Japan pledges $820 million loan to support Ho Chi Minh City metro project

By An Hong   May 31, 2016 | 11:37 am GMT+7

Japanese Prime Minister Shinzo Abe pledged 90.1 billion yen ($820 million) in loans for Ho Chi Minh City's metro project at a meeting on Saturday with Vietnamese Prime Minister Nguyen Xuan Phuc.

The government news website reported that Japan has agreed to provide Vietnam four loans in official development assistance worth 166 billion yen in total.

This latest tranche included 54.9 billion yen ($500 million) for the Thai Binh thermal power plant, 20.96 billion yen ($191 million) to improve the water system in Ho Chi Minh City and 90.17 billion yen ($820 million) for the metro project.

Vietnamese Prime Minister Nguyen Xuan Phuc, left, at a press conference with his Japanese counterpart, Shinzo Abe, after their talks in Tokyo on Saturday. Photo by VGP/ Quang Hieu

Vietnamese Prime Minister Nguyen Xuan Phuc (L) at a press conference with his Japanese counterpart, Shinzo Abe, after their talks in Tokyo on Saturday. Photo by VGP/ Quang Hieu

After their meeting, Vietnamese Prime Minister Phuc said he "wants to take relations between the two countries to the next level."

Abe expressed his support for Vietnam in its fight against the prolonged drought and salinity.

The natural disaster has cost the Southeast Asian country about $287 million in the first four months of this year. The drought, accompanied with extensive saltwater intrusion, has badly affected nearly 140,000 hectares in the southern Mekong Delta food basket.

Abe also promised 300 million yen ($2.5 million) in emergency grants.

Earlier this year, Japan lent Vietnam 95 billion yen for major infrastructure projects. The loan was the first tranche of the 300 billion yen loan that Japan pledged for Vietnam in the 2015 fiscal year.

Yen loans are usually repayable over 30-40 years with a 10-year grace period.

Japan is by far the biggest aid donor to Vietnam.