Mr. Le Ngoc Lam - Deputy General Director of the Bank for Investment and Development of Vietnam (BIDV) confirms that the well-performed energy savings projects can be legible for low-cost loans at rates lower than the current 9-11%, with Green Investment Facility Program.

Question: How will BIDV consider the loan scheme under the Green Investment Facility, while the small and medium-sized enterprises (SMEs) are also the subjects for loans prioritized by the government?

Mr. Le Ngoc Lam: "There is nothing to do with overlapping. The loan under the support of the government and commercial loan are basically the business loans. Under the guidance from the Government, at present, banks are applying preferential rates to enterprises. Participating in the Green Investment Facility Program, the enterprises can access loans from a specified banks. A special feature of this program is that the mechanism of reward is based on the levels of energy saving. The enterprises with better solution will be rewarded by 10% - 30% of total investment costs, based on energy saving level and it is the resource for principal repayment.

Question: Which interest rate is applied by BIDV for the companies participating in this program?

Mr. Le Ngoc Lam: The businesses may receive financial assistance which is 50% of the loan through bank guarantee to make investment in projects on energy savings. On the side of BIDV, we also release loans under normal commercial mechanism, and the interest rate depends on each client and each specific project. For those projects which are well defined by the Bank appraisal, the loan will be more preferential than the medium and long term interest rates of 9-11%, currently in application. 

Question: In view of loan release in an entirely new field, what would the bank benefit from this program?

Mr. Le Ngoc Lam: The Green Investment Facility provides an innovative financial package including a bank guarantee, a bonus payment based on efficient performance with the funding guaranteed by Vietnamese banks.

I would say this is an opportunity for Vietnamese banks to get acquainted with economic benefits of energy efficiency, to open more opportunities for business loans. One more feature should be noted that the Danish Government, through ANZ, supports 50% of the loan to help companies not to put all their assets under mortgage for 100% of the loan, they just deposit 50% for the corresponding to the loan. I think it is a benefit from this program.

Question: In the context of prevalent bad debts, would commercial banks and BIDV  push the risks to development partners by joining this program?

Mr. Le Ngoc Lam: There is absolutely no intention to push the risk from side to side. This is the win-win cooperation. In this common effort, the Danish government supports the businesses more than they do to the banks, to address the energy efficiency issue in Vietnam. Of course, the banks participating in the program are also energized with an impetus to deploy other loan projects with the businesses.

Thank you!

Danish Ambassador in Vietnam - John Nielsen: 

"The two main obstacles to companies are technological knowledge and finance, in their efforts to take the advantage of benefits resulting from efficient energy.

Green Investment Facility (GIF) is worth USD6.5 million, set up in 2015, for improving energy efficiency and promoting clean and sustainable production in Vietnam. 

GIF focuses on small and medium enterprises in three areas: brick, ceramics and sea food processing.

A total minimum investment for an energy saving project should be VND400 million.  

Businesses can apply for loans through 3 banks: BIDV, Techcombank and SCB.

The Danish government expects to support about 100-130 projects until the end of 2016, to promote the initiatives in energy efficiency in the private sector of Vietnam."

Trong Tan