EIB loan to mitigate climate change in Vietnam
- Release date: 26 May 2009
- Reference: 2009-091-EN
The European Investment Bank (EIB) is providing EUR 100 million to the Socialist Republic of Vietnam with the main purpose of part-financing investments that will contribute to the mitigation of climate change. Mr Francisco de Paula Coelho, EIB Director for Lending Operations in Asia, and Mr Tran Xuan Ha, Deputy Minister of Finance, signed the loan agreement today in Hanoi.
Mr de Paula Coelho praised “the cooperation of Vietnam’s Ministry of Finance” and stressed that “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”.
The Ministry of Finance 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 (a) contribute to climate change mitigation, through renewable energy or energy efficiency projects, which will account for at least 70% of the loan amount, or (b) support the European presence in Vietnam, through direct investment or transfers of technology and know-how from Europe, which will account for up to 30% of the loan. Both objectives are laid down in the EU Mandate for lending in Asia and Latin America (ALA).
Interested promoters should address their requests to one of the four intermediary banks, which cover different areas of the Vietnamese economy: 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).
This is the EIB’s fifth operation in Vietnam, where it started operations in 1996. It is also the 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; this credit line was also allocated through intermediary banks, including Agribank and BIDV.
The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Set up in 1958, the EIB operates in the 27 EU Member States and more than 130 other countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. Lending operations outside the EU are part of the EU’s cooperation policy with third countries.
Since 1993 the Bank has carried out four successive lending mandates for Asia and Latin America. Under the current mandate (ALA IV), covering the period 2007-2013, the EIB is authorised to lend up to EUR 3.8 billion for financing operations that contribute to climate change mitigation or support the EU presence in those regions through foreign direct investment, transfer of technology and know-how. The EUR 3.8 billion regional ceiling is broken down into indicative sub-ceilings of EUR 1 billion for Asia and EUR 2.8 billion for Latin America.