Vietnam’s Ministry of Finance (MoF) on November 6 signed a cooperation framework to strengthen infrastructure finance with the US Department of Treasury.

Overview of the signing ceremony. Source: VGP.

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.

Ha said Vietnam has huge capital needs for infrastructure development. A study conducted by the Ministry of Planning and Investment revealed Vietnam would need around US$195 billion for infrastructure development in the 2017 – 2020 period, particularly in the fields of energy, road transportation, aviation, clean water, and waste treatment.

“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 Treasury, said the framework demonstrates close ties between Vietnam and the US, eventually improves and removes barriers to enhance efficiency for financial instruments in the bond and capital markets.

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.

As part of the cooperation, the two sides would set up a joint working group with members representing both the US and Vietnam.