Japan pledges $2.15 bln for infrastructure works

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Japan has pledged US$2.15 billion in soft loans to Vietnam for a clutch of infrastructure and other projects, news website VnExpress reported.

The Japan International Cooperation Agency has agreed to lend for 11 projects, with a 12th beneficiary, the $295-million O Mon 3 coal-fired power plant, still in the negotiations stage.

Loans at the lowest rate of 0.2 percent are meant for the Nhat Tan Bridge and a metro system in Hanoi, the Cai Mep Port in the southern province of Ba Ria Vung Tau, and work to improve the safety of a rail bridge on the Hanoi-Ho Chi Minh City route.

But Vietnam has to award all the works to Japanese contractors.

A loan for a project to mitigate the effects of climate change carries 0.3 percent interest.

For the rest, the rates are between 0.65 and 1.4 percent.

They all have a maturity period of 30-40 years with a 10-year grace period.

The loans play an important role at a time when the Vietnamese government plans to restructure the economy, Minister of Investment and Planning Bui Quang Vinh said at the agreement signing ceremony on March 22.

Japanese ambassador Tanizaki Yasuaki said the loan deal symbolizes the relations between the two countries.

The proposed loans take the total credit from Japan -- part of which is non-refundable -- since 1992 to $22.4 billion.

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