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JBIC PROVIDES ODA LOANS FOR THE SOCIALIST REPUBLIC OF VIETNAM
-To Support Sustainable Growth through Economic and Social Infrastructure Development-

Date March 29, 2002

1.Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) will sign today five ODA loan agreements totaling 67,510 million yen with the government of the Socialist Republic of Vietnam at its head office in Tokyo. The loans consist of a Special Yen (ODA) loan amounting to 22,768 million yen for the Tan Son Nhat International Airport Terminal Construction Project and four ODA loans amounting 44,742 million yen for four projects as regular ODA loan provision for FY2001. These include the O Mon Thermal Power Plant and Mekong Delta Transmission Network Project (II), the Hai Van Tunnel Construction Project (III), the Red River Bridge Construction Project (II) and the Saigon East-West Highway Construction Project (II). The signing will take place between Governor Kyosuke Shinozawa of JBIC and Ms. Le Thi Bang Tam, Vice Minister of Finance, representing Vietnam.

2.The Vietnamese government adopted reform policies known as Doi Moi in 1986 to shift the country's economic system to a market-oriented economy, and the economy achieved the growth rate of 8% per annum from 1992 to 1997. However, the 1997 Asian currency crisis forced the economy to slow down to 3.5% growth in 1998 and 4.8% in 1999. Since 2000, recovery has been underway, bolstered by an increase in industrial output. As a result, the economy grew 5.5% in 2000 and 5% growth is also projected for 2001. Despite such progress, Vietnam still has weak economic foundations compared to other ASEAN member countries, and it needs to step up economic structural reforms in the transition process to a market-oriented economy as well as the development of economic and social infrastructure. Under these circumstances, JBIC supports efforts by the Vietnamese government to implement economic structural reforms, while placing the focus of its lending operations on such areas as economic and social infrastructure development and rural development. These will reduce urban-rural disparities as well as poverty. It was in this context that one Special Yen (ODA) loan and four other ODA loans for FY2001 have been provided at this time.

3.The following is a brief description of these ODA loans.

(1) Special Yen (ODA) loan

The Tan Son Nhat International Airport Terminal Construction Project was selected for Special Yen loan financing in view of its effect on stimulating economic activity, creating employment and improving the investment climate in the private sector through more efficient freight handling. Also, it will benefit from tapping Japanese technical expertise. Specifically, the project requires (a) a construction method that makes the internal space of the passenger terminal effective in use; (b) a reliable electrical system; and (c) production and installation work of specialized facilities, including a baggage handling system and a flight information system. This loan will increase the passenger-handling capacity of the Tan Son Nhat International Airport, which is a terminus for southern Vietnam, provide better service and security for passengers using the airport facilities, and encourage human and freight movements. These will contribute to economic and social development.

(2) ODA loans for FY2001

Four projects for which ODA loans are being provided in FY2001 are the O Mon Thermal Power Plant and Mekong Delta Transmission Network Project (II), the Hai Van Tunnel Construction Project (III), the Red River Bridge Construction Project (II) and the Saigon East-West Highway Construction Project (II). These are continuing projects in the transport and power sectors, aiming at economic and social infrastructure development, a priority area JBIC designated in its ODA lending for Vietnam. They will thus contribute to the country's efforts to increase power supply capacity and boost traffic flow by developing transport infrastructure.

4.The loan amounts and terms of these loans are shown below.

Loan Amount and Conditions

(1)Special Yen (ODA) Loan

Project Name	Amount (yen mil.)	Interest Rate (%/year)			Repayment Period/ Grace Period (years)			Procurement
		Project	Consul-ting  service	Monitoring and Supervision	Project	Consul-ting  service	Monitoring and Supervision	Project	Consul-ting  service	Monitoring and Supervision
Tan Son Nhat International Airport Terminal Construction Project	22,768	0.95*	0.75**	0.75**	40/10	40/10	40/10	Japan Tied	Bilateral Tied	General Untied
Subtotal	22,768

(2) ODA Loans for FY2001

Project Name	Amount (yen mil.)	Interest Rate (%/year)		Repayment Period/ Grace Period (years)		Tying Status
		Project	Consulting Service	Project	Consulting Service	Project	Consulting Service
O Mon thermal Power Plant and Mekong Delta Transmission Network Project (II)	15,594	1.80	-	30/10	-	General Untied	-
Hai Van Tunnel Construction Project (III)	3,359	1.80	-	30/10	-	General Untied	-
Red River Bridge Construction Project (II)	14,863	1.80	-	30/10	-	General Untied	-
Saigon East-West Highway Construction Project	10,926	1.80	0.75**	30/10	40/10	General Untied	Bilateral Tied
Subtotal	44,742
Grand Total	67,510

     * Special Yen (ODA) Loan Rate

     **Special Environmental Interest Rate

(Source: Japan Bank for International Cooperation Online)

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