EIB lends EUR 100 million to mitigate climate change in Vietnam

The European Investment Bank (EIB) is providing a EUR 100 million loan for Vietnam to finance investments that will contribute to the mitigation of climate change in the country.

The loan agreement was signed in Hanoi today by Francisco de Paula Coelho, EIB Director for Lending Operations in Asia and Tran Xuan Ha, Deputy Minister of Finance.

Accordingly, the ministry will make available the proceeds of the EIB’s framework loan to four State-owned banks, who will on-lend the funds to final beneficiaries carrying out investments that contribute to one of the following objectives: mitigating climate change through projects in the renewable energy and energy efficiency sectors, which would account for at least 70% of the loan amount or supporting European presence in Vietnam through direct investment or transfers of technology and know-how from Europe, which would account for up to 30% of the loan.

The EIB director said that both objectives were set in the EU Mandate to lend in Asia and Latin America.

He praised the co-operation of Vietnam’s Ministry of Finance and stressed: “The framework loan will make long-term loans at attractive interest rates available to support renewable energy and energy efficiency projects, a priority for the Bank’s lending”.

Addressing the signing ceremony, Deputy Minister Tran Xuan Ha emphasised that the loan also showed the EIB’s confidence in Vietnam’s economic development.

This is the EIB’s second lending operation with the Ministry of Finance, which received a EUR 30 million credit line in 2005 for financing small and medium scale projects. The line was also allocated through intermediary banks, including Agribank and BIDV.

The EIB started operations in Vietnam in 1996.

The four State-owned banks include the Vietnam Development Bank (VDB), the Vietnam Bank for Agriculture and Rural Development (Agribank), the Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Bank for Industry and Trade (Vietinbank).

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