Business

IFC to chip in $150 million to buy BIM Group bonds

By Phuong Anh September 21, 2023 | 04:40 PM GMT+7

It is the first local currency sustainability-linked bonds of Vietnam, issued by two subsidiaries of BIM Group, a multi-sector corporation in Vietnam.

IFC’s investment comprises two subscriptions, up to about $100 million to be issued by BIM Land – a leading tourism and property developer in Vietnam, and up to about $50 million to be issued by Thanh Xuan Joint Stock Company.

The proceeds will be used to develop the Thanh Xuan valley project in Vinh Phuc province, including an eco-friendly and unique residential community alongside a hotel complex, under the InterContinental brand, and other relevant services and infrastructure.

IFC to invest $150 million in BIM Group’s bonds — IFC’s investment in BIM Group aim to help issuers expand their businesses while creating jobs, boosting competitiveness, and supporting the country’s low-carbon growth model.

Located in area of up to 170ha, Thanh Xuan valley was started two decades ago by Thanh Xuan Joint Stock Company. However, the implementation was stagnated for many years, after the company built only some internal roads, and sold subdivided land to customers.

In the end of last year, the project was restarted with the construction of the first 72 villas after being taken over by BIM Land.

Besides Thanh Xuan valley, IFC’s funding will also help the developers implement water and energy savings solutions in two BIM Land hotels, InterContinental and Regent, in Phu Quoc island.

An innovative financing tool to support global sustainable development, these sustainability-linked bonds (SLBs) will provide financial incentives for both BIM Land and Thanh Xuan company, to improve water conservation and energy efficiency in three of their hospitality assets to be accredited by EDGE, IFC’s green building certification system.

IFC's commitment to invest in BIM Land was made just a few days after this real estate development company called way $99 million-bonds, a part of $200 million-bonds that the company issued in 2021 through the Singapore stock exchange.

BIM Land explained that buying back bonds before maturity is part of a plan to restructure existing debts, helping it replace the above dollar bonds with local currency loans with longer terms.

“Sustainability is a critical part of our strategy to position BIM Land as a leading property developer and operator in Asia with a long-term vision. We hope to attract international investors as we develop green and quality tourism infrastructure across the country,” said Doan Quoc Huy, BIM Group’s cice chairman and CEO.

He added that: “Most importantly, IFC’s financing and advice will help catalyze our green transition in line with the industry’s good practices and global climate goals.”

IFC has also helped BIM Land develop a sustainability-linked financing framework with tailor-made sustainability performance targets.

“Private capital is key to Vietnam’s green transition. The issuance of the first local currency SLBs in the country will signal the viability of innovative green financing instruments as an alternative source of capital for climate-smart projects," said Thomas Jacobs, IFC country manager for Vietnam, Cambodia, and Lao.

IFC’s funding will also encourage developers to align their interests with responsible investment, and to mobilize funding from green capital markets, paving the way for sustainable tourism sector.