VPBank Issues Vietnam’s First Private Sustainability Bond with IFC Backing

Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) has marked a historic milestone in its sustainable growth journey by issuing a $300 million sustainability bond—the first ever by a private bank in Viet Nam. The landmark transaction underscores the country’s growing integration with global green capital markets while addressing both economic and climate challenges.

The bond was privately issued to two anchor investors: the International Finance Corporation (IFC), which invested $200 million, and the French development finance institution Proparco, which provided parallel funding. Structured under VPBank’s newly developed Sustainable Finance Framework (SFF), proceeds will fund projects with social and environmental impact.

Supporting SMEs, Women Entrepreneurs, and Green Growth

IFC’s investment has been strategically allocated:

• 60% (about $120 million) will support lending to small and medium-sized enterprises (SMEs), with half dedicated to women-owned businesses.

• 40% (about $80 million) will finance climate-friendly projects, from renewable energy to energy efficiency.

SMEs make up one-third of all jobs in Viet Nam but face persistent financing gaps. By expanding VPBank’s SME loan portfolio, the bond is expected to create up to 38,000 jobs over the next five years, directly boosting household incomes and strengthening economic resilience.

On the climate side, the funding will help advance Viet Nam’s net-zero 2050 commitment, supporting the country’s transition to a low-carbon, high-income economy by 2045. Currently, climate finance represents just 4.5% of the total credit balance in Viet Nam’s banking sector—underscoring the need for increased investment.

A Milestone for Vietnam’s Banking Sector

VPBank CEO Nguyen Duc Vinh hailed the transaction as a breakthrough for the country’s financial system:

“This landmark issuance represents a major milestone in VPBank’s sustainable development journey and reaffirms Viet Nam’s capacity to connect with global green capital flows. Proceeds from the bond will be directed toward priority green and social projects, advancing the government’s net zero commitment and fostering a prosperous, sustainable future for the country.”

IFC’s Role and Advisory Support

The IFC’s involvement goes beyond financing. Backed by the Australian government, IFC has provided advisory assistance to VPBank to:

• Assess green finance opportunities.

• Build internal capacity on climate finance in line with global best practices.

• Develop VPBank’s Sustainable Finance Framework (SFF), ensuring the effective use and tracking of green and social funding.

Thomas Jacobs, IFC Country Manager for Viet Nam, Cambodia, and Lao PDR, said the deal will set benchmarks for sustainable finance in Viet Nam:

“This is a pioneering transaction for Viet Nam’s banking sector and a model for other financial institutions in the country. By anchoring VPBank’s first sustainability bond and providing technical support, IFC is helping to set market standards for sustainable finance, mobilize private capital, and channel funding to where it is most needed — SMEs, women entrepreneurs, and climate projects.”

Building on Past Momentum

This sustainability bond builds on VPBank’s growing record in sustainable finance. Over the past five years, the bank has mobilised $2 billion for a wide range of green and social projects, from renewable energy to inclusive finance.

VPBank is also a member of the Alliance for Green Commercial Banks, an IFC-led initiative that provides tailored training, technical exchanges, and access to a regional peer-learning network to accelerate climate financing.

A Blueprint for the Future

The issuance of VPBank’s bond is more than a financial innovation; it is a signal of how Viet Nam’s financial institutions are embracing global sustainability standards. By linking capital markets to social equity and climate action, the deal offers a blueprint for other banks in emerging economies aiming to scale up their role in sustainable development.