SOEs to get soft loans without government guarantees

Hano​i (VNA) – A conference is underway in Hanoi from March 15-18 to introduce soft loans from the French Development Agency (AFD) for state-owned enterprises (SOEs) that do not require government guarantees.

The event focuses on identifying ways to support feasible projects which are not able to get full funding from commercial loans.

In Vietnam, self-financed SOEs play a vital role in public services such as water supply, sanitation, power and public transportation. Therefore, they need support from financial institutions to get credit access without government guarantees, said Francoise Chalier, deputy director of the Asia department at AFD.

Chalier noted that eligible projects for AFD soft loans must be those that address sustainable development issues. They should be transparent and strictly follow the requirements of AFD’s bidding and contracting processes.

Dang Quyet Tien, Deputy Director of the Ministry of Finance’s Corporate Finance Department, presented the government’s legal framework on project appraisals and the provision of non-guaranteed loans to state-owned enterprises.

He stressed the responsibility of enterprises to report project status and credit solvency accurately.

The AFD has provided funds for 81 projects worth more than 6.1 billion EUR since it was launched in Vietnam in 1994.

Thanks to AFD funding, about 5 million family-scale farms were supported, 250,000 hectares of farmland were developed, 6,000 kilometres of inland roads were built or upgraded, and 3 million people now have sustainable access to clean water.

From 2016-2020, AFD will continue its partnership with Vietnam in enhancing urban development, supporting modernisation of the production sectors with a high socio-environmental impact, and mitigating climate change.-VNA