Int’l lenders offer Vietnam 4% interest loan to build Long Thanh airport

Several international lenders are offering Vietnam Airport Corporation loans with an interest rate of 4% a year to build Long Thanh airport, Dau Tu newspaper cited the corporation’s CEO Vu The Phiet.

The corporation which was assigned to invest in the $16-billion airport project received offers from several major financial institutions in the world. The loan offered with interest rate at 4% per year, 1 to 2% lower than previous offers it received before the COVID-19 pandemic happened.

"Taking advantage of this redundant international capital with low-interest rate to speed up the project construction, the total investment could be significantly reduced," advised CEO Phiet.

Work on the first phase of the mega project is expected to begin in April 2021 and to be complete in 2025, creating a facility with a capacity of 25 million passengers a year.

Last year, ACV worked with 12 domestic and foreign credit institutions and signed agreements with a total proposed value of over $5 billion with an interest rate of 5.5 - 6% per year.

Sweden’s Export Credit Corporation also offered to loan Vietnam $1 billion towards the $4.8 billion cost of the airport’s first phase, on condition that 30% of it is spent on Swedish technology and equipment, reports business news portal Scandasia. The credit institution proposed the loan with an interest rate of 4.2% a year.

By assigning ACV as an investor of the project, Vietnam could retain business profits from the airport create job opportunities for Vietnamese people. In case of choosing a public-private partnership investment form, international bidding will be conducted to select strong investors.

The Government, on February 3, issued a resolution on the feasibility study of the Long Thanh Airport project (phase 1) which asked the State Appraisal Council to complete the appraisal of the project’s feasibility study report to submit to the Government for consideration in March.

The resolution also included the decision to adjust the land area of the first phase of the project from 1,165ha to 1,810ha.

The People’s Committee of Dong Nai province is assigned to focus on directing the compensation and resettlement of affected people to hand over the cleared land to the investor according to the schedule.

Long Thanh Airport is scheduled to have a total investment of approximately $16 billion. The first phase of the airport is estimated to cost roughly $4.77 billion.