TPBank secures $50M from DEG to expand green financing, SME lending

TPBank signed a five-year, US$50 million loan agreement with German development finance institution DEG on Oct. 20, allocating 60% of the funding to green projects and the remainder to small and medium-sized enterprises, particularly women-led businesses.

The financing will provide TPBank (Tien Phong Commercial Joint Stock Bank) with additional medium- and long-term U.S. dollar funding, diversify its international funding sources and support lending to environmentally sustainable projects and small and medium-sized enterprises (SMEs).

Under the agreement, $30 million will be allocated to eligible green projects, including initiatives supporting emissions reduction and the energy transition. The remaining $20 million will support SMEs, with particular emphasis on women-owned and women-led businesses.

The agreement also includes technical assistance from DEG, a subsidiary of Germany's KfW Group, to strengthen TPBank's Environmental and Social Risk Management System (ESMS). The program will cover internal policies, risk classification tools, credit appraisal procedures and monitoring practices, alongside specialized employee training.

These measures aim to improve the bank's ability to identify, assess and monitor environmental and social risks throughout the lending process and align its practices with international sustainability standards.

The transaction marks DEG's second investment in TPBank, following an earlier financing partnership focused on improving access to capital for women-owned businesses. The latest agreement expands their cooperation to include green financing and environmental and social risk management.

Monika Beck, a member of DEG's Management Board, said Vietnam remained a strategic market for the German development finance institution.

She described TPBank as a trusted partner, citing its commitment to governance, digital transformation and customer-focused growth. The $50 million facility represents the next step in their cooperation, she said, adding that the funding would support Vietnam's climate objectives and entrepreneurship.

Nguyen Hung, CEO of TPBank, said the partnership would help the bank increase medium- and long-term dollar funding, diversify its international capital structure and expand sustainable lending.

He added that the financing would improve access to capital for SMEs, particularly women-owned businesses, while helping the bank integrate environmental, social and governance (ESG) standards into its operations in support of Vietnam's net-zero emissions goal.

TPBank has previously secured a $220 million long-term loan from the U.S. International Development Finance Corporation and the Japan International Cooperation Agency. It has also participated in cooperation programs with the Asian Development Bank and the International Finance Corporation.

The latest financing is expected to further support TPBank's sustainable lending activities and provide Vietnamese businesses with capital for long-term growth.