$700bn price tag for Vietnam’s net-zero pledge

Vietnam will need an estimated $670–700bn in long-term funding to achieve green growth and reach net-zero emissions by 2050, a scale of investment that far exceeds the capacity of the banking system and underscores the urgent need to activate capital markets.

The Ministry of Finance has warned that financial requirements for meeting national climate and green growth targets are exceptionally large. Under current projections, around $368bn of the total will be needed for climate change adaptation alone, equivalent to roughly 6.8% of GDP each year, according to Vietnam Net. 

While banks have made progress in supporting sustainable finance, experts agree that credit alone cannot meet demand. By the end of November 2025, outstanding green credit stood at about VND750 trillion ($30.8bn), growing at an average annual rate of 21% since 2017, faster than overall credit expansion. Despite this strong growth, the figure remains a small fraction of what is required.

Speaking at a seminar on diversifying capital for sustainable development on December 15, State Bank of Vietnam deputy governor Nguyen Ngoc Canh stressed the importance of mobilising broader financial resources. He said domestic and international capital markets, particularly private-sector investment, must play a much larger role alongside banks.

Expanding green finance instruments would reduce pressure on the banking system while enabling more stable and flexible medium- to long-term funding, in line with global trends, Canh noted. He highlighted the need to strengthen capital markets and promote products such as green bonds, sustainability-linked bonds and ESG-compliant equities.

Industry representatives have also called for reforms to “awaken” the capital market. Proposals include building a national database on emissions and energy use, standardising greenhouse gas reporting, offering tax and interest incentives for green projects, and finalising a legal framework for green bonds aligned with international standards.

ADB economists echoed the view that Vietnam must deepen its stock and bond markets, improve investment efficiency and better connect with global financial systems to secure the scale of capital needed for its green transition.