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.
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 spg was revised on April 23, 2013.