Vietnam’s Ministry of Finance (MoF) on November 6 signed a cooperation framework to strengthen infrastructure finance with the US Department of Treasury.
Vice Minister of Finance Tran Xuan Ha said the cooperation framework would support mobilizing capital from the private sector and developing financial markets for infrastructure development, in turn helping Vietnam realize its priorities in the field in the near future.
The cooperation framework includes five fields: developing a bond market with greater liquidity to serve the purpose of infrastructure investment; establishing financing instruments capable of mobilizing, facilitating and addressing barriers to private investment in infrastructure development sector; encouraging innovation and sustainability through sharing best practices on developing financial instruments; utilizing capacity building and technical assistance program in finance sector; analyzing government’s obligation towards contingent debt and other issues.
He added that the country’s need for investment capital for infrastructure in the coming time is extremely huge. According to a report of the Ministry of Planning and Investment, Vietnam will need an estimated US$195 billion for infrastructure development during 2017-2020, particularly in the fields of energy, road transportation, bridges, aviation, clean water supply, and waste treatment, Ha said.
“The implementation of such cooperation framework [with the US] would facilitate bilateral cooperation,” Ha stressed.
Michell Silk, Acting Assistant Secretary of the US Department of the Treasury, said the framework demonstrates close ties between Vietnam and the US, eventually looks to improve and remove barriers in order to enhance efficiency for financial instruments for the debt and capital markets and promote related activities.
Silk expected the cooperation would address Vietnam’s deficiencies in infrastructure development in the next four to five years, relieve financial pressure for the Vietnamese government and attract higher amount of private capital.
To implement the framework, the two sides will set up a working group, including members representing the two sides’ relevant agencies, and with the participation of the US Office of Technical Assistance (OTA).
