Finance Ministry, BIDV sign 105 million USD loan

Hanoi (VNA) - The Ministry of Finance and the Bank for Investment and Development of Viet Nam (BIDV) signed a 105 million USD sub-loan in Hanoi on November 30.

The Vietnam Sustainable Agriculture Transformation project (vnSAT) project, which borrowed the total capital of 238 million USD from World Bank's preferential loan, aims to specifically support implementation of the new agenda in two sub-sectors including high value rice production for export in the Mekong Delta and coffee in the Central Highlands.

The Ministry of Agriculture and Rural Development has implemented the project while the BIDV was assigned to manage and disburse the loan under wholesale bank model.

The project would strengthen the ability of governmental agencies in research, design and transferring technologies to farmers, as well as implementing and supervising restructure, and renewal of the agricultural sector.

In addition, the project would provide direct support to around 140,000 households planting rice in eight provinces including Kien Giang, An Giang, Hau Giang, and Tien Giang, apart from Long An, Dong Thap, Can Tho and Soc Trang provinces, to access and apply advanced technologies.

The households would benefit from the project by being able to join the value chain from production to consumption. Their profits were expected to increase by 30 per cent per hectare, bringing the total additional value between 40 million USD and 60 million USD a year for the whole region.

In the Central Highlands region, around 63,000 farmer households in five provinces of Lam Dong, Dak Lak, Dak Nong, and Gia Lai, in addition to Kon Tum, would have access to technologies of sustainable coffee planting and re-planting, with expected additional income of 20 percent a year and 50 million USD for the region.

Tran Anh Thu, director of the BIDV's Branch 3 which would directly manage the loan, said the bank would provide preferential loans to businesses in the Mekong Delta to upgrade rice processing technologies and machines as well as to farmers in the Central Highlands to replant coffee trees.

"After completing the signing, the BIDV expects to disburse the capital from the beginning of the first quarter of 2016," Thu said.

This has been the fourth time when the ministry and the BIDV have signed sub-loans of international credit projects.

Previously, the bank received loans from three agricultural financial projects with total of 548 million USD from the WB.

The BIDV has safely managed and disbursed the loans and paid the principal, interest and commitment fees on time.

The bank disbursed 44 trillion VND (2.1 billion USD) for agricultural and rural development and lending to 1.7 million households of which 600,000 were poor and low income households. The loans also created 400,000 jobs for people in rural areas.

Regulations in the projects have also contributed to increasing people's awareness in rural areas to protect the environment when implementing their production plans.-VNA