EV tech startup VinFast gets a $135 million climate financing package led by ADB to support electric mobility in Vietnam

While hundreds of tech companies were laying off thousands of their staff, Vietnam’s EV tech startup VinFast announced in August it was hiring 8,000 new employees to further ramp up production and meet the increasing demands for its electric cars.

Now, VinFast has just received a new capital infusion from The Asian Development Bank (ADB) to further support Vietnam’s efforts to achieve net-zero greenhouse gas emissions and expand the high-tech manufacturing industries.

Today, ADB announced it has led a $135 million climate financing package for VinFast Trading and Production Joint Stock Company (VinFast) for manufacturing Vietnam’s first fully-electric public transport bus fleet and first national electric vehicle (EV) charging network.

The climate financing, which comprises 7-year tenor financings, includes a $20 million loan funded by ADB, parallel loans of $87 million facilitated by ADB as mandated lead arranger, and concessional financing of up to $28 million. The new climate financing is also certified by the Climate Bonds Initiative, a scientifically-based standard for labeling bonds, loans, and other debt instruments which contribute to addressing climate change.

ADB has partially offset the project’s risks by utilizing concessional financing through its managed trust funds comprising loans from the Australian Climate Finance Partnership funded by the Australian Government (ACFP), the Clean Technology Fund (CTF), and a grant from the Climate Innovation and Development Fund, which is funded by Goldman Sachs and Bloomberg Philanthropies.

“This project delivers a high-impact, sustainable transport solution for Vietnam while helping it meet its climate goals and supporting the growth of climate finance in the region,” said ADB Private Sector Operations Department Director General Suzanne Gaboury. “Asia and the Pacific is the frontline of the global fight against climate change, and private sector projects like this one with innovative partners such as VinFast are crucial to help its countries decarbonize their economies.”

Vietnam’s transport sector accounts for 18% of annual greenhouse gas emissions, and its decarbonization, through options like e-mobility, will directly impact the country’s ambition to achieve net zero emissions by 2050.

VinFast is a subsidiary of Vingroup, Vietnam’s largest conglomerate founded by Vietnam’s richest man Phạm Nhật Vượng. The 5-year-old startup has partnered with leading automotive industry giants, including LG Chem, Gotion, Pininfarina, and ZF. Besides, VinFast’s team consists of alumni from several top automakers, including BMW, General Motors, Toyota, Hyundai, Porsche, Jaguar-Land Rover, and Volkswagen, among others.

Phạm Nhật Vượng, who made his first fortune in dried ramen noodles,  is a Vietnamese property developer and Vietnam’s first billionaire and richest person. He attended the Hanoi University of Mining and Geology before going to Russia to study at the Moscow Geological Prospecting Institute. He returned back to Vietnam to start the Vingroup.

We covered VinGroup last year after the company reported it was seeking to raise $1 billion in funding from BlackRock and Qatar’s sovereign fund for its electric cars.

Founded 29 years ago on August 8, 1993, Vingroup focuses on technology, industry, real estate development, retail, and services ranging from healthcare to hospitality. Four years ago, Vượng decided to start building and selling cars through the company’s automotive group called VinFast.