The European Investment Bank (EIB) has granted a EUR 150 million loan to the Socialist Republic of Vietnam to finance the construction of a metro line project in Ho Chi Minh City. The finance contract was signed in Hanoi today by EIB Vice-President Magdalena Álvarez Arza, and the Vice Finance Minister of the Socialist Republic of Vietnam Tran Xuan Ha.
The EIB Vice-President highlighted that “the Bank is pleased to support this project as it will improve the quality of life of citizens by reducing congestion and daily commuting time as well as contributing to climate change mitigation by reducing traffic related emissions to the environment”.
The EUR 150 million operation is designed to finance the construction of metro Line 2 in Ho Chi Minh City, the largest city in Vietnam. The new metro line extends over 11.3 km and has 11 stations in the central area of the city. The project includes also the construction and equipment of a new depot well as the acquisition of new rolling stock to operate the line. The new metro line will directly benefit 140,000 daily passengers in the opening year. The operation is being co-financed by the Asian Development Bank and KfW.
The EIB supports the public transport system of Ho Chi Minh City to facilitate a reduction in transport-related pollutants emissions and fuel consumption with the aim to provide a more reliable, fast and environmentally friendly rail-based service along corridors currently served only by road-based modes. The project will make a significant contribution to improvement of the quality of life in Ho Chi Minh City by increasing mobility for many and by alleviating traffic congestion and providing a cleaner and quicker alternative to mopped and private cars.
The EIB is extending this loan in the context of the current lending mandate for Asia and Latin America (ALA IV). The project meets the mandate’s priority objectives of supporting the EU’s presence in the region and contributes to climate change mitigation.
Background:
The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Set up in 1958, the EIB operates in the 27 EU Member States and more than 130 other countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. Lending operations outside the EU are part of the EU’s cooperation policy with third countries.
Since 1993 the Bank has carried out four successive lending mandates for Asia and Latin America. Under the current mandate (ALA IV), covering the period 2007-2013, the EIB is authorised to lend up to EUR 3.8 billion for financing operations that contribute to climate change mitigation or support the EU presence in those regions through foreign direct investment or the transfer of technology and know-how. The EUR 3.8 billion regional ceiling is broken down into indicative sub-ceilings of EUR 1 billion for Asia and EUR 2.8 billion for Latin America.
Press contact:
Ministry of Finance of S.R of Vietnam: Department of Debt Management and External Finance, www.mof.gov.vn