Vietnam seeks European Investment Bank soft loans to advance development agenda

Vietnam is still a developing country with a low starting point and needs assistance in the form of preferential credit, Prime Minister Pham Minh Chinh told the European Investment Bank (EIB) Saturday.

In a meeting with EIB vice president Kris Peetersa at the bank's headquarters in Luxembourg, PM Chinh said the country needs resources, especially financial resources, to achieve the three strategic breakthroughs that it has targeted in terms of institutions, human resources and infrastructure.

The EIB has cooperated with Vietnam since 1996, supporting the development of metropolitan commercial areas, small hydroelectricity projects and urban transportation with a total investment of 561 million euros ($591.4 million) to date.

This year, EIB Global opened its office in Indonesia's Jakarta to reinforce and prioritise the bank’s financing for climate action, urban transport, healthcare, energy security and sustainable infrastructure projects in Southeast Asia.

PM Chinh said Vietnam wished to foster cooperation with the EIB in a more effective manner and on a larger scale, in such spheres as green development, climate change response, digital economy, and circular economy.

He proposed that the two sides redo their framework agreement on finance, which was signed in 1997 to make it match the current situation; and review and remove limitations to ensure the best use of EIB capital in Vietnam.

The Vietnamese leader requested the bank coordinates closely with Vietnam’s Ministry of Finance and relevant agencies to facilitate construction of Metro Line No. 3 in Hanoi and Metro Line No. 2 in Ho Chi Minh City.

Chinh also said the bank should continue to fund suitable projects in Vietnam in green development, digital economy, circular economy and climate change response.

He called on the EIB to adopt a more equal and balanced approach to Vietnam, considering it a developing country with a low starting point.

The PM pledged that his government would work harder to improve procedures and management processes towards making cooperation with the EIB more efficient and effective.

He also suggested the European bank stations representatives in Hanoi like the Word Bank, the Asian Development Bank, and other international institutions.

Peeters promised that the EIB would review the cooperation process to remove obstacles and limitations so that the bank and Vietnam could engage in more development projects.

Later, the Vietnamese PM witnessed the signing of a memorandum of understanding (MoU) between the EIB and state utility Vietnam Electricity (EVN) on supporting clean energy transition towards meeting Vietnam’s goal of carbon neutrality by 2050.

The MoU also covers the enabling of direct financing for power projects in Vietnam as well as strengthening partnerships in electricity generation, storage, transmission, distribution and sales.

After Luxembourg, the Vietnamese PM will visit the Netherlands and Belgium. He will join the EU-ASEAN Commemorative Summit in Belgium’s Brussels on December 14.