On March 7, 2014, MIGA issued a guarantee of $500 million covering a loan from a syndicate of commercial banks to support the construction financing of the BT20 National Highway 20 Project in Vietnam. Sumitomo Mitsui Banking Corporation (SMBC) is serving as the political risk insurance agent for the lenders that include Goldman Sachs as the lead arranger and 10 other international commercial banks. The coverage is for $500 million against the risk of non-honoring of sovereign financial obligations for a period of up to 15 years.
The project consists of the rehabilitation and upgrading of the National Highway 20 that extends from the Dong Nai to Lam Dong provinces of Vietnam, under a build-transfer contract between the BT20 Consortium and the Ministry of Transportation.
The NH20 road is a critical connector road for the Ho Chi Minh City-Dalat (Central Highlands-South Central Coastal Ports) corridor, and its upgrade and rehabilitation is expected to result in travel time savings, improved road safety, and reduced vehicle operating costs.
The project is also expected to support the economic growth and development of the Central Highlands area, home to a high concentration of impoverished ethnic minority groups.
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 priority of supporting complex projects as well as investments into countries eligible for concessional lending from the International Development Association.
***The ESRS has been revised to provide information on 2 additional road sections, which are proposed to be constructed using the financing guaranteed by MIGA.***