German credit institute finances two projects

March 02, 2011 | 08:00

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The German Reconstruction Credit Institute (KfW) will sponsor Ho Chi Minh City ’s metro project and the Norwegian mixed credits programme with funding of 62 million EUR.

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Two contracts to this effect were signed in Hanoi on March 1 between Vietnam ’s Ministry of Finance and KfW.

The 28 million EUR contract for a project to build metro line No 2 in Ho Chi Minh City includes 10 million EUR in non-refundable aid and 18 million EUR in loans.

The project is being carried out using capital sourcing from the Asian Development Bank, the European Investment Bank (EIB) and KfW.

The sum is part of the German Government’s capital for the 240.75 million EUR project.

The other contract, worth 34 million EUR, will finance six projects (out of the total 12) on clean water supply and environmental hygiene in a number of Vietnam ’s localities.

The Norwegian Government has pledged to provide finance for these projects as agreed in a memorandum of understanding signed on Oct. 22, 2003 between the Vietnamese and Norwegian Governments.

Under the MoU, Vietnam will borrow capital from a bank to implement selected projects and the Norwegian Government pledged to support all interest rate and other fees of the loan. KfW was selected by both sides to provide commercial loans to implement the preferential credit programme.

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