FiinGroup’s Chairman shared solutions in financing the green growth for HCMC at its Economic Forum 2023

Mr. Nguyen Quang Thuan (Chairman of FiinGroup, CEO of FiinRatings) joined  Ho Chi Minh City Economic Forum 2023 “HEF” as panelist. The event was organized by The People’s Committee of Ho Chi Minh City from 13th to 17th of September 2023, focusing on the theme "Green Growth - Towards Net Zero".

As a panelist in “Session 02: Solutions to Promote Green Growth and Circular Economy Models Among Businesses toward achieving Sustainable Development for a Megacity like HCMC”, Mr. Thuan shared from the perspectives of a local licensed Credit rating agency and a Green Bond Approved Verifier under the international standards by Climate Bonds Initiative (“CBI”) ​​in mobilizing financial resources to implement the ambitious green development plans.

Some recommendations shared by FiinGroup’s representative includes:

• Mobilizing finance from domestic capital market and from foreign investors for green growth is very important. To explain, the State budget resource is limited and can finance only a small portion of the green growth plan, especially focusing on infrastructure projects under planned for HCMC which include highways, power plants, water supply, waste and sewage treatments, and seaports.
• Green projects normally require very long-term investments which need very long-term debt financing, thus relying on public spending and banking credit will not be sufficient. For example, payback period for infrastructure projects of renewable energy would be 13-15 years, and waste treatment projects would be 15+ years. Therefore, developing mechanisms to attract long-term debt financing is crucial for the implementation of the planned investments.
• Green, Social, Sustainability-linked bonds and loans (“GSS Bond”) is an important financial instrument for Vietnam in general and for HCMC in particular. It is good that HCMC has been in process of drafting the framework for "Green growth strategy towards sustainable development of Ho Chi Minh City until 2030", and Mr. Thuan recommended that HCMC should consider issuing municipal sovereign GSS bonds to attract local and foreign capital for implementing the green growth plan. In addition, HCMC should have programs to facilitate GSS bonds for enterprises by coordinating with line ministries including the Ministry of Finance, Ministry of Natural Resources and Environment to mobilize funds for the green projects in HCMC.
• Mr. Thuan also shared experiences in working with Vietnamese enterprises in developing GSS bond framework and having external verification or Second Party Opinion assessments against the international standards by Climate Bonds Initiative and Green Bond Principles, Green Loan Principles by International Capital Market Association (”ICMA”) and other sets of standards commonly accepted by international investors.
• FiinGroup’s representative emphasized the importance of well preparation in the “greening” process, including the preparation of green finance framework in corporate financing strategy, investors and creditors’ risk appetite, benefits of going green in the capital markets and other practical matters for the consideration of business leaders.

About FiinRatings:

 FiinRatings Joint Stock Company (“FiinRatings”), a member of FiinGroup and a technical collaboration partner with S&P Global Ratings, is a local licensed Credit Rating Agency in Vietnam. FiinRatings provides credit ratings and related services to issuers, creditors and investors in Vietnam credit market. FiinRatings has developed and standardized credit rating models for more than 50 industries and sub-sectors of Vietnamese enterprises.

FiinRatings is also Vietnam first green bonds approved verifier, in accordance with the green bond international standard by the Climate Bonds Initiative and a Vietnamese pioneer in ESG Evaluation and ESG Scoring for Vietnamese companies.

FiinGroup is Vietnam’s leading provider of financial data analytics platforms, business intelligence and industry research service to local and foreign investors in capital market and corporates to grow their business in Vietnam. For more information, visit: https://www.fiingroup.vn.