Green and Circular Projects May Receive 2% Interest Rate Support

Vietnam has introduced a formal framework for identifying green projects, projects meeting circular economy criteria, and businesses applying environmental, social and governance (ESG) standards. The framework provides a basis for eligible enterprises, household businesses and individual businesses to access a 2% annual interest rate support policy for loans used to implement qualifying projects.

On September 17, 2026, the Prime Minister issued Decision No. 46/2026/QD-TTg, providing guidelines for identifying green projects, projects meeting circular economy criteria, and the application of ESG standards. The decision will take effect on November 1, 2026. It was issued to implement the 2% annual interest rate support mechanism stipulated under Resolution No. 198/2025/QH15 for enterprises in the private economic sector, household businesses and individual businesses borrowing capital to implement green or circular projects or apply ESG standards.

Under Decision 46, the list of green projects comprises 45 types of projects across seven sectors. These include 10 types in the energy sector, three in transportation, two in construction, three in water resources, 12 in agriculture, forestry, fisheries and biodiversity conservation, six in manufacturing and processing, and nine in environmental services.

In transportation, projects involving vehicles with zero emissions or low carbon emissions, using electricity, green energy or other low-emission energy sources, are included among the green projects eligible for consideration. Projects developing infrastructure for energy supply, low-emission fuels or recharging and refueling services for low-emission vehicles are also covered.

In manufacturing and processing, the list includes projects producing energy-efficient equipment, components and electronic equipment serving low-carbon technologies, low-carbon transportation vehicles and environmentally friendly packaging. Projects must meet the relevant technical requirements, standards or certification requirements applicable to each project category.

Another notable category covers waste recycling and resource recovery projects. Under the regulations, recycling projects must meet the recycling rates prescribed under the extended producer responsibility framework for manufacturers and importers. Recycling technologies and processes must also comply with requirements under environmental protection regulations. This provides a clearer basis for connecting waste collection, sorting and recycling activities with financing mechanisms supporting the circular economy.

Alongside the green project list, Decision 46 identifies projects that meet circular economy criteria, including circular design and production, circular use, resource recovery, industrial symbiosis and circular linkages. Activities such as reuse, repair, refurbishment, remanufacturing, collection and recycling of by-products and waste are included when they meet the applicable requirements.

In agriculture, projects involving rice, cassava, sugarcane and other agricultural activities that implement greenhouse gas reduction measures and collect and recycle agricultural by-products may be assessed under the circular economy criteria. In the industrial sector, plastic recycling, textile recycling, construction material recycling and eco-industrial park development are also included among the activities subject to circular economy assessment.

An important new requirement is that businesses cannot independently declare a project to be green or circular in order to access the support policy. The determination must be carried out by an independent assessment organization that meets requirements on legal status and assessment capacity under standards such as ISO/IEC 17029 or ISAE 3000. Once a project has been assessed, the enterprise must maintain compliance with the relevant criteria throughout its operations and notify the provincial-level People’s Committee within 30 days from the date the determination document is issued.

Decision 46 also incorporates ESG into the same framework as green and circular projects. Enterprises must prepare an ESG implementation report covering mandatory environmental, social and governance criteria, while also selecting additional voluntary criteria according to their size. Household businesses and individual businesses must select at least three voluntary criteria; micro and small enterprises at least six; medium-sized enterprises at least 12; and large enterprises at least 18.

The determination of a project as green or circular, together with the ESG report, provides a basis for consideration of interest rate support under the relevant regulations. However, meeting these criteria does not automatically mean that a business will receive financing or qualify for the interest support, as loans must also satisfy applicable credit conditions and other relevant regulations.

Policy Strengthens the Link Between Financing and the Green Transition

The standardization of green and circular project criteria comes as green financing in Vietnam continues to expand. According to FiinRatings, green credit outstanding reached approximately VND780 trillion at the end of 2025, up nearly 15% year on year and accounting for around 4.2% of total outstanding credit in the economy. Renewable and clean energy accounted for the largest share, followed by green agriculture.

FiinRatings said that standardizing the green project framework helps clarify the criteria applicable to issuers and lenders. At the same time, the 2% interest rate support mechanism is considered a fiscal tool that can help reduce financing costs for qualifying projects. According to the organization, Vietnam will require approximately US$368 billion in green and transition finance through 2040, with nearly half expected to come from the private sector.

However, FiinRatings also noted that businesses and investors should not assume that a green label will automatically result in lower interest rates in every case. In Vietnam’s green bond market, the direct financing-cost advantage commonly referred to as a “greenium” has not yet emerged consistently. According to the organization’s assessment, the more visible benefits at the current stage include access to a broader investor base, improvements in corporate governance and greater access to institutional investors with ESG requirements.

For manufacturing companies, this means that the transition toward greener and more circular business models is increasingly linked to requirements for data, standards and the ability to demonstrate measurable results. Recycling, resource recovery, the use of recycled materials, energy efficiency and emissions reduction projects will increasingly be assessed not only on their environmental objectives but also on governance, labor and disclosure requirements.

Decision No. 46/2026/QD-TTg will take effect on November 1, 2026. Under the regulations, provincial-level People’s Committees are responsible for monitoring, updating and publishing lists of green projects, projects meeting circular economy criteria and projects applying ESG standards on their official portals twice a year, on June 30 and December 31. The State Bank of Vietnam is responsible for providing guidance to commercial banks on implementing the relevant interest rate support mechanisms.

Source: CafeF and compiled from the internet.