MIGA insures rehabilitation of critical road in Vietnam

MIGA is providing non-honoring of sovereign financial obligations cover of US$500 million to the project’s lenders for a period of 15 years.

The NH20 is the main route connecting Ho Chi Minh City, the political and economic center of southern Vietnam, with the Central Highlands region of the country. The MIGA-insured loan funds the rehabilitation of a severely deteriorated section of the road, a source of significant transportation bottlenecks and accidents.

“This investment supported by MIGA 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,” said Victoria Kwakwa, WB Country Director for Vietnam.

The project will follow MIGA's environmental and social sustainability policies. “MIGA's standards should ensure that the environmental and social risks of the project are taken into account and mitigated. This approach could have a demonstration effect beyond this specific project,” said Michel Wormser, MIGA Vice President and Chief Operating Officer. 

“This project will complement the WB’s involvement in the transport sector and will leverage the expertise of our WB colleagues based in Vietnam, thus increasing our impact in boosting shared prosperity in the country”, added Mr Michel Wormser. 

Goldman Sachs was the loan arranger and lender alongside Sumitomo Mitsui Banking Corporation and a syndicate of other international commercial banks. “The BT20 financing is a landmark transaction. With the support of MIGA and the risk coverage provided, we were able to provide a 15 year financing solution for Vietnam for a major public infrastructure project with significant benefits for the country,” said Tim Leissner, Vice Chairman Asia Ex-Japan of Goldman Sachs.