Work is underway at Ben Thanh-Suoi Tien railway section (Line 1) in HCM City. (Photo: saigoneer.com)
Japan has committed to lend 90.175 billion Japanese yen worth of official development assistance (ODA
) to an urban railway project linking the downtown of Ho Chi Minh City
, Vietnam’s southern metropolis, with its suburbs.
The loan will carry an annual interest rate of 0.1% and a repayment period of 40 years, with a grace period of 10 years, the Japan International Cooperation Agency (JICA
) in Vietnam has said in a press release.
This project comprises multiple funding rounds. For the first loan, 20.887 billion yen ($196 million) was allocated in March 2007, and the second loan worth 44.302 billion yen ($415 million) was allocated in March 2012.
The funds from the current loan will be to public works, the procurement of equipment and materials, and consulting services, all of which are required for railway construction. Japanese technology will be utilized.
This is part of an ODA agreement worth a combined 166 billion yen ($1.5 billion) that was signed during Prime Minister Nguyen Xuan Phuc’s visit to Japan on May 26-28.
Under the agreement, Japan will also provide a loan worth $191 million to improve the water environment in HCM City and $500 million to build Thai Binh thermal power plant and transmission lines.
Japan is the biggest ODA provider for Vietnam, with the total pledges amounting to 2.58 trillion yen, or around $24 billion to date.