IFC supports Vietnam’s digitalization of road infrastructure

THE HANOI TIMES — The International Finance Corporation (IFC), a member of the World Bank Group, on July 22 completed its subscription to a five-year, VND500 billion (US$19.2 million) convertible bond issued by VETC Joint Stock Company to help the Vietnamese firm expand the coverage of its electronic toll collection (ETC) system across toll roads nationwide by 2030.

Such an investment is expected to enable VETC, the country's leading ETC system operator with a 75% market share in the ETC market, to expand its operations, enhance connectivity and road safety, and boost efficiency for millions of road users.

The funding will also support VETC in diversifying its offerings to include other transport-related digital payment services, such as e-parking, airport entrance fees, and cashless fuel station transactions. 

Road transport accounts for most of Vietnam's passenger and freight traffic and is currently expanding and modernizing thanks to substantial investment and ambitious government plans to build over 5,000 kilometers of expressways by 2030 and an additional 9,000 kilometers by 2050.

The 2022 regulation requiring ETC systems on all expressways has further accelerated the adoption of digital tolling. Since ETC was introduced in 2015, there has been a surge in usage, with the annual volume of transactions nearly doubling each year from 2019 to 2023, according to the Ministry of Transport. This rapid adoption has greatly reduced travel times, eased congestion, lowered fuel consumption, and decreased greenhouse gas emissions. It has also resulted in nearly $1 billion in economic savings over the past five years.

"We are honored to be one of the leaders in the digital transformation journey for Vietnam's transportation sector," said VETC General Director Nguyen Le Thang. "This pivotal investment from IFC enables us to accelerate the deployment of advanced ETC systems, delivering unmatched efficiency, cost savings, and environmental benefits to road users. Beyond toll collection, we are laying the groundwork for a smarter, greener, and more connected mobility future, creating significant economic and social value for our country."

Katherine Koh, IFC Regional Industry Manager for Infrastructure and Natural Resources, Asia and Pacific, said as Vietnam’s economy continues its strong growth trajectory and its role in global supply chains expands, the need for efficient and sustainable infrastructure is crucial.

"The expansion of electronic toll collection and the digitalization of vehicle-related payment services will not only enhance mobility and improve the capacity and efficiency of road transport infrastructure, but it will also deliver environmental benefits by reducing congestion and greenhouse gas emissions associated with road traffic," she said. 

Founded in 2015, VETC operates ETC systems on tolled roads and expressways across Vietnam under long-term contracts with road operators. The company manages 126 toll plazas and nearly 700 toll lanes nationwide, servicing over 3.8 million cars, according to IFC.