IFC Invests $200m in LG Innotek Vietnam to Boost Jobs, Exports, and ESG Goals

The International Finance Corporation (IFC) is deepening its support for Viet Nam’s growing high-tech manufacturing sector with a $200 million investment in LG Innotek Vietnam Hai Phong Co., Ltd. (LGITVH). The funding will help expand the company’s production capacity, strengthen local supply chains, and create more skilled jobs, while aligning with Viet Nam’s climate and sustainability commitments.

Expanding High-Tech Production in Hai Phong

LGITVH, a subsidiary of Korea-based LG Innotek Co., Ltd., already operates two large-scale factories in Hai Phong with over 5,000 employees. The new IFC-backed project will support the construction of a third factory focused on smartphone camera modules, transforming the site into a comprehensive manufacturing complex.

This expansion is expected to:

• Increase Viet Nam’s role in the global electronics value chain.

• Strengthen collaboration with local suppliers, enabling them to meet international standards.

• Boost domestic value addition, helping Viet Nam move beyond final assembly into more complex manufacturing processes.

• Contribute to employment growth not only in direct production, but also in logistics, packaging, transportation, and related services.

Strengthening Viet Nam’s Electronics Sector

The electrical and electronics (E&E) industry is already a cornerstone of Viet Nam’s economy, accounting for 40 percent of the country’s exports and employing more than 900,000 people. However, the sector faces ongoing challenges, including a heavy reliance on imported components and limited domestic value creation.

By expanding LGITVH’s production capacity and diversifying its product mix, IFC’s loan aims to reduce dependence on imports, improve the sector’s resilience, and solidify Viet Nam’s position as a competitive hub for high-value electronics exports.

Carsten Mueller, IFC Regional Industry Director for Manufacturing, Agribusiness & Services in Asia and the Pacific, highlighted the significance of the investment:

“This investment will fuel economic growth, create skilled jobs, and enhance value addition and production complexity in the E&E industry, boosting its global standing. Our sustainability-linked loan aims to have a catalytic effect, attracting more lenders and manufacturers, fostering greener supply chains, and cultivating a workforce uniquely equipped to position Viet Nam as a hub for sustainable, high-value production.”

A Sustainability-Linked Loan Driving ESG Goals

Structured as a sustainability-linked loan (SLL), the IFC financing directly ties LG Innotek’s growth strategy to environmental and social performance. The loan incentivizes reductions in greenhouse gas emissions and strengthens compliance with environmental, social, and governance (ESG) standards.

IFC will also assist LGITVH in developing and implementing its SLL framework. This supports LG Innotek’s broader corporate commitments to:

• Transition to 100 percent renewable electricity by 2030.

• Achieve carbon neutrality across all operations by 2040.

Ji-hwan Park, Chief Finance Officer and Senior Vice President of LG Innotek, underscored the value of the IFC partnership:

“IFC’s loan will help enhance LG Innotek’s global business competitiveness as well as improve LGITVH’s production capacity and quality. This partnership is a major step in advancing LG Innotek’s ESG management level. By leveraging IFC’s global network and expertise, we aim to expand ESG-compliant manufacturing capabilities and strengthen our position in the global market.”

Longstanding IFC–LG Collaboration

The IFC’s partnership with the LG Group dates back to the 1970s, when IFC first invested in LG Electronics Inc. (then Goldstar) while Korea was still an aid-recipient nation. Since then, IFC has supported multiple LG Group entities across emerging markets, reflecting a longstanding collaboration that has grown alongside Korea’s economic transformation.

Looking Ahead

For Viet Nam, one of the countries most vulnerable to climate change, the IFC’s use of innovative financial tools such as SLLs reflects the growing need to combine industrial competitiveness with sustainability. The investment is expected to catalyze further financing from private lenders, stimulate technological innovation, and support Viet Nam’s ambition to be a global leader in sustainable, high-value manufacturing.

As Viet Nam strengthens its role in the global electronics market, the IFC-backed LG Innotek project represents a strategic opportunity to foster inclusive economic growth, job creation, and climate resilience in one of Asia’s fastest-developing economies.