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Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Hanoi-Haiphong Expressway
Project ID
10077
Fiscal year
2013
Status
Proposed
Guarantee holder
Crédit Agricole Corporate and Investment Banking
Standard Chartered Bank
Investor country
France
United Kingdom
Host country
Vietnam
Environmental category
A
Sector
Transportation
Date SPG disclosed
April 12, 2013
Projected Board date
June 13, 2013
Gross exposure
 $650.0 million
Project type
Non-SIP
Strategic priority area
IDA
Complex Project
ESRS
Revised Hanoi-Haiphong Expressway ESRS, April 23, 2013

Project Description

This summary covers loans by Crédit Agricole Corporate and Investment Banking of France (CA-CIB) and Standard Chartered Bank of the United Kingdom (“SCB”) in support of the construction of the Hanoi-Haiphong Expressway (HHE)  in Vietnam. The lenders have applied for MIGA guarantees against the risk of non-honoring of sovereign financial obligations for a period of up to 13 years.

MIGA proposes to cover unconditional guarantees provided by the Ministry of Finance of Vietnam on loans from the lending banks to Vietnam Development Bank. 

The loan from CA-CIB would finance construction of Section 6 of the HHE and the loan from SCB would finance construction of Sections 1 and 4, of the HHE.  The expressway will stretch from Ring Road 3 on the south-western outskirts of Hanoi to the eastern side of Haiphong, close to the city’s port facilities.  The 106-kilometer expressway will have six carriage lanes, emergency lanes, and two frontage roads and it will employ a closed toll system.  The expressway will run parallel to and south of National Highway 5, a four-lane main road that currently serves as the main link between Hanoi and Haiphong, Vietnam’s second and third largest cities, respectively.  

Environmental Categorization

The project is a category A under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

The current highway that connects Hanoi and Haiphong is reaching capacity and serves a broad mix of commuters, local travelers, and freight. This has resulted in frequent congestion and a high accident rate.   As the Hanoi-Haiphong corridor is a key economic growth pole for Vietnam, linking the country’s main port with the capital will help generate significant economic benefits.   

The project is expected to create over 5,000 jobs during construction.

MIGA’s proposed involvement in the project would substantially complete the financing requirements for the construction of the project   

The World Bank Group’s Country Partnership Strategy for Vietnam supports the government’s plan to scale up public investment by mobilizing private resources for infrastructure development and this project is consistent with that goal.

MIGA’s proposed support for this investment is also aligned with the Agency’s strategy of supporting complex projects as well as investments into countries eligible for concessional lending from the International Development Association.

This Summary of Proposed Guarantee was revised on April 23, 2013.

 
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