City, JBIC to jointly set up infrastructure venture

Under the memorandum, JBIC and HCMC Finance and Investment State-owned Company (HFIC) will set up a financial joint venture to mobilize capital sources for infrastructure projects in the city such as metro lines and elevated roads.

At the signing ceremony, HCMC chairman Le Hoang Quan said infrastructure development would be a top priority of the city in the coming years. The city is in dire need of capital for its metro line projects that are being carried out, he added.

According to chairman Quan, in addition to cooperation in infrastructure development, the city also wants to call for Japanese investments in Hiep Phuoc Industrial Park and parks for supporting industries via JBIC. He also expected JBIC to hold its global conference in HCMC to boost foreign investment.

Tadashi Maeda, special advisor to the Cabinet of Japan and managing director of the Global Infrastructure Financial Group in Japan, said that HCMC was an important gateway for domestic and international goods transport, and thus JBIC decided to join forces with the city to develop infrastructure facilities under the public-private partnership (PPP) format.

According to HFIC, HCMC needs around VND50 trillion each year for infrastructure projects, but the city’s budget can supply only some VND10 trillion.

HCMC Finance and Investment State-owned Company (HFIC) is a State-owned financial institution under the HCMC government’s umbrella and is the successor of the now-defunct HCMC Urban Development Investment Fund (HIFU).

HFIC’s main task is to mobilize local and foreign financial sources to develop infrastructure facilities and major industries of the city.

The deal cut on Wednesday is a quick materialization of a plan put forth by Chairman Quan at a meeting with Tadashi Maeda in July. At that meeting, chairman Quan expressed hope of cooperation with JBIC to set up a financial investment fund or a financial company specializing in mobilizing investments in infrastructure facilities in the city.

According to Maeda at that meeting, JBIC has set up financial firms in India and China which have proved efficient in mobilizing capital for infrastructure development.

Regarding projects in HCMC and southern provinces, Maeda showed his interest in the Long Thanh international airport project as well as water supply and drainage projects.