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Press Releases

PR2000-61
March 30, 2001

Overseas Economic Cooperation Operation

JBIC EXTENDS ODA LOANS TO VIETNAM
--To Improve the Quality of Life with Sanitation Project in Urban Areas--

  • 1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed seven loan agreements with the Government of the Socialist Republic of Vietnam on March 30, 2001. Of these, one, in the amount of up to 24.847 billion yen, is for a Special Yen (ODA) Loan and the other six, in the aggregate amount of 46.057 billion yen, are for ODA loan package (Project) of FY2000. The grand total of these loans amounts to 70.94 billion yen. The signing took place at its head office between Governor Hiroshi Yasuda and Vice Minister of Finance Le Thi Bang Tam of Vietnam. This brings the cumulative ODA loan commitments to Vietnam to 678.559 billion yen for 72 projects.
  • 2. Vietnam has been pushing forward the transition to a market economy by Doi Moi (renovation) since 1986, and its economy grew more than 8% annually from 1992 to 1997. However, the onset of the Asian currency crisis in 1997 dragged the economy down to a 3.5% growth in 1998 and 4.8% in 1999. Economic growth is projected to be in the 6% range in 2000 due, among others, to an increase in industrial production. However, the economic foundations of Vietnam are fragile compared with those of the ASEAN member countries. Thus there is the need to develop its economic and social infrastructure, while the country is undertaking economic structural reforms in the process of transition to a market economy. From this perspective, in supporting economic structural reforms in Vietnam, JBIC has designated priority to the following: development of economic and social infrastructure, rural development to reduce regional disparities and poverty, and human resources development and institution building to facilitate the transition to a market economy. The present Special Yen Loan and ODA loan package (Project) of FY2000 are based on this lending policy.
  • 3. Brief Description of Loans
    (1) Special Yen (ODA) Loan
    The loan for the Cuu Long (Can Tho) Bridge Construction Project was provided, giving due consideration to a boosting effect on the economy, employment creation and improving the environment for private investment through increasing the efficiency of the transport and distribution sectors, thereby bringing a speedy recovery of the Vietnamese economy. The Project was specifically earmarked for a Special Yen Loan because this sector is where the Japanese technology may be effectively used, contributing to freight transport in the southern region.
    (2) ODA Loans Package of FY2000
    The six projects for which the ODA loan package (Project) of FY2000, including those for the Phu My-Ho Chi Minh City 500 kV Transmission Line Project and the Ho Chi Minh City Water Environment Improvement Project (I), are priority areas for ODA loans to Vietnam, promoting "development of economic and social infrastructure, rural development to reduce regional disparities and poverty, and human resources development and institution building to facilitate the transition to a market economy."

Loan Amount and Conditions

(1) Special Yen Loan

Project NameAmount (Mil. yen)Interest Rate (%, per annum)Repayment Period/ Grace Period (years)Tying Status
Goods and ServicesAuditGoods and ServicesAuditGoods and ServicesAudit
Cuu Long (Can Tho) Bridge Construction Project24,8470.95*0.95*40/1040/10TiedGeneral Untied
Subtotal24,847 

(2) ODA Loans for Fiscal 2000

Project NameAmount (Mil. yen)Interest Rate (%, per annum)Repayment Period/ Grace Period (years)Tying Status
Goods and ServicesConsulting ServicesGoods and ServicesConsulting ServicesGoods and ServicesConsulting Services
Phu My-Ho Chi Minh City 500kV Transmission Line Project13,1271.800.75**30/1040/10General UntiedBilateral Tied
Dai Ninh Hydropower Project (II)10,0000.75** - 40/10 - Bilateral Tied -
O Mon Thermal Power Plant and Mekong Delta Transmission Network Project (I)5,9001.800.75**30/1040/10General UntiedBilateral Tied
Phan Ri - Phan Thiet Irrigation Project (E/S)437 - 0.75** - 40/10 - Bilateral Tied
Ho Chi Minh City Water Environment Improvement Project (I)8,2001.30***

0.75**

0.75**30/10

40/10

40/10General Untied

Bilateral Tied

Bilateral Tied
National Highway No.1 Bypass Road Construction Project8,3931.800.75**30/1040/10General UntiedBilateral Tied
Subtotal46,057
Grand Total70,904

* Special Yen Loan interest rate
** Special Environmental Project interest rate
*** Ordinary Environmental Project interest rate
(Special Environmental Project interest rate was applied to the sewerage facility portion of the Ho Chi Minh City Water Environment Project (I).)

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