Green Credit Tops VND 700 Trillion: When “Cheap Money” Is Only for “Clean Projects”

Date of publication: 22/01/2026

Category: Green Finance & Capital Markets

Prepared by: ESG Expert Team – Carbon Credit Viet Nam Joint Stock Company

In an overall credit landscape still painted in shades of grey due to economic headwinds, “Green credit” is emerging as a bright spot with impressive growth momentum.

According to the latest figures from the State Bank of Vietnam (SBV), as of the end of Q1/2025, system-wide outstanding green credit reached a record VND 704,240 billion, maintaining a compound annual growth rate (CAGR) of over 21% per year throughout the 2017-2025 period. This figure sends a powerful message from the banking system: The door to borrowing is opening wide for businesses with sustainable development strategies, while steadily closing on polluting industries.

1. THE BIG PICTURE: THE SHIFT IN CAPITAL FLOWS

Green credit currently accounts for approximately 4.3% of total outstanding loans in the economy. While this share remains modest compared with the 10% target for the end of 2025, its growth rate far outpaces overall credit growth.

This points to an irreversible trend: Banks are proactively engaging in “Portfolio Rebalancing.” They are gradually reducing the lending share allocated to environmentally high-risk sectors (such as coal-fired thermal power and nature-encroaching resort real estate) and shifting toward sectors that enjoy preferential treatment on required reserves and refinancing.

Capital flow structure (Q1/2025):

• Renewable energy & Clean energy: Holding the crown with >37% market share (wind power, solar power, biomass power).
• Green agriculture: Second with >29% (high-tech agriculture, low-emission rice value chains).
• The remainder: Water management, waste treatment, and green buildings.

2. HOW ARE VIETNAMESE BANKS “GOING GREEN”?

According to the EuroCham White Book 2025, Vietnam’s banking system has made remarkable strides in ESG risk governance:

• 76% of banks have integrated environmental risk into their Credit Appraisal processes. That is, when reviewing loan applications, credit officers no longer look only at collateral, but also at the project’s risk of environmental penalties or climate change exposure.
• 40% of banks have built distinct internal processes for green credit with specific incentives.

The “Big Players” leading the race:

• BIDV & VietinBank: Leading in disbursement scale for large-scale renewable energy projects.
• VPBank & TPBank: Dynamic in small and medium-sized (SME) loan packages, especially packages offering 0% interest in the initial period or a 1-2% interest rate reduction for businesses holding green certifications.

3. WHY SHOULD BUSINESSES PAY ATTENTION RIGHT NOW?

At a time when the Cost of Capital is a heavy burden, green credit delivers a direct financial competitive advantage:

1. Cheaper interest rates: The interest rate gap between green loans and ordinary loans can reach 1.5% – 2.5% per year. On a medium-term loan of VND 100 billion, a business saves billions of dong in interest expenses every year.
2. Longer tenors: Green credit packages often come with longer principal grace periods, well suited to businesses’ technology investment cycles.
3. Enhanced brand reputation: Being granted green credit by a bank serves as an “indirect certification” of a project’s sustainability, making it easier for businesses to work with international partners.

4. BARRIERS AND SOLUTIONS FOR ACCESS

Although the money is plentiful, not every business can borrow it. Surveys show that the biggest barrier lies not with banks lacking funds, but with businesses lacking applications that meet the standards.

Main barriers:

• Project dossiers lack quantitative environmental impact assessments.
• Lack of transparency in green-project cash flow reporting.
• No independent consulting firm has verified the “greenness” of the technology.

Action Recommendations from Carbon Credit Viet Nam:

To “unlock” this VND 700 trillion pool of capital, the Chief Financial Officer (CFO) should coordinate with the Engineering department to:

1. “Re-label” the investment portfolio: Review all upcoming projects. Which projects involve energy savings, wastewater treatment, or paper-reducing digital transformation? Separate them into items eligible for green loans.
2. Prepare an Impact Report: Instead of submitting only a business plan, attach an estimate report: How many tonnes of CO2 will this project reduce? How many cubic meters of water will it save? These figures are the “language” banks need in order to report back to the State Bank of Vietnam (SBV) and international donors.
3. Seek ESG advisory services: Use a third party to build a Green Finance Framework for your business, ensuring loan applications meet the standards of Decision 21/2025/QD-TTg (as analyzed in Article 7).

5. CONCLUSION

The figure of VND 704,000 billion is only the beginning. With the Net Zero commitment for 2050, the State Bank of Vietnam (SBV) has set a target for green credit to account for 25% of total outstanding loans by 2030. This means trillions upon trillions of dong will be pumped into the economy over the next 5 years in the form of green capital.

Businesses that catch this wave will hold abundant financial resources to break ahead. Conversely, businesses that remain indifferent will find it increasingly difficult to access loans, or will have to accept borrowing at high risk-penalty interest rates.

About us: This report was prepared by the ESG Strategy & Policy Team of Carbon Credit Viet Nam Joint Stock Company. We support businesses in optimizing green loan applications, connecting with financial institutions, and advising on comprehensive climate finance solutions.