Vietnam and South Korea discuss ODA loans for priority infrastructure projects

Vietnam and South Korea discuss ODA loans for priority infrastructure projects

Vietnam and South Korea are seeking to strengthen cooperation on official development assistance loans, with high-level talks held in Seoul on September 7-8.

Deputy Minister of Finance Tran Quoc Phuong and Vice Minister of Economy and Finance Ji Sung Moon. Photo: Nguyen Hoang Linh

The talks took place during National Assembly Chairman Tran Thanh Man’s official visit to South Korea, with Deputy Minister of Finance Tran Quoc Phuong meeting Ji Sung Moon, Vice Minister of Economy and Finance, and Junh Hwa Seo, vice chairman of the Export-Import Bank of Korea (KEXIM).

At his meeting with Vice Minister Ji Sung Moon on September 8, Deputy Minister Phuong highlighted the role of South Korean ODA loans in developing Vietnam’s socioeconomic infrastructure. He briefed the South Korean side on preparations for investment and called on the South Korean government to make early commitments in 2026 for priority infrastructure projects that have completed their investment procedures.

For 2024-2030, the Vietnamese and South Korean governments have signed two agreements on loans provided through the Economic Development Promotion Facility and the Economic Development Cooperation Fund (EDCF) under KEXIM, with a combined value of $4 billion.

According to Deputy Minister Phuong, Vietnam’s Ministry of Finance has sent official diplomatic notes requesting South Korean ODA loans for several projects, including the construction of a road linking downtown Tuyen Quang City with My Lam mineral spring tourism area; a coastal road project connecting Ben Tre province with Tien Giang and Tra Vinh provinces (now Vinh Long and Dong Thap provinces); and the Tan Van-Nhon Trach section of Ho Chi Minh City’s Ring Road 3.

The deputy minister also called on South Korea to issue official responses at an early date so that Vietnam can arrange alternative sources of funding if South Korean ODA loans are not provided for the projects. This would help prevent delays in implementing the country’s priority infrastructure projects.

For its part, the South Korean Ministry of Economy and Finance and KEXIM leadership thanked Vietnam’s Ministry of Finance for its support for the EDCF Office, particularly in facilitating KEXIM’s operations in Vietnam.

The Vietnamese government has adopted a resolution on preferential treatment for the EDCF Office in Hanoi. The South Korean side also stressed that Vietnam remains South Korea’s top priority in the provision of ODA loans and said it would work closely with Vietnam to prepare the necessary information and reports for submission to the South Korean government, with a view to securing commitments for the three projects.

Deputy Minister Phuong and Junh Hwa Seo, vice chairman of KEXIM. Photo: Nguyen Hoang Linh

Alongside discussions on specific projects, the two sides exchanged views on priorities for ODA loan cooperation in the future.

The South Korean side said its government had revised its priority areas for providing ODA loans, with a greater focus on AI, digital transformation, supply chains and human resource development.

South Korea expressed interest in a project to develop infrastructure at Vietnam National University Ho Chi Minh City and proposed that the two sides organise an ODA policy dialogue between Vietnam and South Korea.

The new priority areas outlined by South Korea are expected to open up additional avenues for bilateral cooperation, alongside continued efforts to mobilise ODA loans for Vietnam’s socioeconomic infrastructure development.

South Korea also expressed its desire to organise a Vietnam-South Korea ODA Policy Dialogue to strengthen exchanges on ODA cooperation between the two countries. Deputy Minister Phuong welcomed the proposal and agreed to organise the ODA policy dialogue in the future.

VIR