AFD to fund BIDV for financing energy project

tHu lIen

AFD to fund BIDV for financing energy projects

Recently BIDV and the Agence Française de Développement (AFD) has signed a Letter of Interest on SUNREF green credit line to finance enterprises for green growth.

Accordingly, AFD is committed to fund BIDV a long-term loan worth USD100 million as well as providing technical assistance up to EUR300,000 to BIDV and its customers. Mr. Le Ngoc Lam - Senior Executive Vice President in charge of the Board of Management of BIDV, and Mr. Fabrice Richy – Director of AFD Vietnam, represented the two sides to sign the Letter of Interest.

BIDV is one of the leading financial institutions in Vietnam with long experience in managing foreign entrusted funds and providing modern banking products and services for customers, contributing to effective realisation of the target set by donors and the government of Vietnam.

In recent years, BIDV has been trusted and selected by the Government, ministries and donors as the bank to relend key and large foreign entrusted funds. In particular, for AFD funds, BIDV has been trusted to implement a number of projects such as the Northern Power Transmission Project worth EUR40 million; housing development program in flood-hit areas in the Mekong Delta worth EUR25 million, among others.

Mr. Le Ngoc Lam said: “The signing of the Letter of Interest on AFD SUNREF green

Leaders of BIDV and AFD pose for a photo after the signing ceremony

credit line marks a significant milestone in the cooperation between BIDV and AFD. It reaffirms the partnership of BIDV with major donors in promoting Vietnam's economic development, contributing to the successful implementation of the resolutions of the Party and the Government”.

Mr. Fabrice Richy, Director of AFD Vietnam, expressed his confidence: “We are very proud of the cooperation with BIDV to set up this USD100 million green credit line. This credit line will finance projects mainly in the renewable energy and energy efficiency areas, thus helping improve the country’s energy structure in response to climate change and the implementation of the Paris Agreement on climate change - the core topic of AFD's operational strategy in Vietnam”.

Over the past time, recognizing the importance of supporting enterprises to invest in the energy sector, especially renewable energy, environmental protection, climate change response and green growth, BIDV has focused on lending this group of customers. The loan scale for the energy area at BIDV has grown constantly during 2017-2019 at the rate of 9.66 percent p.a. Outstanding balance of this sector reached over VND46,000 billion (USD2 billion), accounting for 4.2 percent of the lender’s total outstanding balance.`

As well as providing BIDV with a long term fund to finance green and sustainable development, AFD will cooperate with BIDV to optimize the positive social and environmental impacts of the credit line, assisting the construction of a social and environmental management system and sharing practical experience in implementing SUNREF in other countries.