GuarantCo provides a VND 1,000 billion guarantee over green bonds issued by IDI Sao Mai to support Vietnam’s aquaculture infrastructure, a first in Asia

  • Date written
  • November, 2024

GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a VND 1,000 billion (c. USD 40 million equivalent) guarantee for green bonds issued by International Development and Investment Corporation, a subsidiary of Sao Mai Group and a leading sustainable fish export company in Vietnam (IDI Sao Mai).

GuarantCo provides a VND 1,000 billion guarantee over green bonds issued by IDI Sao Mai to support Vietnam’s aquaculture infrastructure, a first in Asia

This is the first green bond transaction in the aquaculture sector in Asia and the first local currency (VND) green bond issued by a non-financial institution corporate. The bonds were oversubscribed and were invested by Manulife Vietnam and AIA Vietnam, extending their strong association with GuarantCo-guaranteed bonds in Vietnam and in the Southeast Asia region. This is GuarantCo’s first transaction in aquaculture infrastructure and its fourth in Vietnam.

The proceeds will enable the next stage of the company’s growth through the development of pangasius fish processing, as well as seeding and hatching facilities. This is in response to a projected 1.4 per cent growth in global fish consumption and increasing export demand, specifically for Vietnamese pangasius, from traditional and new markets in the coming years. The growth will increase income generation for local farming households who are contracted to cultivate the fish.

In accordance with its green bond framework, IDI will commit to allocating capital raised from the green bonds to eligible green projects with the goal of promoting sustainable and environmentally friendly pangasius farming and production. The sustainable fish processing practices are in alignment with international sustainability standards set by the Aquaculture Stewardship Council (ASC) and Best Aquaculture Practices (BAP). These standards are crucial for Vietnamese companies seeking to access markets with robust sustainability requirements and to meet a growing demand for eco-friendly and responsibly sourced products.

The transaction aligns and contributes to multiple sustainable development goals (SDGs), including SDG 14 (Conserve and sustainably use the oceans, seas and marine resources for sustainable development). The successful issuance of this green bond seeks to further demonstrate the untapped market potential for green financing instruments to help address the significant investment and infrastructure financing gap in the country.

The bond is structured in alignment with ICMA’s Green Bond Principles and has been independently assessed by FiinRatings, which provided a second party opinion on the issuance. This is a continued collaboration between GuarantCo and the Global Green Growth Institute (GGGI) on green bond issuances following the EVN Finance green bond in 2022, which was Vietnam’s inaugural local currency, internationally verified, thematic corporate bond. In this transaction, GGGI provided IDI Sao Mai with essential technical support and strategic recommendations on developing the green bond framework, with a focus on enhancing sustainable seafood farming and processing.

IDI Sao Mai has been supported by technical assistance grants from PIDG to fund the appointment of health, safety and environmental social (HSES) and financial model consultants to provide advisory services that were key to ensuring the transaction and projects have been executed in line with market best practices.

Nishant Kumar, Managing Director, Asia Investments at GuarantCo and Head of Coverage – Asia at PIDG, said:

“We are excited to close the transaction with IDI Sao Mai, our first in the agricultural infrastructure sector. This project will make a significant impact towards achieving two Sustainable Developments Goals. We are hopeful that following the successful issuance of EVNF’s first internationally verified green bond in Vietnam, this transaction will further address infrastructure financing gaps in Vietnam, through demonstration and replication effects of use of green bonds for non-financial companies in Vietnam. PIDG, through GuarantCo, continues to seek out opportunities to mobilise emerging markets to deliver against our climate action aims aligned with the PIDG 2030 strategy.”

Le Van Canh, Chief Executive Officer of International Development and Investment Corporation (IDI), stated:

“IDI Company stands at the forefront of Vietnam’s pangasius full-cycle production and trading sector. We are privileged to announce the issuance of a green bond, backed by GuarantCo, totalling VND 1,000 billion. This transaction demonstrates that IDI has successfully met the rigorous standards of the international financial framework, reaffirming our commitment to sustainable development, intertwined with environmental and social considerations. We take pride in being the first entity in Vietnam and globally within the fisheries sector to attain Green Bond certification. IDI is resolutely committed to upholding the highest performance standards and contributing to sustainable development. We aspire for this certification to serve as a benchmark for growth and replication within the Vietnamese business community.”

