Vietnam’s enterprises behind Asian peers in securing ADB loans

• Vietnam unlikely to receive concessional loans from ADB in a few years
• Vietnam’s GDP growth to slow next year: ADB
• Vietnam asks ADB for financial support in fighting drought and salinity

ADB is widely known for its public sector (sovereign) financing to developing member countries’ governments and public sector entities, such as state-owned enterprises. But it also provides direct financial assistance to private sector projects.

The bank has already financed several projects in a number of countries in Asia, such as China, Thailand and Myanmar, but has not received project applications from the private sector in Vietnam, ADB President Takehiko Nakao told a press briefing in Hanoi on June 17.

“In Vietnam, we also want to do that [private lending]. There is no obstacle to that. But right now we have not received [funding] applications [from Vietnam’s private sector],” the ADB President said.

ADB President Takehiko Nakao (R) at the press briefing in Hanoi on June 17. Photo by Reuters/Kham

For Vietnam, ADB pledges to increase private sector lending and equity investments, especially in finance, agri-business and infrastructure but it can also be expanded to other sectors.

Meanwhile, in China, ADB is extending an up to $75 million equivalent loan to Yingda International Leasing, a Sino-foreign joint venture company, which will allow it to expand badly-needed funding for healthcare equipment and facilities at hospitals in the central and western regions of the People’s Republic of China, ADB said in January 2016.

In Thailand, ADB has signed an agreement to provide a local currency loan of up to Baht 1.81 billion ($55 million) and a $30 million loan from the ADB-administered Clean Technology Fund to Chaiyaphum Wind Farm Company Limited to develop a wind power plant in Thailand. Christopher Thieme, Director with ADB’s Private Sector Operations Department said in January this year the project will help accelerate and expand private investment in clean energy infrastructure in the kingdom.

Even in Myanmar, which has just opened their door to the world for a number of years, ADB and the International Finance Corporation (IFC), a member of the World Bank Group, are extending a loan of $150 million each to Ooredoo Myanmar, a fully owned subsidiary of Qatar-based Ooredoo Q.S.C, to expand a nationwide “greenfield” mobile telecom network using advanced 3G technology.

According to the bank, to be eligible for ADB nonsovereign financing, the proposed recipient must be: an entity wholly owned or controlled by one or more private entities; an entity, wholly owned or controlled by a sovereign, undertaking commercial activities (subsovereign and other public sector entities); an entity, partially owned or controlled by one or more private entities and a sovereign, undertaking commercial activities; or a local government or other subsovereign entity (including municipalities and other forms of local government) that can contract and obtain financing independently from the sovereign.

Related news:

> Vietnam unlikely to receive concessional loans from ADB in a few years

> Vietnam’s GDP growth to slow next year: ADB

> Vietnam asks ADB for financial support in fighting drought and salinity