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Banking & Finance

AFD proposes non-government guaranteed loans

Released at: 17:29, 16/03/2016

AFD proposes non-government guaranteed loans

French Development Agency keen to offer assistance minus government guarantees.

by Hung Nguyen

The French Development Agency (AFD) has proposed granting development assistance to certain activities, including climate change, environmental protection, and poverty reduction, without government guarantees, according to Mr. Remi Genevey, Director of AFD in Vietnam.

“It will not affect Vietnam’s public debt as the country has been taking measures to handle its public debt and raising the management ability of Vietnamese enterprises,” he added.

AFD has met with nine of the largest State-owned enterprises (SOEs), including Vietnam Airlines, Electricity of Vietnam (EVN), and Vinacomin to discuss mechanisms for these non-government guaranteed loans.

Ms. Ly Thai Ha from the Capital Management Department at Vinatex said that enterprises are very much in need of capital but face difficulties seeking foreign loans due to the need to obtain a government guarantee. The AFD loans would therefore make enterprises more active in managing capital flows.

Mr. Dang Quyet Tien, Deputy Director of the Corporate Finance Department at the Ministry of Finance, noted that to 2020 the mechanism for government guaranteed loans from foreign donors will be eased and gradually removed. 

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