What are green bonds? What should you know about green bonds by the latest regulations in Decree 08/2022/ND-CP?
- What is a green bond?
- Which projects are granted green credit, issued green bond?
- How will the proceeds from green bond issuance be used?
- How is the publishing and providing information to assess the impact of the project using green bonds funds implemented?
- How is the regime for publishing information and reporting on the management situation and disbursing capital mobilized from green bond issuance implemented?
- What preferential policies do green bond issuers and investors entitle?
On January 10, 2022, the Government issued Decree 08/2022/ND-CP guiding the Law on Environmental Protection. In particular, green bonds have been mentioned and regulated some aspects, specifically as follows:
What is a green bond?
Green bonds are issued by the Government, local authorities and enterprises to mobilize capital for projects on the list of green classification specified in Article 154 of this Decree.
The Ministry of Natural Resources and Environment shall take change coordinate with relevant ministries and ministerial-level agencies, developing and submitting to the Prime Minister for approval environmental criteria and certification of green credit projects and green bonds issuance (hereinafter referred to as green classification list) before December 31, 2022.
Which projects are granted green credit, issued green bond?
Investment projects in environmental protection field or investment projects with environmental benefits specified in Clause 1, Article 149 or Clause 2, Article 150 of the Law on Environmental Protection 2020 and Decree 08/2022/ND-CP shall be granted green credits and issuance of green bond.
How will the proceeds from green bond issuance be used?
The proceeds from green bonds issuance must be used to implement projects on the list of green classification as prescribed in Clause 2, Article 150 of the Law on Environmental Protection, specifically:
a) Renovation and upgrading of environmental protection works;
b) Replacement of technologies towards application of best available techniques;
c) Application of circular economy and green economy, and reduction of carbon emissions;
d) Prevention and reduction of environmental pollution;
d) Environmental remediation after environmental emergency;
e) Efficient use of natural resources, soil resources, energy saving and development of renewable energy;
g) Construction of multi-purpose and environmentally-friendly infrastructure;
h) Efficient management of water and treatment of wastewater;
i) Climate change adaptation and investment in development of natural capital;
k) Other investment projects.
How is the publishing and providing information to assess the impact of the project using green bonds funds implemented?
Annually to the bonds maturity, the green bonds issuer shall publish and provide information on the impact of the project using green bonds funds on the environment as follows:
- Information provision includes decisions approving the appraisal results of environmental impact assessment reports (if any), environmental permits (if any); information on the results of environmental benefits assessment of projects funded by green bonds specified in Clause 2, Article 150 of the Law on Environmental Protection and Clause 2, Article 154 of this Decree;
- Enterprises issuing green bonds shall disclose information in accordance with the law on issuance of corporate bonds and the contents specified at Point a of this Clause;
- The project owner shall use the capital of green bonds issued by the Government and local authorities to provide information according to the contents specified at Point a of this Clause to the State Treasury (for green bonds issued by the Government), provincial People's Committees (for green bonds issued by local authorities) for publication on the website of the State Treasury and provincial People's Committees.
How is the regime for publishing information and reporting on the management situation and disbursing capital mobilized from green bond issuance implemented?
The regime for publishing information and reporting on the management situation and disbursing capital mobilized from green bond issuance as follows:
- Bond issuers are enterprises implementing the reporting regime, disclosing information on the management and disbursement of mobilized capital from green bond issuance in accordance with the law on issuance of corporate bonds;
- Annually, the State Treasury and provincial People's Committees shall publish information on disbursement for projects on the list of green classification using funds mobilized from the issuance of green bonds issued by the Government and local authorities on the website of the State Treasury and provincial People's Committees.
What preferential policies do green bond issuers and investors entitle?
Green bond issuers and investors of green bonds are entitled to preferential policies including
- To enjoy the service price incentives in accordance with the law on service prices in the field of securities and other support policies and incentives in accordance with the law;
- Public investment projects funded by the issuance of green bonds issued by the Government and local authorities shall be given priority in allocating sufficient funds according to the project implementation schedule in the medium-term and annual public investment plans.
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