Exchange of Notes concerning Yen Loans and Grant Aid to Viet Nam

June 6, 2017
Japanese

  1. 1. On June 6, Mr. Kunio Umeda, Japan’s Ambassador to the Socialist Republic of Viet Nam exchanged notes concerning four yen loan projects of up to 100.304 billion yen in total with H.E. Mr. Nguyen Chi Dung, Minister of Planning and Investment of Viet Nam and that of three grant aid projects of up to 2.928 billion yen in total with H.E. Mr. Nguyen Quoc Cuong, Ambassador Extraordinary and Plenipotentiary of Viet Nam to Japan, respectively, in the presence of Mr. Shinzo Abe, Prime Minister of Japan, and H.E. Mr. Nguyen Xuan Phuc, Prime Minister of Viet Nam in Tokyo.

    2.Overview of the projects

    (1) Yen loans

    (a) Hoa Lac Science and Technology City Development Project (II) (12.865 billion yen)
    This project is to develop the basic infrastructure for a science and technology base in the Hoa Lac area of Hanoi City, Viet Nam’s capital. This cooperation is expected to contribute to promoting Viet Nam’s economic growth and strengthening its international competitiveness by having more research and institutions in the area, and encouraging more private-sector investment.

    The terms of the loan are as follows:

    (1) Interest rate : 1.4% per annum (0.01% per annum for the consulting services)
    (2) Repayment period : 30 years (including a 10-year grace period)
    (3) Procurement terms : General untied

    (b) Maritime Security and Safety Capacity Improvement Project (38.482 billion yen)
    This project is to provide six patrol boats to the Viet Nam Coast Guard. This cooperation is expected to contribute to enhancing the capacity of the Viet Nam Coast Guard to appropriately implement coast guard activities such as sea rescues and maritime law enforcement in Viet Nam’s territorial waters, exclusive economic zone (EEZ) and so forth.

    The terms of the loan are as follows:

    (1) Interest rate : 0.1% per annum (0.01% per annum for the consulting services)
    (2) Repayment period : 40 years (including a 10-year grace period)
    (3) Procurement terms : Japan tied

    (c) Ben Tre Water Management Project (24.257 billion yen)
    This project is to develop salt water intrusion control facilities in Ben Tre Province in southern Viet Nam. This cooperation is expected to contribute to improving agricultural productivity through the supply of low-salinity agricultural water.

    The terms of the loan are as follows:

    (1) Interest rate : 0.3% per annum (0.01% per annum for the consulting services)
    (2) Repayment period : 40 years (including a 10-year grace period)
    (3) Procurement terms : General untied

    (d) Bien Hoa City Drainage and Wastewater Treatment Systems Project (Stage 1) (24.7 billion yen)
    This project is to develop sewage systems, including a sewage-treatment plant, inBien Hoa City, Dong Nai Province, southern Viet Nam. This cooperation is not only expected to improve Bien Hoa City’s sewage diffusion rate, but also to contribute to improving the water quality of Dong Nai River, which is the source of tap water for Ho Chi Minh City, and of small- and medium-sized rivers and waterways in Bien Hoa City.

    The terms of the loan are as follows:

    (1) Interest rate : 0.3% per annum (0.01% per annum for the consulting services)
    (2) Repayment period : 40 years (including a 10-year grace period)
    (3) Procurement terms : General untied
      

    (2) Grant aid

    (a) The Project for Human Resource Development Scholarship (Three-year cycle) (343 million yen)
    This project is to support young administrative officials who are expected to become leaders of Viet Nam to obtain (master’s) degrees at Japanese graduate schools. It is expected to contribute to strengthening bilateral relations by seeking to resolve Viet Nam’s development challenges and by establishing human networks.

    (b) The Project for Human Resource Development Scholarship (741 million yen)
    This project is to support young administrative officials who are expected to become leaders of Viet Nam to obtain (master’s and doctorate) degrees at Japanese graduate schools. It is expected to contribute to strengthening bilateral relations by seeking to resolve Viet Nam’s development challenges and by establishing human networks.

    (c) The Project for Emergency Reservoir Operation and Effective Flood Management Using Water-related Disaster Management Information System (1.844 billion yen)
    This project is to prepare hydrological observation equipment, dam management equipment and a water-related disaster management information system in the Huong River Basin, and to prepare display devices for a water-related disaster management information system at Hanoi’s Ministry of Agriculture and Rural Development, Department of Water Resource. It is expected to contribute to reducing flood damage in the Huong River Basin overall.

    [Reference]Japan-Viet Nam Relations (Basic Data)
    Viet Nam covers an area of 329,241 square kilometers (roughly the same as the area of Japan excluding Kyushu), and has a population of 90.73 million and a gross national income (GNI) per capita of 1,890 U.S. dollars (World Bank, 2015).