy Governor of the State Bank of Vietnam, announced that outstanding green credit balances in the first half of this year increased by nearly 10% compared to the end of 2025. Of this, 31% of the capital was channeled into agriculture, forestry, and biodiversity conservation, with another 28% allocated to the energy sector.

Green capital accounts for 4.2% of the economy's total outstanding credit, amounting to 856 trillion VND over the six-month period.

Despite this growth, disbursing green capital faces challenges. Nguyen Viet Long, Deputy General Director of EY Vietnam, noted that many businesses deemed "obligated to go green" often fail to define these criteria during the initial project preparation phase. This oversight leads to increased total investment costs compared to initial estimates, requiring businesses to redesign projects from scratch and impacting their ability to secure funding.

Long emphasized that during appraisal, banks evaluate a business's overall financial health, not just individual green projects. Therefore, businesses must structure their green financing in phases.

For instance, in the initial phase, businesses can secure bank loans, which offer the quickest way to raise capital and meet project construction and implementation timelines. In subsequent stages, businesses can restructure their financing using green bonds or transition bonds to obtain stable medium and long-term capital.

Speakers at the Credit Policy and Carbon Market workshop on 14/10. Photo: Tai Chinh - Dau Tu Newspaper

Vietnam's commitment to achieving Net Zero emissions by 2050 necessitates substantial capital for transforming production methods, enhancing energy efficiency, and reducing greenhouse gas emissions. Bui Minh Giap, Chief Economist for the Asian Development Bank (ADB) in Vietnam, estimates these capital requirements will reach 368 billion USD by 2040.

Given the significant capital demand, Deputy Governor Nguyen Ngoc Canh suggested that developing a carbon market could alleviate pressure on green credit funding. "When the carbon market operates effectively," Canh stated, "emission reduction outcomes can be transformed into resources for businesses themselves."

Since June, the carbon market has been operating on a pilot basis, with quotas allocated to three sectors: iron and steel, thermal power, and cement. To date, there have been 7 quota transactions, totaling 1,310 tons of CO2e. Currently, only emission reduction quotas are traded on the exchange, not carbon credits.

To unlock green capital flows, Bui Minh Giap emphasized that Vietnam needs to complete its institutional framework alongside developing the carbon market and green finance. A foundational requirement for this is a standardized set of criteria for green and transition activities, coupled with a highly reliable emission database. Giap pointed out that while banks are a crucial channel for capital, they cannot meet the long-term financing needs of the green sector.

The ADB expert advised: "Capital mobilization tools must combine credit with green bonds, transition finance bonds, equity, blended finance, and risk-sharing mechanisms. Each type of risk should be allocated to the parties best equipped to manage it."

Thuy Truong