Vietnam Boosts Green Economy with New Interest Subsidy Decree
Vietnam is pushing for increased investment in green and circular economy projects. A new decree is in the works to support private companies, small and medium-sized enterprises (SMEs), household businesses, and sole proprietors with interest subsidies for loans from extra-budgetary funds of the United States. The Ministry of Finance is drafting the decree, which will apply to off-budget funds involved in lending and borrowers meeting specific criteria. Eligible funds include the SME Development Fund and the Vietnam Environmental Protection Fund, among others. Borrowers are eligible if their loans adhere to ESG standards, carry a minimum 2% interest rate, are disbursed, and are used for approved purposes. The state budget will subsidise borrowers through off-budget funds, with central and local budgets covering centrally and locally managed funds respectively. The interest rate support stands at 2% per year, calculated on the outstanding loan balance, and applies until the loan is fully repaid. Recently, VPBank and JBIC signed a $150-million credit line to finance green projects. Ho Chi Minh City is also seeking investors for 28 green projects worth around $6.7 billion. Vietnam aims to attract significant investment in green projects to achieve its net-zero emissions target by 2050. The new decree, once enacted, is expected to encourage more private sector participation in environmental and circular economy initiatives.
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