What are green bonds according to legal regulations in Vietnam?

1. What are green bonds according to legal regulations in Vietnam? 

Article 157 of Decree 08/2022/ND-CP stipulates green bonds as follows:

1. Green bonds are bonds issued by the Government, local governments and enterprises to raise capital for the projects in the green list specified in Article 154 of this Decree.

2. The issuance of green bonds shall be subject to regulations of law on issuance of bonds, LEP and regulations of this Decree.

3. Proceeds from issuance of green bonds shall be used to execute the projects in the green list as prescribed in clause 2 Article 150 of the LEP.

4. According to the regulations set out in clauses 1 and 2 Article 154 of this Decree, the Ministry of Planning and Investment shall provide guidelines for classifying projects in the green list to be included in the public investment portfolio when preparing medium-term and annual public investment plans to form a basis for the Government and local governments to make a selection when issuing green bonds.

5. Every green bond issuer shall provide and disclose information in accordance with regulations of law on issuance of bonds and disclose information as prescribed in clauses 6 and 7 of this Article.

6. On an annual basis, on the bond’s maturity date, every green bond issuer shall disclose and provide information on the impact assessment of projects funded by capital from green bonds on the environment as follows:

a) The information to be provided includes decision on approval of EIAR appraisal result (if any), environmental license (if any); results of assessment of environmental benefits offered by projects using green bonds specified in clause 2 Article 150 of the LEP and clause 2 Article 154 of this Decree;

b) Every enterprise issuing green bonds shall disclose information according to regulations of law on issuance of corporate bonds and point a of this clause;

c) Every owner of the investment project using capital from green bonds issued by the Government and local government shall provide the information specified in point a of this clause to the State Treasury (for green bonds issued by the Government) and the provincial People’s Committee (for green bonds issued by the local government) for publishing thereof on the website of the State Treasury and provincial People’s Committee.

7. Regulations on disclosure of information and reporting of management and disbursement of capital raised from issuance of green bonds:

a) The bond issuer which is an enterprise shall comply with regulations on reporting and disclosure of information about management and disbursement of capital raised from issuance of green bonds according to regulations of law on issuance of corporate bonds;

b) On an annual basis, the State Treasury and provincial People’s Committees shall disclose information about disbursement of capital to the projects in the green list using capital raised from issuance of green bonds issued by the Government and local governments on their website.

8. Green bond issuers and investors are entitled to receive the following incentives:

a) Receive incentives for service prices according to regulations of law on prices of securities services and other incentives and assistance as prescribed by law;

b) Regarding investment projects using capital raised from issuance of green bonds issued by the Government and local governments, be entitled to receive sufficient capital according to the project progress in the medium-term and annual investment public plans.

2. What are regulations on sources of operating capital of VEPF in Vietnam?

Article 158 of Decree 08/2022/ND-CP stipulates sources of operating capital of VEPF as follows:

1. Equity, including:

a) Charter capital which is at least 3,000 billion dong generated from the following sources: funding derived from state budget and development investment fund before the effective date of this Decree; extra funding from the development investment fund; state funding from public investment sources prescribed by law.

The change in charter capital of the VEPF shall be decided by the Prime Minister.

b) Development investment fund;

c) Other capital under the VEPF’s ownership as prescribed by law.

2. Other capital, including domestic and foreign organizations and individuals’ sponsorships, assistance, voluntary contributions and authorized investments for environmental protection and climate change adaptation; VEPF’s operating capital provided by the competent authority before the effective date of this Decree; other sources of capital prescribed by law.

3. The Prime Minister shall decide the organizational structure, operation and financial mechanism of the VEPF.

3. What are sources of operating capital of provincial environment protection funds in Vietnam?

Article 159 of Decree 08/2022/ND-CP stipulates sources of operating capital of provincial environment protection funds as follows:

1. Equity, including:

a) Charter capital which is at least 30 billion dong. For an operating fund whose charter capital is less than 30 billion dong, there must be a roadmap for increasing the charter capital within 05 years from the effective date of this Decree. The charter capital is generated from the following sources: funding derived from state budget and development investment fund before the effective date of this Decree; extra funding from the development investment fund; state funding from public investment sources prescribed by law.

The change in charter capital of a provincial environment protection fund shall be decided by the Chairman/Chairwoman of the provincial People’s Committee.

b) Development investment fund;

c) Other capital under the fund’s ownership as prescribed by law.

2. Other capital, including domestic and foreign organizations and individuals’ sponsorships, assistance, voluntary contributions and authorized investments for environmental protection and climate change adaptation; VEPF’s operating capital provided by the competent authority before the effective date of this Decree; other sources of capital prescribed by law.

3. Chairmen/Chairwomen of provincial People’s Committees shall decide the organizational structures, operation and financial mechanisms of the provincial environment protection funds.

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