The International Finance Corporation (IFC), a member of the World Bank Group, announced on Tuesday that it is investing up to VND3.5 trillion (US$150 million) in Vietnam's first-ever local currency sustainability-linked bonds (SLBs) issued by BIM Land Joint Stock Company and its subsidiary, Thanh Xuan Joint Stock Company.

The first local currency SLBs in Vietnam aim to help issuers expand their businesses while creating jobs, boosting competitiveness, and supporting the country's low-carbon growth model. 

IFC's investment comprises two subscriptions—over VND2.3 trillion (about $100 million) to be issued by BIM Land, a tourism and property developer in Vietnam, and nearly VND1.2 trillion (about $50 million) to be issued by Thanh Xuan Joint Stock Company.

Both the issuers are subsidiaries of BIM Group, a multi-sector corporation in Vietnam. 

The proceeds will be used to develop the Thanh Xuan valley project in northern Vinh Phuc Province, including an eco-friendly and unique residential community alongside a hotel complex under the InterContinental brand and other relevant services and infrastructure. 

IFC's funding will also help the developers implement water and energy saving solutions in two BIM Land hotels—InterContinental and Regent—on Phu Quoc Island off southern Kien Giang Province. 

The SLBs will provide financial incentives for both BIM Land and Thanh Xuan Joint Stock Company to improve water conservation and energy efficiency in three of their hospitality assets to be accredited by EDGE, IFC's green building certification system. 

This is expected to avoid an estimated 4,000 metric tons of CO2 annually, equivalent to greenhouse-gas emissions from 890 gasoline-powered passenger vehicles driven for a year.

IFC is also supporting BIM Land to develop a sustainability-linked financing framework with tailor-made sustainability performance targets.

Thomas Jacobs, IFC country manager for Vietnam, Cambodia, and Laos, said, “Private capital is a key to Vietnam's green transition. The issuance of the first local currency SLBs in the country will signal the viability of innovative green financing instruments as an alternative source of capital for climate-smart projects.

"IFC's funding will also encourage developers to align their interests with responsible investment and to mobilize funding from green capital markets, paving the way for a sustainable tourism sector."

In line with the government's twin goals to become a high-income country by 2045 and achieve net zero by 2050, climate and sustainability have become bigger focus areas for IFC engagements in Vietnam. 

To date, IFC has committed over $900 million in long-term finance to support climate-related projects in the country. 

IFC's commitments in Vietnam reached nearly $1.9 billion in fiscal year 2023, ending June 30, helping local companies recover from the COVID-19 pandemic and navigate challenging internal and external environments.

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