Under the agreement, IFC is providing $24m from its own account and $1m is mobilized from the Earth Fund. Techcombank is committing another $25m to build a total portfolio of $50m over the next two years.
Techcombank plans to provide long-term financing to support companies, especially small and medium enterprises, in efforts to replace equipment and upgrade technology and systems.
IFC’s investment is in line with the government’s national program on energy conservation, which sets targets of achieving annual energy saving equal to 5% to 8% of total national energy consumption over the 2010-2015 period.
This lending facility also will be open for clean production investments that help reduce wastes and resource consumption such as water and material inputs.
Simon Andrews, regional manager for Vietnam, Cambodia, Lao PDR, and Thailand at IFC, said: ”Expanding availability of long-term finance and designing specialized lending products for energy efficiency investments will help accelerate the modernization process in enterprises. This is our first collaboration to open up the energy efficiency financing market in Vietnam.”
Nguyen Vinh, CEO of Techcombank, said: ”This is the right and timely move to help Techcombank’s customers become more competitive while coping with energy price volatility and the challenging mismatch of energy demand and supply.
”Energy efficiency financing is a new business area for local commercial banks in Vietnam, and IFC’s global experience will help us establish a right business model.”
