Insights from FiinRatings expert on Green bond market development: Unlocking opportunities on the Net Zero journey

On June 26, at the online seminar “Developing the green bond market: Unlocking opportunities on the Net Zero journey” co-hosted by the Vietnam Economic & Financial Review (Vietnam's Ministry of Finance) and Agribank, Mr. Nguyen Tung Anh – Director of Credit Research and Sustainable Finance Services at FiinRatings – joined an in-depth discussion analyzing the current status, potential, and strategic solutions to address bottlenecks and effectively unlock the green bond market – one of the key financial instruments supporting Vietnam’s commitment to achieving net-zero emissions by 2050.

On June 26, at the online seminar “Developing the green bond market: Unlocking opportunities on the Net Zero journey” co-hosted by the Vietnam Economic & Financial Review (Vietnam's Ministry of Finance) and Agribank, Mr. Nguyen Tung Anh – Director of Credit Research and Sustainable Finance Services at FiinRatings – joined an in-depth discussion analyzing the current status, potential, and strategic solutions to address bottlenecks and effectively unlock the green bond market – one of the key financial instruments supporting Vietnam’s commitment to achieving net-zero emissions by 2050. 

The seminar also featured participation of representatives from regulatory bodies and industry associations, including Mr. Vu Chi Dzung – Head of Legal - External Affairs Department (State Securities Commission of Vietnam) and Mr. Do Ngoc Quynh – Secretary General of the Vietnam Bond Market Association, who shared additional perspectives on policy and market development. 

Green Bonds: Great potential, yet to be fully unlocked 

According to Mr. Nguyen Tung Anh, Vietnam possesses several favorable conditions to develop its green bond market, such as a strong climate commitment at COP26 and significant investment needs in sustainable projects like renewable energy and low-emission technology transitions. The Asian Development Bank (ADB) estimates that Vietnam will require approximately USD 368 billion for green growth by 2040 – equivalent to USD 20 billion per year. 

However, in practice, the market’s potential remains underutilized both in depth – referring to the number of green projects, assets, and issuance volume – and in breadth, in terms of diversifying sustainable finance instruments and expanding the definition of eligible transition projects. 

Pioneering transactions show positive signals 

Despite its modest scale, Vietnam’s green bond market has seen several notable pioneering transactions. 

Mr. Tung Anh shared that in 2024, FiinRatings provided pre-issuance second-party opinions for two deals: a VND 875.1 billion bond issued by Hoa Binh – Xuan Mai Water Supply Co., Ltd. with a 20-year tenor – the longest maturity ever issued by a non-financial corporate in Vietnam; and a VND 1,000 billion bond issued by IDI – International Development and Investment Corporation in the aquaculture sector. 

Notably, the IDI transaction marked a milestone as the first sustainable aquaculture bond in Asia and the second globally in this sector, and also the first Vietnamese green bond denominated in local currency. Both issuances complied with the Green Bond Principles of the International Capital Market Association (ICMA) and were guaranteed by GuarantCo – demonstrating Vietnamese issuers’ capability to meet international technical standards and earn investor confidence. 

The green finance ecosystem still needs stronger foundations 

Despite encouraging developments, the green bond market still faces numerous obstacles. One major limitation is the lack of qualified professionals and consulting firms capable of developing green bond frameworks that align with industry-specific characteristics and international standards. Most frameworks to date have relied heavily on technical assisstance from multilateral development institutions such as the World Bank and the Global Green Growth Institute (GGGI). 

In addition, the risk of greenwashing – labeling bonds as “green” without sufficient verification – is drawing increasing attention. This issue not only affects the reputation of the issuer and its sector but also undermines market trust. Mr. Tung Anh emphasized: “The market’s development potential lies not only in capital volume but also in the credibility of the verification process. If projects are not properly assessed, the issuance loses its true purpose and exposes both issuers and investors to risks.” 

Key solutions to promote Green Bond Market development 

To promote an effective and sustainable green bond market, Mr. Nguyen Tung Anh emphasized the need to establish a clear and consistent legal framework, create both financial and non-financial incentives for market participants, and develop a robust green finance ecosystem including advisory and payment guarantee institutions. 

Experts at the seminar collectively agreed that the market can only reach its full potential with the synchronized implementation of three core solution groups: 

(i) Policy and Regulation: Expedite the issuance of the national green taxonomy, establish independent verification procedures, and standardize regulations for green rating and assurance providers. 

(ii) Finance and Incentives: Introduce tax exemptions or reductions, support verification costs, and enhance awareness of green finance opportunities. 

(iii) Market Infrastructure: Develop a secondary trading platform for green bonds, promote public listing and transparency, and apply digital technologies to monitor the use of proceeds. 

In addition, it is considered essential to complete high-level policy frameworks concerning risk-sharing intermediaries such as GuarantCo, the Credit Guarantee and Investment Facility (CGIF), or development banks like the Asian Development Bank (ADB). These organizations are already active in Vietnam, providing credit or payment guarantees that support issuers in accessing the market and managing investor risk. However, clear regulations to govern and facilitate their operations domestically remain absent. 

FiinRatings is a strategic partner of S&P Global and currently the only institution in Vietnam accredited by the Climate Bonds Initiative (CBI) to provide green bonds verification in accordance with international standards. With FiinRatings’ support, Vietnamese enterprises can strengthen their access to green capital – a strategic factor to enhance competitiveness and assert their position in the global value chain. 

Watch the full seminar: THIS LINK

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