BCC East HCMC

MIGA issued $10 million in guarantee coverage to France Cables et Radio Vietnam Pte. Ltd. for its nonequity direct investment, via a business cooperation contract, with the state-owned Vietnam Post and Telecommunications agency. The guarantee is protecting the investor against the risk of transfer restriction.

The contract calls for the two companies to work together (on a build-and-transfer basis) to construct, install, and maintain at least 540,000 new fixed telephone lines in East Ho Chi Minh City over a 15-year period. The project area should see a major boost in the number of lines per person (teledensity) by 2003, with an increase of 20,000 lines in the city's rural outskirts. Teledensity, currently at 5 percent, is expected to reach 21 percent by the project's completion in 2005. The project sponsor also plans to spend about $1 million a year to train local staff.