Incentives for green projects

Vietnam is reviving the 2% interest rate support policy, creating a dual boost for green financing and helping businesses accelerate sustainable development, following directives from the Prime Minister.

Regarding eligibility, the draft Decree guiding the interest rate support policy by the State Bank of Vietnam stipulates that borrowers from off-budget state financial funds must meet all conditions: loans must be used for projects certified by competent authorities as meeting criteria for green, circular, and ESG-aligned projects, and must be included in the List of Green and Circular Projects Applying ESG Standards published on the electronic portal of the Ministry of Agriculture and Environment.

The draft Decree also clearly specifies interest rate support for private-sector enterprises, household businesses, and individual business owners borrowing through off-budget state financial funds to implement green and circular projects applying ESG frameworks, with a support rate of 2% per year.

Currently, many major enterprises, Vinamilk being a notable example, are actively implementing ESG standards, as such compliance gives their products better access to demanding markets like Europe and the United States, where both consumers and importers require strict adherence to sustainability and social responsibility.

Additionally, many FDI enterprises are proactively transitioning toward greener practices, simultaneously driving revenue growth, protecting the environment, and meeting social criteria. Therefore, private-sector firms, household businesses, and solo entrepreneurs are among the groups most in need of policy support, as green transition can boost sales, enhance brand perception, and shape new consumer trends.

Interest rate support for the private sector is also a key factor in helping businesses overcome high initial investment barriers in fields such as renewable energy, recycling, waste treatment, smart agriculture, and green transport. This approach helps restructure capital flows toward environmentally friendly economic activities, thereby sending a clear market signal that encourages sustainable investment and development.

Phuong Dong