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Tuesday, June 18, 2024

Vietnam, U.S. sign multiple cooperation deals

The Saigon Times

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HCMC – Governmental agencies and businesses of Vietnam and the U.S. have signed multiple cooperation agreements, mainly on credit for green projects, with Prime Minister Pham Minh Chinh, who is in the United States to attend the ASEAN-US Special Summit, witnessing.

The International Finance Corporation (IFC) and HCMC Development Joint Stock Commercial Bank (HDBank) signed a memorandum of understanding on strategic cooperation to help Vietnamese small and medium enterprises (SMEs) access innovative funding, enabling them to better participate in global supply chains and expand into new markets, the local media reported.

IFC is expected to help HDBank build a supply chain finance (SCF) portfolio of US$1 billion in the next three years, especially in the areas of building materials, agricultural product trading, fast-moving consumer goods and fuel distribution.

IFC will support HDBank to design an SCF strategy for the agriculture sector, broaden its SCF products—especially supplier and distributor financing—and bring onboard anchor firms along with their suppliers and distributors, among others.

IFC has earlier granted HDBank a trade finance limit of US$40 million within the framework of the Global Trade Finance Program to improve the latter’s capacity to cover payment risks in granting trade financing to local companies, mainly SMEs.

In 2021, IFC committed a US$70 million loan to HDBank to sponsor the renewable energy sector. IFC also subscribed U$$95 million to a five-year convertible bond issued by HDBank to support increased lending to micro, small and medium enterprises.

The total value of commitments between IFC and HDBank has reached over US$200 million and the figure will continue increasing in the coming time.

Pham Quoc Thanh, CEO of HDBank, said SCF that links buyers, suppliers and financial institutions would efficiently support trade cycles. IFC’s timely support will enable local businesses to make use of new trade opportunities and improve their linkages to formal supply chains, contributing to Vietnam’s economic growth.”

It will help HDBank realize its vision of being among the top banks in the country with a core focus on SMEs and retail banking, while emphasizing value chain financing and growing its anchor client base. The agriculture chain is also a critical target industry of the bank, especially hi-tech and green agriculture, Thanh added.

Stephanie von Friedeburg, IFC’s first Senior Vice President for Operations, said, “SMEs are the backbone of Vietnam’s economy and are essential to the country’s ambition to become a regional manufacturing hub. Our support to local financial institutions like HDBank will help SMEs in Vietnam link with global supply chains and access opportunities to grow and create jobs.”

On the same day, the Vietnam Electricity Group (EVN) and the United States’ General Electric (GE) Company also signed a cooperation agreement for the 2022-2027 period.

The cooperation is aimed at boosting cooperation opportunities in electricity generation and transmission, exchanging new technologies applied to the United States’ power system and providing services for new liquefied-natural-gas-fired power projects.

The cooperation is meaningful for EVN to realize its development strategy and the national goal of effective power shifting.

Prime Minister Pham Minh Chinh also witnessed the signing of a cooperation agreement between IFC and the Vietnamese Ministry of Natural Resources and Environment to help realize Vietnam’s commitments to climate change and the environment at the COP26.

IFC will also support the State Bank of Vietnam in developing the legal framework on environmental and social standards in the investment activities of Vietnamese credit institutions.

The Ministry of Natural Resources and Environment also signed a deal with Citigroup to seek technical support and information to reach net zero emissions.

As for the energy sector, the Vietnamese Ministry of Planning and Investment issued an investment certificate for the Son My LNG port warehouse project to AES Corporation and PetroVietnam Gas Joint Stock Corporation.

Moreover, the U.S. Trade and Development Agency, Black & Veatch Management Consulting, LLC and Mekong Clean Energy Interconnection Company Limited reached an agreement to study the feasibility of an electricity transmission line in Bac Lieu.

The digital transformation sector also had remarkable cooperation deals, including one between the Vietnamese Ministry of Information and Communications and the U.S.-ASEAN Business Council to help businesses from the two countries expand cooperation in the digital technology sector, and one between the Vietnam Posts and Telecommunications Group and Casa Systems, Inc. on cooperation in 5G development.

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