ADB Fund Expected to Boost Development of PPP Model in Vietnam

The State Bank of Vietnam and the Asian Development Bank (ADB) this month expect to sign a loan agreement to set up a fund for public-private partnership (PPP) projects to improve Vietnam’s troubled infrastructure.With the starting financial source of $20 million, this fund is expected to contribute significantly to the development of the PPP model in Vietnam, the Ministry of Planning and Investment said. It is reported that the Agence Française de Développement (AFD) is likely to provide up to $10.3 million for the fund. The agency is among many sponsors willing to contribute to the fund.To boost the PPP model, Vietnam plans to establish an open framework to lure investors for critical projects. The new approach contrasts sharply with the initial PPP model which required the Vietnamese government to identify PPP projects and then choose appropriate investors.“We will improve PPP if we create a market for it and apply more pilot projects to attract more private investors,” said Cao Viet Sinh, Deputy Minister.Several such pilot projects have long been proposed by either private investors or local authorities, but did not conform to Vietnam’s existing PPP policy for various reasons. These conflicts have resulted in the deadlock in many PPP projects such as Nguyet Vien-Thanh Hoa bridge construction project and Song Hau River water plant No.1 project.Many foreign investors are monitoring opportunities in Vietnam’s PPP projects. A group of U.S. investors, for example, has just sent Minister Bui Quang Vinh a list of key infrastructure projects under the mode of PPP in which they’re interested. (vir.com.vn Dec 4)