CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Vietnam’s government-guaranteed debts hit US$27.7 billion
Ngoc Mai 05:05, 2019/08/06
Many projects guaranteed by the government have been in difficult financial situation and cannot service debt.
As of 2018, Vietnam’s government-guaranteed debts hit US$27.7 billion, including US$23.7 billion from foreign lenders and US$4.1 billion from domestic sources, according to latest report from the Ministry of Finance (MoF). 
 
Illustrative photo.
Illustrative photo.
The report also revealed many projects guaranteed by the government have been in difficult financial situation and unable to repay debt, which are subject to asset liquidation, restructuring, or debt payment with money from the state budget. 

According to the MoF, the power sector has the largest number of projects guaranteed by the government, due to stable revenue and high debt paying capability. 

However, the financial guarantee mainly focuses on major state-owned corporations, leading to high risks in case of these state-owned enterprises (SOEs) getting into troubles. These include Vietnam Electricity (EVN) - the sole electric distributor in the country, Vietnam National oil and Gas Group (PetroVietnam), and Vietnam National Coal and Minerals Group (Vinacomin).

Of the total, EVN accounted for the largest with 58.43% of total funds guaranteed by the government in the power sector as of the end of 2018 or US$10.1 billion, down 1.94% against 2017, while that of PetroVietnam was 17.61% or US$3.3 billion, up 1.54%. 

Total financial guarantee by the government in the power sector reached US$17.3 billion as of December 31, 2018, stated the report. 

Since 2018, the MoF has not issued government guarantees for projects financed by domestic funds, however, in the power sector, the government has issued guarantees for expanded Song Hau 1 and Vinh Tan 4 thermal power plants worth US$1.6 billion. 

In addition to the power sector, the government also issued guarantees for the aviation industry, including national flag carrier Vietnam Airlines with US$1.03 billion and Vietnam Aircraft Leasing Company with US$297.4 million. 

Projects unable to service debt

Debts from projects backed by the government in 2018 have been fully repaid. However, the government had to allocate US$8.13 million to repay debt for Vietnam Paper Corporation, taking the total amount being paid in advance to settle the company’s debt at US$97 million. 

As of the end of 2018, the Ministry of Industry and Trade and Vietnam Paper Corporation have not been able to liquify assets from the loss-making Phuong Nam Paper plant project to recover state capital. 

Other projects subject to government covering debts include the La Son – Tuy Loan expressway project under the Ministry of Transport worth US$44.1 million, Ha Long cement project with US$58.22 million, Dong Banh cement project with US$16.55 million, and the Thai Nguyen cement project with US$34.33 million. 
Comments
Other news
21:54, 2024/04/23
3,400 taels of gold purchased at the first-in-11-year auction
Gold trading firm SJC and lender ACB are the two successful bidders at the auction held today.
16:19, 2024/04/22
HoSE to launch KRX-developed transaction system in early May
Brokerage firms are expected to prepare data for the transition to the new system.
15:23, 2024/04/22
Central bank moves gold auction to tomorrow
The auction was postponed due to a lack of bidders and escrow deposits.
18:14, 2024/04/19
Vietnam’s c.bank sells USD to stabilize exchange rate
The move is aimed at alleviating market concerns, increasing foreign exchange supply, and ensuring smooth liquidity.
21:31, 2024/04/15
Central bank to auction gold to calm domestic market
Domestic gold prices have surged in recent weeks amid rising geopolitical tensions.
15:12, 2024/04/04
Vietnam's Central Bank ready to steady foreign exchange market
With more than $100 billion in foreign exchange reserves, the State Bank of Vietnam (SBV) is ready to intervene to stabilize the exchange rate as needed.