April 7, 2009 -- At IFC, knowledge-sharing is an important part of doing business. A team within the Environment and Social Development Department took this knowledge-sharing concept on the road recently, facilitating a workshop of high-ranking officials in Vietnam and China to share experiences on sustainable banking.
About 100 representatives from Vietnam’s banks, media, government, and donors gathered in Hanoi for a workshop on sustainability banking and to learn from China’s experiences. IFC initiated the session to foster South-South cooperation between China and Vietnam. The time was ripe: energy/electricity shortage is a hot topic in Vietnam, and environmental and social (E&S) risk management is a new concept for the country’s financial sector.
"The sharing of China's and IFC's experience in the areas of environment and social sustainability is very timely for Vietnamese banks," said Nguyen Viet Manh, Deputy Director General of Vietinbank, one of the largest banks in Vietnam. "We found the tools to manage environmental and social risk and the financing of energy efficiency projects particularly useful."
Highlights of the workshop included:
- Sharing China’s experience in establishing and implementing a green credit policy.
- Sharing IFC’s experience with E&S Risk Management, including IFC’s Performance Standards and the Equator Principles. Since 2008, IFC has partnered with the Chinese government and banks to introduce these tools to support China’s Green Credit Policy.
- A sharing of experience on China’s Energy Efficiency Finance program. Energy efficiency financing in Vietnam got off to a slow start due to local banks’ perception of the risk involved. The experience of Industrial Bank of China, China’s first Equator bank, which used IFC’s risk-sharing facility and advisory services to build a $500 million portfolio within three years, provided a powerful and practical example for Vietnamese banks, particularly given the similarities of China and Vietnam in historical and economic development.
Following the workshop, IFC began discussions with the State Bank Vietnam on a study tour for Vietnamese officials and bankers to China, and a possible collaboration in developing E&S risk management tools based on IFC standards and Equator Principles for the local financial sector. Meanwhile, the IFC Energy Efficiency Finance Project initiated negotiation with a number of local commercial banks for new product development.
