On May 13, 2022, at the headquarters of the State Bank of Vietnam (SBV), SBV Deputy Governor Pham Thanh Ha had a meeting with Mr. Philippe Orliange, Global Executive Director of the French Development Agency (AFD), and other AFD senior experts in Vietnam.
At the meeting, the two sides discussed about (i) the cooperative relations between the SBV and the AFD over the past years; (ii) the SBV’s orientations in the fields of green growth, supporting the Government’s fulfillment of Vietnam's commitments at COP26, and the need for policy support, direct loans without government guarantees, grant aids, support to capacity building; (iii) proposing for the AFD's support on: green finance development, energy transition, finance greening; and (iv) the SBV’s participation in the international network of central banks and development banks for green and climate financing with the support of the AFD.
At the meeting, SBV Deputy Governor Pham Thanh Ha expressed his pleasure to welcome and work with Mr. Philippe Orliange and his Mission. Mr. Pham Thanh Ha highly appreciated the cooperation and support of the AFD in general and Mr. Philippe Orliange in particular in the field of finance and banking in Vietnam. The SBV Deputy Governor hoped that, in the coming time, Vietnam would continue to receive the AFD's support in the forms of financial resources, policy advice and capacity building activities. The SBV Deputy Governor also wished Mr. Orliange to have an effective business trip in Vietnam, and a successful office term.
Overview of the meeting.
Mr. Pham Thanh Ha also informed the AFD about the banking sector's efforts to support the Government's green growth strategy, which have focused on greening the balance sheets of the commercial banks; coming up with measures focusing on raising the awareness and actions of the management agencies through the policy advice on research and development of legal documents within the SBV in the field of green credit, green banks; sharing international experience, training and capacity development for the functional units of the SBV, etc.
Regarding the credit outstanding of the banking industry: as of December 31, 2021, the total outstanding of green credit was estimated at over VND 451,000 billion, accounting for about 5% of the total loan outstanding of the economy. In the coming time, the SBV will focus on researching and developing a strategy/ roadmap of the banking industry towards neutralizing emissions, including a number of specific measures such as: enhanced inspection and supervision; developing scenarios and models of resilience assessment; Monetary policy; Credit, etc.
On the AFD's side, Mr. Orliange shared that the AFD would be willing to establish partnerships with other joint stock commercial banks (currently the AFD has only focused on the state-owned commercial banks) that share the same sustainable development mindset. The AFD would conduct a market research in 2022 to assess the possibilities to provide multi-sector credit lines for a number of banks in Vietnam. In the banking sector, the AFD wishes to develop Green Finance in Vietnam and provide technical support to the SBV and the commercial banks, in order to fulfill Vietnam's commitments made at COP 26; provide preferential loans without government guarantees and grants from the AFD, the EU, the Global Green Climate Fund to the SBV and the commercial banks; support the research and development of new green financial instruments. In the coming time, the AFD wishes to encourage Vietnamese commercial banks to join a number of networks and organizations such as the International Development Finance Club (IDFC), the Green Banks Club in Vietnam, in order to share experience on Green Finance; introduce the AFD's lending tool without government guarantee with the commercial banks in Vietnam. In addition, the AFD Global Executive Director also suggested to support the SBV’s participation in the Network for Greening the Financial System (NGFS) so as to learn and share experience among countries on green finance and green credit.
Mr. Philippe Orliange, AFD Global Executive Director, speaks at the meeting.
At the end of the meeting, SBV Deputy Governor Pham Thanh Ha suggested that the AFD continue to accompany the Government of Vietnam in its sustainable development roadmap, especially in implementing the commitments made at COP26 through various tools, such as: ODA loans, direct loans without government guarantees, grants. For the banking industry, the SBV Deputy Governor recommended that the AFD mobilize long-term, low-cost capital resources to finance green projects of the banking industry through non-refundable grants; support the SBV and the commercial banks to join the organizations of “green” banks; provide lending tools without government guarantees for Vietnamese banks; jointly organize an international conference to share international experience and best practices on green finance and climate financing; encourage the enhancement of cooperation between the AFD and the state-owned commercial banks to support green finance development.
LK