Swedish corporation offers loan for Long Thanh airport

10:11, 28/11/2019

The Swedish Export Credit Corporation (SEK) proposed the Vietnamese Government consider a commercial loan of over US$1 billion for the construction of the Long Thanh International Airport, which will be located in Dong Nai province.

 

The Swedish Export Credit Corporation (SEK) proposed the Vietnamese Government consider a commercial loan of over US$1 billion for the construction of the Long Thanh International Airport, which will be located in Dong Nai province.

An artist’s impression of the passenger terminal of the Long Thanh International Airport in Dong Nai Province – PHOTO: TL
An artist’s impression of the passenger terminal of the Long Thanh International Airport in Dong Nai Province – PHOTO: TL

The first phase of the airport is expected to cost US$4.779 billion, excluding compensation and resettlement support costs, according to a government report sent to the National Assembly.

The project is not experiencing financial problems, though its total cost is high. The State-run Airports Corporation of Vietnam (ACV) is likely to serve as the chief investor, together with the Vietnam Air Traffic Management Corporation.

ACV, though not yet named as the official project investor, has allocated some 37% of its equity, worth US$1.5 billion, to the airport’s construction. The corporation has signed several memorandums of understanding with domestic and international banks to secure loans to cover the remaining cost of some US$2.6 billion.

At a conference to discuss the airport, held last week, the SEK proposed a commercial loan of over US$1 billion with an annual interest rate of 4.2%, including a 1.25% insurance fee for the loan, for the construction of Long Thanh airport. To be eligible for the loan, Vietnam is required to use 30% of the total investment capital to purchase Swedish technologies and equipment.

The two sides are in talks to discuss the loan. The ACV said that if it is appointed as the investor for the project, it would consider the proposal from the SEK as other banks are offering an average interest rate of some 5%-5.5% per year.

The ACV is currently conducting an evaluation of its international credit rating for the sake of capital mobilization, including issuing corporate bonds.

Founded by the Swedish government and commercial banks in 1962, the SEK is expected to give Swedish industries better access to long-term financing and to increase their competitiveness.

Since 2003, the Stockholm-based SEK has been wholly owned by the Swedish government. SEK’s main task is to ensure access to sustainable financing solutions for Swedish export industries. Offering loans in 70 countries, the SEK has a strong international network and long-standing experience with international financing.

(Source:SGT)