Tina Nguyen, CEO of Manulife Vietnam, said:

“As a member of a global financial corporation operating in Vietnam, we have always been committed to promoting a better, wealthier and greener Vietnam. In fact, as a responsible investor, we have been pioneering in ESG investing for the sustainable development of Vietnam. Our investment in this green bond, in addition to our previous green investments, is another demonstration of Manulife’s commitment to this goal. With a long-term commitment to Vietnam, we hope to continually support the Government of Vietnam in achieving its net zero carbon emission target.”

Andrew Loh, CEO of AIA Vietnam, stated:

“AIA is dedicated to delivering long-term value by investing in companies committed to sustainable outcomes. As of November 2024, our investments in Green, Social, and Sustainable Bonds have reached USD 6.3 billion. We are honoured to be a long-term trusted partner of GuarantCo in promoting sustainable investment in Vietnam. In 2022, AIA Vietnam participated in the first-ever partially guaranteed and internationally verified green bond of EVNFinance, guaranteed by GuarantCo. This year, we have reaffirmed our commitment by closing another green bond transaction with IDI, also guaranteed by GuarantCo, in compliance with the Green Bonds Principles published by the ICMA. As part of our ESG strategy at AIA, we prioritise investments that benefit the environment and society, aligning with our purpose to help people live Healthier, Longer, Better Lives.”

Lê Mạnh Hùng, CEO of VCBS, said

“We are pleased that VCBS collaborated in this transaction alongside the issuer (IDI), GuarantCo, and other financial institutions, contributing to the successful bond issuance. As lead arranger and bond offering dossier advisor, marking our second transaction with GuarantCo and GGGI, VCBS is confident that this green bond issuance will continue to highlight the financial strength, capacity, and operational potential of Vietnamese Issuers that are advancing toward international standards. The seafood industry serves as a cornerstone of Vietnam’s agricultural sector, with substantial growth in pangasius and shrimp production and exports to global markets. Therefore, IDI’s commitment to sustainable aquaculture practices, combined with efforts to mitigate marine pollution for issuing green bond shall become a model for other enterprises in the sector and is set to lead the development of innovative and sustainable financial products within the Vietnamese market”.

Helena McLeod, Acting Director General, Global Green Growth Institute (GGGI), said:

“As Vietnam aims to establish itself as the world’s leading seafood processing center, securing access to green finance is essential for the necessary upgrades to its sustainable infrastructure. GGGI is pleased to advise IDI Sao Mai and collaborate with GuarantCo on this groundbreaking transaction, thanks to the support from the Grand Duchy of Luxembourg, which will enable more key players in the market to access green capital and enhance the sustainability of Vietnam’s seafood processing and aquaculture industry. As a trusted advisor committed to promoting green growth in emerging markets, GGGI remains dedicated to working alongside vital stakeholders, including the Vietnamese government, local enterprises, and investors in the capital market, to support Vietnam in achieving its net-zero target by 2050.”

Nguyen Quang Thuan, CEO of FiinRatings, stated,

“We are pleased to have contributed to the successful green bond issuance by IDI, marking the first such local currency bond transaction by a non-financial issuer in Vietnam. This assessment represents our second-party opinion on their green bond framework, which aligns with the ICMA’s Green Bond Principles. The issuance not only promotes sustainable aquaculture practices at IDI but also fosters the growth of Vietnam’s green finance ecosystem. As a leading agency for credit rating and green bond verification in Vietnam, we take pride in enhancing the transparency of sustainable finance practices, thereby strengthening market integrity”.

