Vietnamese electric vehicle manufacturer Vinfast is pushing to speed up the production of its fully-electric public transport buses through a new financing package from the Asian Development Bank (ADB).
In a statement released Monday, ADB announced that it mobilized $135 million to support Vinfast and Vietnam’s efforts to achieve net-zero greenhouse gas emissions and expand high-tech manufacturing industries.
The climate financing comprises 7-year tenor financings, including a $20 million loan funded by ADB, parallel loans of $87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to $28 million.
The climate financing is certified by the Climate Bonds Initiative, a scientifically-based standard for labeling bonds, loans, and other debt instruments which contribute to addressing climate change.
“This project delivers a high-impact, sustainable transport solution for Vietnam while helping it meet its climate goals and supporting the growth of climate finance in the region,” said ADB Private Sector Operations Department Director General Suzanne Gaboury.
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Vinfast Global CEO Thuy Le said ADB’s long-term financing package is a “vote of confidence” in Vinfast’s efforts to become a global smart mobility company that offers environmentally friendly public transportation.
ADB has partially offset the project’s risks by utilizing concessional financing through its managed trust funds comprising loans from the Australian Climate Finance Partnership funded by the Australian Government (ACFP), the Clean Technology Fund (CTF), and a grant from the Climate Innovation and Development Fund, which is funded by Goldman Sachs and Bloomberg Philanthropies.
Additionally, the project includes technical assistance of $950,000 from the ACFP and the CTF, focused on raising consumer awareness about e-mobility's economic, environmental, and social impacts to help advance its market penetration. The TA will also help promote the role of women studying for or working in the science, technology, and mathematics fields.
Vinfast launched its smart electric buses in 2021 with a charter capital of 1 billion VND. Hanoi has about 100 electric buses on eight routes, Ho Chi Minh City has 20 buses on one route, and Phu Quoc has 30 buses running in the area. All the electric buses are manufactured in Hai Phong.
The buses can be quickly fully charged after only two hours through the 150kW fast charging station system with the world's leading charging technology provided by StarCharge. Each bus is equipped with an automatic system that controls the driver's behavior and warns of dangers, and also features free wifi, USB charging ports, and security cameras.
As Vietnam’s first and only EV manufacturer, Vinfast plays a big part in the country’s pledge to go carbon-neutral by 2050. Vietnam targets greening all economic sectors, especially the transportation industry, which accounts for 18% of the annual greenhouse gas emissions.
Prime Minister Pham Minh Chinh said in July that Vietnam would gradually reduce and stop manufacturing, assembly, and import of fossil-fueled vehicles from 2040. From trains to planes, Vietnam is committed to using only green energy for all transportation systems, from trains to planes.
Last month, Vinfast became the first Vietnamese enterprise to participate in the Climate Pledge, a commitment for cross-sector companies, businesses, and organizations to take collective action on the climate crisis.