The IFC, a member of the World Bank Group, is providing a loan of up to $87.5 million to the BIM Land JSC, a leading property developer in Vietnam, to support the growth of sustainable tourism infrastructure in the country and in Laos.
The investment aims at attracting more domestic and international tourists for both countries, and subsequently creating jobs and bolstering these economies.
“We value the IFC’s extensive experience and expertise drawn from its global portfolio of tourism projects,” said Mr. Doan Quoc Huy, CEO at BIM Land. “As part of this project, BIM Land will add a significant number of international quality hotel rooms or serviced apartments, more than 1,500, in Vientiane, Ha Long Bay, and Phu Quoc Island. Moreover, the project scale and scope on Phu Quoc Island is expected to set new environmental and social standards in the property sector, attracting a new category of domestic and international tourists.”
One of Laos’ significant challenges is the lack of quality accommodation facilities in Vientiane, the capital and gateway for most international tourists. Similarly, in Vietnam, the underdevelopment of emerging tourist destinations like Phu Quoc Island and Ha Long Bay can hinder the country’s growing tourism sector. Against this backdrop, the IFC’s long-term funding will be critical to enhancing the quality of tourism infrastructure in both countries, attracting repeat visits and encouraging tourists to stay longer.
The IFC’s financing package to BIM Land and its subsidiaries consists of a loan of up to $50 million from the IFC’s own account and a trust loan of up to $37.5 million from the multi-investor Managed Co-Lending Portfolio Program (MCPP) managed by the IFC. At least $10 million of this financing package will be dedicated to developing tourism in Laos.
The project is expected to create approximately 1,400 jobs, in which 60 per cent are for women. Apart from local hiring and a relatively higher wage, the project will source around 90 per cent of its goods and services locally. IFC will also share best practices to help the company enhance its performance.
In addition, in pursuit of a green and sustainable tourism business, BIM Land has committed to applying the IFC’s Excellence in Design for Greater Efficiencies Green Building Certification System (EDGE) in its new hotels to be developed under the project, with the aim of reducing energy, water, and material consumption by at least 20 per cent compared with similar buildings.
“The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for developing countries,” said Mr. Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. “In alignment with government efforts, the IFC’s loan to BIM Land will help create higher skilled job opportunities for the local workforce in Laos and Vietnam, thereby strengthening supply chains, driving inclusive growth, and enabling private sector participation.”
Tourism is one of the key growth drivers for both countries. In 2018, Vietnam welcomed 15.5 million foreign visitors and Laos some 4.2 million. However, when compared with Thailand, which welcomes 38 million visitors annually, both Vietnam and Laos have significant potential for further growth.
