IFC: Vietnam needs to increase PPP to support economy

HANOI - Increased cooperation between government and private companies is important in providing cleaner energy, better transportation routes, and reliable financial services to Vietnamese people, said an International Finance Corporation (IFC) leader.

Rashad R. Kaldany, vice president for Asia, Eastern Europe, Middle East and North Africa at IFC, a member of the World Bank Group, who is visiting Vietnam and Laos this week, discussed opportunities for scaling up IFC’s partnership with Vietnam during his meetings with private sector partners and senior government officials in Hanoi on Monday.

The talks centered on IFC’s support for the equitization of state-owned commercial banks, public-private partnerships in infrastructure, energy efficiency financing, and corporate governance.

In Hanoi, Kaldany met Deputy Prime Minister Nguyen Sinh Hung, Minister of Planning and Investment Vo Hong Phuc, Deputy Governor of the State Bank of Vietnam Nguyen Toan Thang, and Deputy Minister of Finance Tran Xuan Ha, among others.

“Vietnam is firmly on the path to becoming a middle-income country. To accelerate that process and lay the foundation for the next step of becoming a high-income country, Vietnam must improve the efficiency of its industrial base and relieve growing infrastructure bottlenecks,” he said. 

To attract world-class investors and companies, he said, “Vietnam must do more to adopt world-class standards in structuring investments (including protecting minority shareholder rights and granting mortgage to offshore lenders), establishing regulatory frameworks and in adopting global best-practice corporate governance.”

Asked about IFC’s future support for Vietnam, he said, “IFC is committed to Vietnam, where we have more than a decade of hands-on experience in supporting the country’s economic growth.

“At a time when many financing sources have been scaled down, we have increased our commitments in Vietnam by combining long-term investments in support of small and midsized businesses with advice that fosters innovation and strengthens business standards.”

IFC’s investments in Vietnam during the year that ended on June 30, 2010 totaled a record US$369 million.

The international financial institution has a three-pillared strategy in Vietnam: working with the government to improve the country’s investment climate; helping build the capacity of small and midsized enterprises (SMEs) that are committed to good environmental and social performance; and supporting the development of projects with high impact in the financial, infrastructure, and manufacturing and services sectors.

* In a related development, Rashad R. Kaldany on Monday witnessed IFC signing with Thien Viet Securities (TVS) a US$5 million loan to help the joint stock company develop its investment banking services for local SMEs in Vietnam.

The loan has a three-year term and can be converted into shares of the company.

IFC also will advise TVS on risk management and corporate governance practices to help the young capital market player build its merchant and investment banking operations.

Thien Viet Securities offers investment banking services to local private companies seeking to gain access to capital market financing.

In addition, the company provides advice to its clients on strategic development, operational management, corporate governance, mergers and acquisitions, and initial public offerings.

By helping TVS enhance its capacity, products and services to meet international standards, IFC will be able to replicate these practices in other sectors of the economy, particularly small and midsize enterprises that are currently overlooked by foreign investment banks.

Established in early 2007, Thien Viet Securities now has VND430 billion and three offices in Vietnam.

The company provides various services in investment banking, brokerage, and advisory services.