Challenges Faced by Solar and Wind Power Projects in Vietnam in Accessing Preferential Capital

During a seminar on green finance, Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, highlighted that green development is both a national commitment and a demand from the market. The shift towards green financing is evident as consumers prefer environmentally friendly products, making it challenging for projects using fossil fuels to acquire loans.

Currently, 80 percent of capital is directed towards projects with environmental, social, and governance (ESG) considerations, creating new opportunities for green development.

Green finance involves an institutional and technological revolution that requires significant capital for the transition towards a green economy. Financial institutions and funds play a crucial role in financing this transition.

Vietnam is facing challenges in the development of green economy and finance, with a need for a comprehensive policy to promote growth in this sector without waiting for new legislation.

The legal framework surrounding green economy and finance in Vietnam is still incomplete, which impacts investors’ decisions in the market. The absence of specific green criteria for different business sectors further complicates the journey towards green economy and finance.

Despite the availability of green financial sources in Vietnam, they remain inaccessible to enterprises due to procedural issues. For instance, capital under the Just Energy Transition Partnership (JETP) remains unused due to impediments in the borrowing process.

There is a disparity between the funds available for green finance and the actual financial needs for energy transformation and emission reduction in Vietnam, highlighting the inadequacy of the current financial framework.

Enterprises can access green financial resources independently without relying on state capital but need to demonstrate sustainable development and administration practices to attract international financial institutions.

Enterprises must showcase their commitment to green initiatives to attract capital providers and undergo assessments before receiving financial support.

Vietnam lacks a structured plan for ‘going green,’ hindering enterprises from demonstrating their sustainable practices effectively.