Vietnam will receive US$630 million in aid from the Asian Development Bank to reform state-owned enterprises in a move aiming to spur economic growth and open up opportunities for the private sector.
The bank, also known as ADB, approved the financial support for the Ministry of Financeââ‚¬â„¢s State-Owned Enterprise (SOE) Reform and Corporate Governance Facilitation Program on Monday.
The money aims to make SOEs more efficient, profitable and transparent, the Manila-based bank said in a press release.
The government has been equitizing, or partially-privatizing, SOEs since 1992, but the process has been slow and confined mainly to small firms.
The ADB money will help equitize and transform large state corporations, making them more attractive to strategic investors. Strengthening balance sheets, restructuring and raising management and transparency to international standards are all goals of the aid.
Some $600 million of the funds will be used to strengthen balance sheets at selected corporations and $30 million to improve their operations and management.
ââ‚¬Å“State-owned enterprise reform is critical to reducing the dominance of inefficient state production, promoting private sector development and enhancing economic growth in Vietnam,ââ‚¬ Pradeep Srivastava, Senior Regional Cooperation Specialist at ADBââ‚¬â„¢s Southeast Asia Department was quoted in a press briefing as saying.
The first $130 million will be used for infrastructure project company Song Da Group and logistics service provider Southern Waterborne Transport Corp.
Srivastava said the restructuring aimed to create general corporations made up of companies that can operate secure financial resources independently of the government.
The funds make up almost 36 percent of the estimated $1.77 billion cost of the six-year SOE transformation until December 2015. The remaining money will come from state budget, strategic investors and the corporations themselves.
Source: Thanh Nien