HCMC – International Finance Corporation (IFC), a member of the World Bank Group, offered a financial package of US$75 million to Phu My Hung Development Corporation to help sustain its operations following the Covid-19 pandemic and allow it to extend financial relief to its clients, suppliers and contractors along its property value chain, thus helping preserve jobs and contributing to a resilient local economy.
Phu My Hung is an established real estate developer in Vietnam that deals with housing units mainly in HCMC and also leases office and retail space to more than 300 businesses, most of which are of small and medium size.
Business disruptions, caused by the fallout from the coronavirus pandemic, have affected the real estate developer’s clients, including lessees, homebuyers, suppliers and contractors.
“Local businesses are the primary engines of job creation, which drive the national economy. With the Covid-19 situation, IFC’s support will enable us to extend financial relief to our local clients,” said Gary Tseng, CEO of Phu My Hung.
“Subsequently, this will create a symbiotic ecosystem where we support each other with solutions that aid the economic recovery process after the Covid-19 crisis.”
This bond is the first IFC Covid-19 response project in Vietnam. It comes under the Real Sector Crisis Response Facility, which will provide US$2 billion globally to IFC’s existing clients in the healthcare, infrastructure, manufacturing, agriculture and service industries to cope with the pandemic.
Overall, IFC will provide US$8 billion Covid-19 fast-track financing to support the private sector and preserve jobs across the world.
“Leveraging IFC’s experience from past shocks, IFC aims to harness the private sector to limit economic damage. Supporting local businesses during crises is crucial since they are the main drivers of employment in emerging economies,” said Vivek Pathak, IFC Regional Director for East Asia and the Pacific.
He stressed that IFC’s support, an effective response to help ensure resiliency, shows its confidence in local businesses as well as its commitment to set Vietnam’s economy on a sustainable growth path post the pandemic.
This support comes after IFC helped Phu My Hung expand its housing projects in Vietnam’s secondary provinces in 2019, aimed at improving local residents’ access to quality housing as well as education and healthcare services.
“This funding will bolster Phu My Hung’s ability to cope with challenges emerging from the Covid-19 pandemic, including demand and supply chain disruptions,” noted Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos.
Having successfully contained the pandemic, Vietnam is now addressing the impact of Covid-19 on the economy, especially in trade, services and construction, the three most affected sectors.
In February, IFC increased trade finance limits for Vietnamese banks as a rapid response initiative to address in advance potential trade finance challenges triggered by the Covid-19 outbreak.
Late last month, IFC signed a memorandum of understanding with the People’s Committee of Hanoi to support its efforts to attract new-generation foreign direct investment and diversify its sources of funding, thereby sustaining the city’s rapid economic development, competitiveness and inclusive prosperity.
IFC, a sister organization of the World Bank and a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.
By Gia Phong