ADB Leads US$135 million Financing Deal for Electric Mobility in Vietnam

  • Project delivers a high-impact, sustainable transport solution for Vietnam

  • Private sector projects crucial to help countries decarbonize their economies

The Asian Development Bank (ADB) has arranged a $135 million climate financing package for Vietnam’s VinFast Trading and Production Company (VinFast) for manufacturing Vietnam’s first fully-electric public transport bus fleet and first national electric vehicle (EV) charging network.

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

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.

The climate financing comprises 7-year tenor financings, including a US$20 million loan funded by ADB, parallel loans of US$87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to US$28 million.

Project’s risks offset

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.

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.

ADB has partially offset the project’s risks by utilizing 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 mobilised by ADB from Export Finance Australia, the Finnish Fund for Industrial Cooperation, Oesterreichische Entwicklungsbank AG, and responsAbility.

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