Prime Minister asks EIB for preferential loans

By Hoang Thuy   December 10, 2022 | 09:14 pm PT
Prime Minister asks EIB for preferential loans
Prime Minister Pham Minh Chinh at a meeting with the European Investment Bank (EIB) in Luxembourg, December 10, 2022. Photo by Nhat Bac
During an official visit to Luxembourg on Saturday, Prime Minister Pham Minh Chinh requested the European Investment Bank (EIB) give Vietnam preferential loans to help the country develop its economy.

The prime minister pointed out that EIB has had relations with Vietnam for the past 25 years and that it had cooperated with Vietnam on seven projects with a total investment of $561 million. The EIB is the lending arm of the European Union, the biggest multilateral financial institution in the world and one of the largest providers of climate finance.

Vietnam is currently focused on strategic breakthroughs regarding institutions, infrastructure and human resources, and so it will require a large amount of funding to realize its goals, Chinh said. Besides its existing sources of capital, Vietnam also needs outside funding in the form of investor capital, FDI and loans. As loans must be done in accordance with bank policies, Chinh said he hoped to bolster cooperation with the EIB on a larger scale.

"I hope that in the future, there will be a quicker and more effective development of projects regarding sectors that the bank prioritizes and for which Vietnam has needs, such as fighting climate change and the circular economy," Chinh said.

The Vietnamese leader said he hoped both sides would renew the financial cooperation agreement that was signed in 1997. Chinh said further that Vietnam would send its Minister of Finance to work with the EIB and other financial institutions in Luxembourg.

As Vietnam is a developing country and in a state of transition, Chinh said he hoped the EIB would provide Vietnam with preferential loans and interest rates. He added that Vietnam's financial authorities would continue negotiations with the bank regarding technical issues before the signing of a future protocol.

Chinh also requested the EIB to station representatives in Hanoi, similar to other financial institutions, such as the Word Bank and the Asian Development Bank.

European Commission Director of Finance Peteris Ustubs said the EIB has been cooperating closely with Vietnam regarding energy transition in order to increase investments in green growth projects. He said the bank and Vietnam Electricity (EVN), the largest power company in the country, would sign an agreement to bolster the relationship between the EU and Vietnam, as well as support Vietnam's commitment to net zero emissions by 2050.

Markus Berndt, deputy managing director of EIB Global, said the bank's priorities are similar to that of Vietnam, including fighting climate change, improving the infrastructure for a digital economy, as well as the circular economy.

The EIB will cooperate with the EU to bolster policy mechanisms and simplify procedures to speed up lending, he added.

Chinh began his official visit to Luxembourg on December 9. He will also visit the Netherlands and Belgium, as well as attend a summit in Belgium on December 14 to commemorate 45 years of ASEAN-EU relations.

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