EV maker VinFast gets $135 million from ADB-led green funding

By Kieu Mai - Oct 26, 2022 | 05:50 PM GMT+7

TheLEADERThe assistance will support Vietnam’s efforts to achieve net-zero greenhouse gas emissions, and expand high-tech manufacturing industries.

The Asian Development Bank (ADB) mobilized a $135 million financing package for VinFast trading and production JSC (VinFast), to manufacture Vietnam’s first fully-electric public transport bus fleet, and first national electric vehicle (EV) charging network.

The 7-year tenor financing comprises a $20 million loan funded by ADB, parallel loans of $87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to $28 million.

The climate financing is certified by the Climate Bonds Initiative, a scientifically-based standard for labelling bonds, loans and other debt instruments which contribute to addressing climate change.

ADB has partially offset the project’s risks by utilizing concessional financing from its managed trust funds, comprising a loan of up to $20 million from the Australian Climate Finance Partnership funded by the Australian Government (ACFP); a loan of up to $5 million from the Clean Technology Fund (CTF), and a grant of up to $3 million from the Climate Innovation and Development Fund, which is funded by Goldman Sachs and Bloomberg Philanthropies.

Parallel loans were also mobilized by ADB from Export Finance Australia, the Finnish Fund for Industrial Cooperation, Oesterreichische Entwicklungsbank AG, and responsAbility.

“This project delivers a high-impact, sustainable transport solution for Vietnam, while helping it meet its climate goals and supporting the growth of climate finance in the region,” said ADB private sector operations department Director general Suzanne Gaboury.

She also emphasized that Asia and the Pacific is the frontline of the global fight against climate change, and private sector projects like this one with innovative partners such as VinFast, are crucial to help its countries decarbonize their economies.

Vietam’s transport sector accounts for 18 per centof annual greenhouse gas emissions, and its decarbonization, through options like e-mobility, will directly impact the country’s ambition to achieve net zero emissions by 2050.

Additionally, the project includes a technical assistance (TA) of $950,000 from the ACFP and the CTF, focused on raising consumer awareness about e-mobility’s economic, environmental, and social impacts to help advance its market penetration.

The TA will also help promote the role of women studying for or working in fields related to science, technology, and mathematics.

“We are delighted to receive this extensive support and a long-term financing package from ADB and several esteemed international development finance institutions. We see this as a vote of confidence in our efforts to become a global smart mobility company that offers environmentally friendly public transportation, and to advance Vietnam’s transition to a low carbon economy,” said VinFast’s Global CEO Thuy Le.

Established in 2017, VinFast is Vietmam’s first domestic car company and e-vehicle manufacturer. It is a subsidiary of Vingroup JSC, Viet Nam’s largest private enterprise and the largest listed company in Vietnam.

VinFast develops e-cars for the domestic and international market, and is investing in a nationwide network of fast-charging units to support its e-vehicle expansion in the country.