HÀ NỘI — A financial expert has proposed that a State fund should be launched to support businesses in the transition towards a ‘green’ economy.

The idea was introduced by Dr Cấn Văn Lực, chief economist at the Bank for Investment and Development of Vietnam (BIDV) at the seminar 'Green Transition Journey: Financial and Technological Solutions for a Sustainable Future', held in Hà Nội earlier this week and hosted by BIDV and the FPT Group.

Discussing the role of the State in the transition, Lực said that in addition to delays in the issuance of legal frameworks, insufficient and uncoordinated incentive policies – including financial and credit support, tax breaks and ecosystem support for environmental-friendly business activities – are also hindering the movement. 

Regarding ‘green credit’ – which is loans provided by banks for projects that are considered environmentally friendly or protective of the ecosystem – Lực said that since ‘green’ projects are long-term investments with high costs and risks, interest rates cannot be too low.

Therefore, State support is essential in incentivising businesses to apply for this type of loan, he said.

“We have repeatedly proposed the establishment of a Việt Nam Green Transition Fund,” Lực said. “Countries like South Korea and Japan have similar funds that effectively support businesses. So why doesn’t Việt Nam have one?”

He proposed that the fund should be initially funded by the Government, focusing on Việt Nam’s key sectors to drive growth. It could later receive funding from international financial organisations.

According to the ESG coordination lead at Gemadept Group, Nguyễn Thị Thu Thảo, accessing green credit remains a challenge for most businesses, especially small- and medium-sized enterprises (SMEs).

Many are hesitant about entering the green transition due to high costs, while preferential loan packages are still limited, she said.

In addition, to qualify for green loans, they must clearly define specific Key Performance Indicators (KPIs) within their transition roadmap, Thảo added.

“Both sides, businesses and banks, need to sit down together to build feasible KPIs based on their actual conditions. Once businesses show that they can meet these criteria, accessing green capital will become easier,” she said.

Drawing from Gemadept’s experience, she advised businesses to focus on long-term benefits of the transition.

Beyond financial value, it will help strengthen brand and reputation, which are values that can’t be measured in monetary terms, she said. — BIZHUB