Improvement to National Highway 20 will boost safety and regional economic integration
A part of National Highway 20 that has deteriorated badly. Photo: Lao Dong newspaper
The World Bank’s political risk insurance arm Monday said it would help with repairs to and expansion of National Highway 20 connecting Ho Chi Minh City and the Central Highlands.
The Multilateral Investment Guarantee Agency (MIGA) would provide a cover of US$500 million against default of sovereign financial obligations to the project’s lenders for 15 years, the World Bank said in a statement Tuesday.
The MIGA-insured loan would fund the renovation of a badly deteriorated section of the road where massive bottlenecks and accidents occur frequently, according to the statement.
Victoria Kwakwa, the World's Bank Country Director for Vietnam, said: “This investment will help reduce travel time, improve safety, and increase rural incomes in a region where close to 40 percent of the rural population still lives below the poverty line despite considerable tourism, mining, and agriculture resources.”
Michel Wormser, MIGA vice president and chief operating officer, said his agency’s standards would ensure that the environmental and social risks of the project are taken into account and mitigated.
Goldman Sachs is the loan arranger and lender for the project together with Sumitomo Mitsui Banking Corporation and a syndicate of other international lenders.
Tim Leissner, vice chairman Asia Ex-Japan of Goldman Sachs, said: “The National Highway 20 financing is a landmark transaction. With the support of MIGA and the risk coverage provided, we are able to provide a 15-year financing solution for Vietnam for a major public infrastructure project with significant benefits for the country.”