In a significant move to bolster green initiatives, the Government of Vietnam is set to offer a 2 percent interest rate support for green projects spearheaded by private businesses, individuals, and business households. This initiative, outlined in a draft decree recently finalized by the State Bank of Vietnam and the Ministry of Finance, aims to encourage investments in sustainable development practices.
According to the draft decree, the Government aims to support private entities that are implementing projects based on green development, adopting circular economy practices, or aligning with Environmental, Social, and Governance (ESG) standards. This financial backing is designed to act as a catalyst for greener business models and sustainable practices across sectors.
During the Government’s regular press conference on October 5, Deputy Governor of the State Bank, Doan Thai Son, highlighted the importance of this policy. He mentioned that the State Bank is in the process of submitting the decree to the Government for immediate promulgation. The focus is on enabling the private sector to play a more active role in sustainable development ventures.
In tandem, the Ministry of Finance is gathering insights on a supplemental draft decree that proposes equivalent interest rate support through state financial resources outside the budget. Eligible borrowers could benefit from a 2 percent reduction in loan interest rates when accessing funds from sources like the Small and Medium Enterprise Development Fund, the Vietnam Environmental Protection Fund, and the Farmers Support Fund. This structured funding strategy aims to ensure the long-term feasibility and stability of the incentive program.
For projects to qualify for these interest rate incentives, they must adhere strictly to defined criteria concerning green development, circular economy initiatives, and ESG standards. To facilitate transparency, the list of eligible projects is expected to be publicly accessible via the Ministry of Agriculture and Environment’s Electronic Information Portal.
The rationale behind this interest rate support policy closely aligns with Resolution No. 68-NQ/TW issued by the Politburo, which explicitly encourages deeper private sector engagement in the green transition and sustainable development. This governmental push is timely and essential, aimed at fostering collaboration between public and private entities in addressing environmental concerns.
This initiative is also a follow-up to the Prime Minister’s introduction of a green taxonomy in July 2024, delineating 45 types of eligible projects spanning various sectors including energy, transportation, construction, agriculture, and industry. The Ministry of Agriculture and Environment is presently working on detailed guidelines to outline the circular criteria and ESG framework, ensuring that entities can take full advantage of the support mechanism soon.
By Luu Thuy – Translated by Anh Quan