The Asian Development Bank is extending support to Vietnam and its electric mobility ambition through its climate financing comprising of 7-year tenor financings, including a $20 million loan funded, parallel loans of $87 million with ADB as mandated lead arranger, and concessional financing of up to $28 million.
The climate financing is certified by the Climate Bonds Initiative, a scientifically-based standard for labelling bonds, loans and other debt instruments which contribute to addressing climate change.
ADB has partially offset the project’s risks by utilising 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 responsAbility.
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.
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. The TA will also help promote the role of women studying for or working in fields related to science, technology, and mathematics.
“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 Vietnam’s first domestic car company and electric passenger vehicle manufacturer. VinFast is a subsidiary of Vingroup Joint Stock Company, Vietnam’s largest private enterprise. VinFast develops electric cars for the domestic and international market and is investing in a nationwide network of fast-charging units to support its electric vehicle expansion in Vietnam.
