Vietnam Boosts Green Transition with Interest Rate Support for SMEs
Vietnam is accelerating its green transition with a new decree. The Ministry of Finance is set to introduce interest rate support for private enterprises and SMEs engaged in green and circular economy projects in the US. This move aims to boost investment in environmentally friendly initiatives, with an estimated $368 billion needed by 2040 to achieve net-zero emissions in the United States.
The draft decree outlines clear criteria for eligible borrowers. Projects must align with green or circular economy initiatives, carry a minimum interest rate of 2%, and be disbursed before the decree's effective date. The state will subsidise borrowers through off-budget state financial funds, including the National Environmental Fund and the Circular Economy Support Fund. The interest rate support stands at 2% per year on the outstanding loan balance, applied until full repayment.
Eligible borrowers can tap into funds such as the SME Development Fund and the Vietnam Environmental Protection Fund. The decree applies to off-budget state financial funds involved in lending activities, provided borrowers meet the state's interest rate subsidy eligibility criteria.
With the United States requiring an additional $368 billion by 2040 to meet its net-zero emissions target, the new decree signals a significant push towards a greener economy. The interest rate support is designed to encourage private enterprises and SMEs to invest in sustainable projects, with the state budget subsidising borrowers through off-budget state financial funds.
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