The International Finance Corporation ( IFC ), the private investment arm of the World Bank, is teaming up with South Korea’s LG Innotek, an e-mobility solutions provider and subsidiary of electronics manufacturer LG, in a landmark US$200 million investment to expand high-tech manufacturing in Vietnam, a move expected to create thousands of jobs, strengthen local supply chains and cement the country’s role as a rising force in the global electronics industry.

The financing will support the construction of LG Innotek Vietnam Hai Phong ( LGITVH )’s third factory in the northern port city of Hai Phong, where the Korean electronics maker already operates two large-scale plants employing more than 5,000 workers.

The new facility will expand production capacity for smartphone camera modules and transform LGITVH into a comprehensive manufacturing hub, positioning Vietnam as a higher-value player in global technology supply chains, notes the IFC – the largest global development institution focused on the private sector in emerging markets.

“The IFC’s loan will help enhance LG Innotek’s global business competitiveness as well as improve LGITVH’s production capacity and quality,” says Ji-hwan Park, LG Innotek’s CFO and senior vice-president. “By leveraging the IFC’s global network and expertise, we aim to expand ESG [environmental, social and governance]-compliant manufacturing capabilities and strengthen our position in the global market.”

Boosting value chain

Vietnam’s electrical and electronics sector, which accounts for around 40% of the export-driven economy’s exports and employs nearly one million people, has been a key driver of economic growth. Yet the industry remains heavily reliant on imported components, with most domestic operations focused on final assembly.

The IFC’s investment aims to change that dynamic by fostering greater localization of inputs, encouraging technology transfer and building a workforce skilled in advanced manufacturing

The deal, according to Carsten Mueller, the IFC’s regional industry director for manufacturing, agribusiness and services in Asia-Pacific, is expected to have ripple effects across Vietnam’s economy.

“This investment will fuel economic growth, create skilled jobs and enhance value addition and production complexity in the E&E [electrical and electronics products] industry,” Mueller notes. “Our sustainability-linked loan ( SLL ) aims to have a catalytic effect, attracting more lenders and manufacturers, fostering greener supply chains, and cultivating a workforce uniquely equipped to position Vietnam as a hub for sustainable, high-value production.”

Green finance for sustainable growth

The loan is structured as an SLL, which ties financing terms to LG Innotek’s ability to meet measurable environmental goals. LG Innotek has pledged to run all of its sites on 100% renewable electricity by 2030 and reach carbon neutrality by 2040.

The IFC will work with the company to design and implement the SLL framework, ensuring the Hai Phong expansion supports both industrial competitiveness and Vietnam’s climate commitments. For a country among the most vulnerable to climate change, such financial innovations are increasingly critical.

Beyond direct manufacturing jobs, the project is expected to generate employment opportunities in logistics, transport, packaging and other support services, helping to multiply the investment’s local impact.

The IFC’s collaboration with the LG Group dates back to the 1970s, when the development financier supported LG Electronics ( then known as Goldstar ) in South Korea, at a time when the country was itself still classified as an aid recipient. Since then, the IFC has worked with various LG entities to expand operations in emerging markets.

This latest partnership reflects both Vietnam’s strategic role in the global technology supply chain and the IFC’s mandate to promote sustainable private sector growth. In fiscal year 2025 alone, the financial institution has committed a record US$71.7 billion globally to private companies and financial institutions in developing countries.

With LG Innotek deepening its footprint and the IFC channelling green finance into Vietnam, the country’s ambitions to climb the technology ladder and establish itself as a centre for high-value manufacturing are gaining new momentum.