Vietnam’s leading tourism and property developer BIM Land Joint Stock Company and its subsidiary Thanh Xuan Joint Stock Company are issuing the country’s first local currency (LCY) sustainability-linked bond (SLB) as local companies seek financing to grow and seize new opportunities amid a green transition.
The International Finance Corporation (IFC) is investing up to 3.50 trillion dong (US$150 million) in a transaction designed to help issuers expand their businesses while creating jobs, boosting competitiveness, and supporting Vietnam’s low-carbon growth model.
The IFC investment, announced on September 19, comprises two subscriptions – up to 2.33 trillion dong to be issued by BIM Land and up to 1.17 billion dong to be issued by Thanh Xuan. Both issuers are subsidiaries of BIM Group, a multi-sector corporation in Vietnam. The proceeds will be used to develop the Thanh Xuan Valley project in Vinh Phuc province, including an eco-friendly residential community alongside a hotel complex – under the InterContinental brand – and other relevant services and infrastructure. The funding will also help the developers implement water and energy savings solutions in two BIM Land hotels – InterContinental and Regent – on Phu Quoc island.
The SLB will provide financial incentives for both BIM Land and Thanh Xuan to improve water conservation and energy efficiency in three of their hospitality assets to be accredited by EDGE, the IFC green building certification system. This is expected to avoid an estimated 4,000 metric tonnes of carbon dioxide annually – equivalent to greenhouse gas emissions from 890 gasoline-powered passenger vehicles driven for a year, according to IFC.
BIM Group vice-chairman and CEO Doan Quoc Huy describes sustainability as a critical part of their strategy to position BIM Land as a leading property developer and operator in Asia with a long-term vision. “We hope to attract international investors as we develop green and quality tourism infrastructure across the country,” he says. “Most importantly, IFC’s financing and advice will help catalyze our green transition in line with the industry's good practices and global climate goals."
IFC has also helped BIM Land develop a sustainability-linked financing framework with tailor-made sustainability performance targets.
IFC country manager for Vietnam, Cambodia and Lao PDR Thomas Jacobs says private capital is key to Vietnam’s green transition. “The issuance of the first local currency SLB in the country will signal the viability of innovative green financing instruments as an alternative source of capital for climate-smart projects,” he points out. “IFC’s funding will also encourage developers to align their interests with responsible investment and to mobilize financing from green capital markets, paving the way for sustainable tourism sector.”
Climate and sustainability have become bigger focus areas for IFC engagements in Vietnam in line with the government’s twin goals to become a high-income country by 2045 and achieve net zero by 2050. To date, IFC says it has committed over US$900 million in long-term finance to support climate-related projects in the country. IFC’s commitments in Vietnam have reached close to US$1.9 billion in fiscal year 2023 ending June 30, helping local companies recover from the Covid-19 pandemic and navigate challenging internal and external environments.
The Thanh Xuan Valley project includes an eco-friendly residential community. Photo: BIM Land