Vietnamese EV maker VinFast receives US$135 million in green funding

Monday, Oct 24, 2022 14:41

The assistance will support Viet Nam’s efforts to achieve net-zero greenhouse gas emissions and expand high-tech manufacturing industries. — Photo courtesy of VinFast

The Asian Development Bank (ADB) mobilised a US$135 million financing package for VinFast Trading and Production Joint Stock Company (VinFast) to manufacture Viet Nam’s first fully-electric public transport bus fleet and first national electric vehicle (EV) charging network.

The assistance will support Viet Nam’s efforts to achieve net-zero greenhouse gas emissions and expand high-tech manufacturing industries.

The 7-year tenor financing comprises a $20 million loan funded by ADB, parallel loans of $87 million facilitated by 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 from its managed trust funds comprising a loan of up to $20 million from the Australian Climate Finance Partnership funded by the Australian Government (ACFP); a loan of up to $5 million from the Clean Technology Fund (CTF), and a grant of up to $3 million from the Climate Innovation and Development Fund, which is funded by Goldman Sachs and Bloomberg Philanthropies.

Parallel loans were also mobilised by ADB from Export Finance Australia, the Finnish Fund for Industrial Cooperation, Oesterreichische Entwicklungsbank AG, and responsAbility.

“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,” said ADB Private Sector Operations Department Director General Suzanne Gaboury. “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 decarbonise their economies.”

Viet Nam’s transport sector accounts for 18 per cent of annual greenhouse gas emissions, and its decarbonisation, 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 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.

Established in 2017, VinFast is Viet Nam’s first domestic car company and e-vehicle manufacturer. VinFast is a subsidiary of Vingroup Joint Stock Company, Viet Nam’s largest private enterprise and the largest listed company in Viet Nam. VinFast develops e-cars for the domestic and international market, and is investing in a nationwide network of fast-charging units to support its e-vehicle expansion in Viet Nam. — VNS

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