NOTES TO EDITORS

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, and Global Affairs Canada plus France through a stand-by facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabled USD 6.2 billion of total investment and USD 5.2 billion of private sector investment, giving 45.2 million people improved access to infrastructure and creating around 229,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity and urgency.
PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – which includes InfraCo – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAIF (the Emerging Africa and Asia Infrastructure Fund), one of the first and more successful blended debt fund in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing.
Since 2002, PIDG has supported 233 infrastructure projects to financial close, which provided an estimated 228 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Global Affairs Canada, Germany, and the IFC pidg.org

About IDI

IDI is a publicly listed agri-aquaculture company in Vietnam and one of Mekong Delta’s largest in its segment. Established since 2003 and publicly listed on the Ho Chi Minh Stock Exchange (HOSE) since 2011, the company operates an integrated pangasius fish business encompassing hatchery, feed, farming, harvesting, processing for export activities. In terms of export, the company has a global client base of over 300 customers across more than 50 countries. As one of the key contributors to its community, the company employs over 3600 employees and works with over 1,000 contracted farmers (individuals and households) to ensure that livelihoods are maintained and kept abreast with the ever-changing pace of technology.

About Manulife

Manulife Financial Corporation is a leading international financial services provider that helps people make their decisions easier and lives better. With our global headquarters in Toronto, Canada, we provide financial advice and insurance, operating as Manulife across Canada, Asia, and Europe, and primarily as John Hancock in the United States. Through Manulife Investment Management, the global brand for our global wealth and asset management segment, we serve individuals, institutions, and retirement plan members worldwide. At the end of 2021, we had more than 38,000 employees, over 119,000 agents, and thousands of distribution partners, serving over 33 million customers. Our principal operations are in Asia and Canada, and the United States, where we have served customers for more than 160 years. We trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong. In the previous 12 months we made CAD$32.7 billion in payments to our customers. Not all offerings are available in all jurisdictions. For additional information, please visit www.manulife.com

About AIA Vietnam

AIA Vietnam is a member of the AIA Group – the largest independent, Asia-originated, publicly listed life insurance group globally. Founded in 2000, AIA Vietnam has built a solid foundation in the Vietnamese market over the past 24 years. Its total assets exceed VND 64 trillion, and its solvency ratio is 188%, surpassing statutory requirements. AIA Vietnam has established a network of nearly 200 offices across 53 provinces and cities nationwide. AIA Vietnam is also honoured to provide financial protection and security to nearly 1.6 million policyholders. As of October 2024, AIA Vietnam has fulfilled over 1 million claims for its policyholders, with a total payout exceeding VND 14 trillion.

About VCBS

Established in 2002, VCBS has been one of the leading securities companies in Vietnam for over 20 years. VCBS acts as the financial arm that is 100% owned by Joint Stock Commercial Bank for Foreign Trade of Vietnam, commonly known as Vietcombank, which is always among the top banks of Vietnam in terms of size and performance. VCBS is licensed to provide all securities-related products and services under the Vietnamese laws to both organization and individual clients. With a nationwide network and experienced experts, VCBS has been trusted and chosen by various onshore and offshore clients including state-owned companies, banks, insurance companies, securities companies, funds, etc.

About GGGI

The Global Green Growth Institute (GGGI) was founded as a treaty-based international, inter-governmental organization in 2012 at the United Nations Conference on Sustainable Development. GGGI supports its Member States in transitioning their economies toward a green growth model that simultaneously achieves poverty reduction, social inclusion, environmental sustainability, and economic growth. With 48 Member States and over 25 Partner countries and regional integration organizations in the process of accession, GGGI delivers programs and projects in over 51 countries. In Viet Nam, GGGI has been cooperating with various ministries since 2014 to provide comprehensive support to the Vietnamese Government including technical, financial, and capacity-building assistance in green growth promotion, supporting Viet Nam’s commitments towards achieving net-zero emissions by 2050.

About FiinRatings

FiinRatings Joint Stock Company, a technical collaboration partner of S&P Global Ratings, is a licensed credit rating agency in Vietnam. We offer a range of services, including credit ratings, green bond verification, and Second Party Opinion (SPO) assessments, catering to issuers, creditors, and investors across industries. Our SPO provides an independent evaluation of whether the documentation for a sustainable finance instrument, framework, or transaction aligns with established third-party principles, such as those set forth by the International Capital Market Association (ICMA) and the Climate Bonds Initiative (CBI). Notably, FiinRatings is the first agency in Vietnam to be approved as a verifier under the CBI’s green bond taxonomy.