A new financing package of $212.5 million (£162m) has been announced to support climate-friendly projects in Vietnam.

The funding from IFC, a member of the World Bank, will enable VPBank to expand its lending to small and medium businesses and boost financing for projects that help reduce carbon emissions.

Vietnam is said to be one of the most carbon intensive countries in the world regarding greenhouse gas emissions, ranking only after China and Mongolia in the East Asia and Pacific region.

According to an IFC study, while reducing emissions has been a national target to mitigate climate change impacts, it presents a $753 billion (£576bn) climate investment opportunity for Vietnam between 2016 and 2030.

Rosy Khanna, IFC Financial Institutions Group Director for Asia Pacific said: “Our loan to VPBank addresses IFC´s strategic objective of increasing financing for climate-smart initiatives to boost environmentally sustainable development in emerging markets with high potential of greenhouse gas emissions reduction such as Vietnam.

“Participation of regional and international lenders in this financing package shows the high interest of institutional and private investors in climate finance in Vietnam, facilitating a new source of capital while helping the country tackle climate change at the same time.”