Vietnam, France Sign MoU on Financing Non-sovereign Projects

The signing of a memorandum of Understanding (MoU) on the development of the non-sovereign financing activities of the French Development Agency AFD in Vietnam took place in Hanoi on May 22, 2014. The MoU is signed by Nguyen Van Trung, Vietnamese Deputy Minister of Planning and Investment (MPI), and Mr Rémi GENEVEY, Director of AFD.

 

Mr Yvon Collin, French Senator and member of AFD’s Board of Directors, attended the ceremony.

 

This MoU sets out the procedure governing the implementation of AFD’s non-sovereign financing in Vietnam, which include grants and direct loans granted by AFD at its own risk to eligible Vietnamese companies and organisations, without sovereign financial guarantee from Vietnam. AFD is currently the only development agency to provide this type of financing in Vietnam.

 

The signing of this MoU is in line with the choice of France to maintain a high level of ODA to Vietnam with the mobilisation of its most innovative funding instruments.

These non-sovereign operations will finance investments compliant with the priorities of the Vietnamese Government in areas of vital interest to the general development of the country, particularly in the area of ​​infrastructure development, without increasing government debt.

 

AFD granted in 2010 on a pilot basis its first non-sovereign loan of US$100 million to Electricity of Vietnam (EVN) for the construction of Huoi Quang dam. With the new framework established by this MoU, AFD is planning to finance four new non-sovereign projects in 2014 with a total funding of €113 million.

 

AFD is the lead agency and operator of France’s ODA, and is active in Vietnam since 1994. Cumulative ODA commitments of AFD to Vietnam amount to €1.5 billion for 76 projects. AFD’s annual pledge authorisations in Vietnam stand at a yearly average of €100 million over the last five years.