The Vietnamese Ministry of Finance and the French Development Agency (AFD) on May 5 signed a loan agreement worth 20 million EUR, to finance a socio-economic development project in the southern city of Ho Chi Minh .

The project is part of cooperative activities between France and Vietnam .

Speaking at the signing ceremony, Minister of Finance Vu Van Ninh said that the project would help to build social housing and education institutes, reinforce hospitals’ capacity in receipting and caring for patients and modernise waste collection and management.

The total cost of the programme is 96 million EUR, with AFD to provide partial finance, estimated at 20 percent of the total, through the Ho Chi Minh Finance and Investment Company (HFIC), the first investment fund established in Vietnam to finance medium-scale urban infrastructure projects.

AFD was the first sponsor of HFIC, through aid worth 30 million EUR in 2006. The funding was disbursed to social housing projects and education, health care and environment projects.

Along with the loan, AFD also granted a 1.5 million EUR non-refundable aid aimed at enhancing HFIC’s capacities in managing finance, as well as assessing the environment and society.

With the financing agreement, the total (official development assistance (ODA)) commitment of AFD to Vietnam amounted to almost 1.050 billion EUR./.