France will provide Vietnam with a loan of 20 million EUR to help Ho Chi Minh City achieve its socio-economic development objectives, meet the challenges of its urban growth and encourage measures to cope with climate change.

The financing agreement in favour of the urban development fund Ho Chi Minh Finance and Investment Company (HFIC) will be signed on May 5 between Vietnamese Finance Minister Vu Van Ninh, General Director of the French Development Agency (AFD) Dov Zerah, and French Ambassador to Vietnam Jean Francois Girault.

The programme, partially financed by AFD through HFIC will enable the building of social housing and educational institutions, as well as the reinforcement of capacity and care of hospitals, and the modernisation of waste collection and management.

The total cost of the programme comes to 96 million EUR. The AFD’s loan to the Vietnamese government, on-lent to HFIC, covers about 20 percent of the costs. Co-financing is provided by public (Government, municipality and companies) or private structures.

In 2006, AFD was the first investor to support HFIC, granting an initital credit line of 30 million EUR. This facility was designed in favour of social housing, with 10,000 people benefiting from new, quality housing as well as education, health and environment (treatment of solid waste stations) projects.

With this new finance agreement, the total accumulated net commitments of AFD for public official development assistance (ODA) in Vietnam will amount to about 1,050 billion EUR./.