Four Japanese banks have approved a credit line totalling US$300 million to finance renewable energy projects in Vietnam in support of the country’s target to achieve carbon neutrality by 2050.

The Japan Bank for International Cooperation (JBIC), Mizuho Bank, Joyo Bank, and Shiga Bank will provide the funding via Vietcombank as part of JBIC's green operations.

The financing deal, signed on March 29, includes US$165 million from JBIC, which will also provide a guarantee for the portion co-financed by private financial institutions.

“As Japan's policy-based financial institution, JBIC will continue to support global environmental preservation efforts in cooperation with local financial institutions by drawing on its various financial facilities and programmes for structuring projects and by performing its risk-assuming function,” JBIC says in a statement. “Through the loan, JBIC supports the Government of Vietnam's and Vietcombank's initiatives for preserving the global environment.”

Vietcombank will in turn provide subleasing loans, mainly to domestic businesses.

The loan is in line with the Asia Zero Emissions Community concept, which is led by the Japanese government and pursues carbon neutrality and economic growth depending on the circumstances of each country. It also aligns with the Just Energy Transition Partnership, which was signed in December 2022 by the Vietnamese government and its partner countries, including Japan and the United States.

This is the first loan JBIC extends under the Vietnam Climate Finance Framework, which was announced under the Australia-Japan-United States Trilateral Infrastructure Partnership this January. The three other partners along with JBIC are the US International Development Finance Corporation (DFC), the Department of Foreign Affairs and Trade of Australia, and Export Finance Australia (EFA).

The DFC is the US government’s development finance institution. EFA is the Australian government’s export credit agency that plays a role in financing Australian exports and interests, including overseas infrastructure developments.