Vietnam, Japan advance new-generation ODA loan to accelerate green transition

Policies in Action

Vietnam, Japan advance new-generation ODA loan to accelerate green transition
The programme loan is viewed as a next-generation ODA model, designed with simplified preparation processes, accelerated disbursement mechanism, and closer alignment with policy reforms and resource mobilisation for sustainable development.
Deputy Minister of Finance Tran Quoc Phuong (left) and Japanese Ambassador to Vietnam Ito Naoki at the seminar (Photo: VNA)

Hanoi (VNA) – Japan is set to extend a new-generation official development assistance (ODA) loan worth 50 billion JPY (around 320 million USD) to Vietnam, featuring streamlined procedures and faster disbursement to support the country’s green transition efforts.

Expected to be signed in March 2026, the agreement will represent the second budget-support loan provided by the Japanese Government for Vietnam since 2023.

The programme loan is viewed as a next-generation ODA model, designed with simplified preparation processes, accelerated disbursement mechanism, and closer alignment with policy reforms and resource mobilisation for sustainable development.

Addressing a seminar on the programme loan for green transformation toward green growth and climate resilience on March 18, Japanese Ambassador to Vietnam Ito Naoki highlighted that the loan demonstrates Japan’s strong commitment to assisting Vietnam in advancing green growth, implementing its Nationally Determined Contributions (NDCs), and strengthening resilience to climate change and natural disasters.

He noted that the initiative moves beyond conventional lending by encouraging the application of advanced Japanese technologies, including artificial intelligence (AI) and satellite-based monitoring data, to support Vietnam’s green transition and disaster risk management. It is regarded as a new cooperation framework for Japan’s ODA deployment.

Japanese Ambassador to Vietnam Ito Naoki speaks at the seminar. (Photo: VNA)

Vietnamese Deputy Minister of Finance Tran Quoc Phuong said the loan is structured around three key pillars. The first focuses on developing and refining financial and investment incentive policies to promote wider participation in green transition areas, including carbon credit and green bond marketes. The second supports the drafting and implementation of policies linked to Vietnam’s NDC commitments. The third aims to enhance climate adaptation measures and strengthen disaster resilience and recovery capacity as Vietnam remains highly vulnerable to sea-level rise and extreme weather events.

Japan’s extensive experience in green transition and disaster risk management will help bolster Vietnam’s long-term response capacity through cooperation under the programme, Phuong noted.

The seminar, jointly organised by the Ministry of Finance and the Japan International Cooperation Agency (JICA), introduced the green transition budget-support programme and discussed policy measures supporting Vietnam’s national green growth strategy for 2021–2030, with a vision towards 2050.

At the 26th United Nations Climate Change Conference (COP26), Prime Minister Pham Minh Chinh pledged that Vietnam would achieve net-zero emissions by 2050. Since then, the country has continued refining its legal and policy frameworks to realise this commitment.

Through cooperation initiatives, including those supported by JICA, Japan has maintained active assistance for Vietnam’s green transition. JICA is currently implementing multiple technical cooperation projects covering forest conservation, disaster risk reduction, NDC implementation, and circular economy development.

During the seminar, Japanese enterprises also shared expertise, technologies, and solutions related to green transition and climate adaptation, opening up new opportunities for cooperation between government bodies and business communities of the two countries in the period ahead./.

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