Global Issues & ODA
Exchange of Notes concerning Three Yen Loan Projects to Vietnam
(Intended to Contribute to “Economic Recovery in the Post-COVID-19 Phase,” “Alleviating Traffic Congestion” and “Improving Productivity of Major Crops” in Vietnam)
(Photo: Cabinet Public Affairs Office)
On May 21, during a Japan-Vietnam Summit Meeting held on the sidelines of the G7 Hiroshima Summit, in the presence Mr. KISHIDA Fumio, Prime Minister of Japan, and H.E. Mr. PHAM Minh Chinh, Prime Minister of the Socialist Republic of Viet Nam, an exchange of notes was held between Mr. HAYASHI Yoshimasa, Minister for Foreign Affairs of Japan, and H.E. Mr. Ho Duc Phoc, Minister of Finance of the Socialist Republic of Viet Nam, concerning three yen loan projects [see notes] totaling up to 60.983 billion yen.
(Note) Yen loan: Cooperation in the form of loans to developing countries for the development of infrastructure and other financial needs under moderate conditions (low interest rates and long repayment periods). As funds are subject to repayment to Japan, developing countries are expected to make effective use of them and to develop themselves on a more self-sustainable basis.
- Overview of the projects
- COVID-19 Response Support Loan (loan provision up to 50 billion yen)
This yen loan aims to provide financial assistance to the Government of Vietnam to help alleviate the burden on the livelihoods affected by the spread of the COVID-19, thereby contributing to the promotion of economic and social stability and development efforts in the country. - Public Transport Infrastructure Improvement Project in Binh Duong Province (loan provision up to 6.244 billion yen)
This project aims to respond to the increasing traffic demand in Binh Duong Province and improve its connectivity with Ho Chi Minh City by constructing flyovers, median strips and other facilities on the arterial road (My Phuoc-Tan Van Road) connecting Binh Duong New City and Suoi Tien Terminal Station in Binh Duong Province, located adjacent to Ho Chi Minh City, thereby contributing to the economic development of the Ho Chi Minh City metropolitan area. - Project for Upgrading Infrastructure for Agricultural Development in Lam Dong Province (Phase 1) (loan provision up to 4.739 billion yen)
This project aims to increase the productivity of major crops and to improve shipping logistics in Lam Dong Province by providing assistance for the development of roads, irrigation facilities and other basic agricultural infrastructure, thereby contributing to building food value chains, adding higher value to agricultural products and strengthening international competitiveness.
- Loan terms
- Project 1 (1)
Interest rate: 0.01% per annum
Repayment period: 15 years (including a 4-year grace period)
Procurement terms: General untied - Projects 1 (2) and (3)
Interest rate: 1.15% per annum (0.01% per annum for the consulting service portion)
Repaymenet period: 30 years (including a 10-year grace period)
Procurement terms: General untied
The Socialist Republic of Viet Nam has an area of 329,241 square kilometers (approximately the same as the area of Japan excluding Kyushu), a population of about 99.46 million (General Department of Statistics of Vietnam, 2022) and a per capita gross national income (GNI) of 3,560 US dollars (World Bank, 2021).