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ADB gives $500 mln loan to HCMC metro project

ADB gives $500 mln loan to HCMC metro project

Friday, July 05, 2013, 11:01 GMT+7

Yesterday the Asia Development Bank (ADB) and the State Bank of Vietnam signed an agreement in which the ADB will grant a US$500 million loan, the second of its kind, to the second line of the metro project in Ho Chi Minh City. The agreement was signed on Thursday by State Bank of Vietnam Governor Nguyen Van Binh and ADB Country Director Tomoyuki Kimura. In March the ADB granted $40 million to the same project. This amount was spent on studies, surveys and designs that served as preparatory work for the metro project. Total investment for the metro line is estimated at nearly US$1.375 billion, of which $540 million has been given by ADB, $313 million will be granted by KFW –  a German government-owned development bank; $195 million will come from the European Investment Bank (EIB), and the rest will be the counterpart capital of HCMC. As currently designed, the metro line will be 11.3 km long, running from Ben Thanh Market in District 1 through Tan Son Nhat airport in Tan Binh District to Tham Luong in District 12. The underground part of the line will be 9.315 km in length. The line will have 11 terminals, including 10 underground. Speaking at the signing ceremony, Tomoyuki pledged to give strong support to Vietnam in general and HCMC in particular in developing traffic infrastructure in a sustainable manner. The second metro line, the Japanese banker said, will not only help ease traffic congestion but also contribute to improving transport efficiency in the city. Under the frame agreement, the first loan of the credit line will be US$40 million, with a lease term of 20 years plus a grace period of 6 years and at a Libor interest rate that increases by 0.15 percent per year. The metro line is expected to be completed in 2015 and put into trial operation in 2016.  Work on the first metro line in HCMC began in August 2012 and is expected to be completed in 2017. The line is expected to be 19.7 km long, including 2.6 km underground in District 1 with three terminals, and 17.1 km above ground with 11 terminals.

This first line will run through District 1, Binh Thanh District, District 2, District 9, and Thu Duc District in HCMC before reaching Di An Town in Binh Duong Province.

The project’s investment capital is estimated at VND48 trillion ($2.4 billion), most of which is sourced from Japanese ODA, with the rest coming from the State budget.



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