IFC prioritises job creation and trade flow in Vietnam
VOV.VN - Despite enduring overlapping crises and challenges, several climate projects, smaller businesses, women, and farmers throughout Asia and the Pacific region have benefited from record amounts of funding given by the International Finance Corporation, with Vietnam among the IFC's top five countries for long-term investment in the region for the fiscal year ending June 30.
The IFC's total commitments in the country have reached close to US$1.9 billion in the current fiscal year, of which US$520 million is in long-term finance.
IFC investment and advisory schemes seek to address core challenges for Vietnam, such as climate change and food security, deal with trade barriers and housing finance, help local companies recover from the COVID-19 pandemic, and navigate challenging internal and external environments.
The majority of long-term funding has increased lending to thousands of small and medium enterprises (SMEs), including women-owned businesses, supported lower and middle-income home buyers, created jobs and boosted economic activity.
IFC's investments in BaF, a leading livestock producer, as well as in the retail operator GS25, along with a commodity-backed warehouse finance facility for TTC AgriS, have helped strengthen agribusiness value chains and improve food security in the country.
IFC also provided over US$1.3 billion in short-term trade and supply chain finance to help local companies in Vietnam, mainly garment and agribusiness suppliers, enabling them to continue importing and exporting goods while retaining about 100,000 jobs.
In line with the Government's twin goals to become a high-income country by 2045 and achieve net zero by 2050, climate and sustainability have become a major focus for IFC engagements in the country. To date, the IFC has committed over US$900 million in long-term finance aimed at supporting climate-related projects in the country.
"As businesses gradually recover from the pandemic and weather uncertainties of ongoing global crises, it's the right time for the private sector to embark on a greener and more sustainable pathway of development to improve resilience and efficiency,” said Thomas Jacobs, country manager for Vietnam, Cambodia and Laos of the IFC.
“This not only makes a strong business case for companies but will also help unlock the potential of the private sector as a driving engine of the country's transition to a low-carbon economic growth model," the IFC representative added.
IFC's advisory scheme in Vietnam focuses on facilitating climate business markets whilst building the capacity for local businesses in order to grasp opportunities in the climate space. For example, IFC is supporting relevant ministries to enable them to develop policies to incentivise green projects and encourage private sector participation in the voluntary carbon market, among others. IFC is also advising manufacturers in heavy industries, including steel, cement, and plastics to adopt decarbonisation solutions to greener their production.
It also supports the State Securities Commission of Vietnam to promote the adoption of environmental, social and governance (ESG) standards and practices as part of efforts to enforce ESG requirements among market players. This effort will help to leverage the capital market to tackle climate change through green and sustainable finance.
Across the Asia and Pacific region, IFC has committed a record US$11 billion to 108 projects in FY2023, a 10% annual increase. This comprises US$4.7 billion in long-term financing from its own account, US$3.4 billion in mobilisation, and US$2.9 billion in short-term trade and supply chain finance to facilitate trade flows.
