EVN Finance, a unit of state utility Vietnam Electricity Group (EVN), has signed deals for a US$75 million bond issuance, the country’s inaugural onshore, local-currency and internationally verified green bonds.
GuarantCo, a member of global infrastructure developer and investor Private Infrastructure Development Group (PIDG), has provided a 1,150 billion dong (US$50 million) partial credit guarantee to support the milestone deal.
“This first local-currency certified green bond in Vietnam will further climate mitigation and adaptation efforts in line with PIDG’s and GuarantCo’s aims,” says GuarantCo chief executive officer Layth Al-Falaki.
“We hope that this transaction will set a precedent for future initiatives which could be replicated in Vietnam and accelerate the growth of green bonds in order for GuarantCo to make a significant impact towards positive climate action and support the United Nations Sustainable Development Goals through the long-term, local-currency credit solutions that we provide.”
The offering has attracted institutional investors in Vietnam, including Manulife and AIA. Vietcombank Securities of Vietcombank, one of the country’s Big Four banks, acted as the mandated lead arranger.
The bond proceeds will allow EVN Finance to issue longer-term loans to finance capital expenditure of green infrastructure aligned with the company’s green bond framework, including loans towards the fast-growing rooftop and ground-mounted solar sub-sectors.
GuarantCo has worked alongside the Global Green Growth Institute (GGGI), an inter-governmental international development agency, to provide EVN Finance with technical assistance in structuring the green bond, and assisted in the third-party verification of the Vietnamese firm’s green bond framework.
GuarantCo and Vietcombank Securities have played an important role in attracting investors and coordinating the transaction, contributing to the success of EVN Finance’s green bond issuance. The transaction is expected to pave the way for other similar corporate bond offerings in Vietnam.
Nguyen Hoang Hai, CEO of EVN Finance, comments: “Green bonds are an effective capital mobilization channel for investors who are interested in sustainable development and aim to attract capital for green and sustainable growth in the future. Being guaranteed by GuarantCo and supported by Vietcombank Securities and GGGI, our issuance is expected to contribute to Vietnam’s commitment to its transition to a low-carbon economy and the company’s strategy on green financing.”
PIDG, GuarantCo’s parent company, is a global infrastructure developer and investor which mobilizes private investment in sustainable and inclusive infrastructure in Asia and Africa.