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Nov 26, 2019 / 11:09

Vietnam considers Swedish loans to build largest airport

A Swedish state-owned entity proposed a commercial loan of over US$1 billion for the construction of Long Thanh airport, the would-be largest of its kind in Vietnam.

Vietnam is considering Sweden’s loans to build Long Thanh International Airport and develop the air traffic control activities, according to Deputy Minister of Planning and Investment Vu Dai Thang.

 Illustrative photo.

Long Thanh International Airport is in need of huge investment capital, for which financial support from other countries, including Vietnam’s development partners such as Sweden, is very important, said Thang at a conference held last week discussing the financial mechanism for Long Thanh airport.

Once completed in Dong Nai province, Long Thanh airport would be the largest of its kind in the country.

Thang expected the Ministry of Planning and Investment to continue working with Sweden’s funds and enterprises on the detail of the loans for further consideration.

Sweden’s Ambassador to Vietnam Ann Mawe revealed that during the visit of Prime Minister Nguyen Xuan Phuc to Sweden in May, the two countries’ prime ministers discussed a potential loan for Long Thanh airport and air traffic control activities in Vietnam.

Ambassador Mawe expressed hope that Swedish financial institutions could contribute to the success of the project.

At the conference, state-owned Swedish Export Credit Corporation (SEK), proposed a commercial loan of over US$1 billion with interest rate of 4.2% per year, including a 1.25% of insurance fee for the loan, for the construction of Long Thanh airport. To be eligible for the loan, Vietnam is required to use 30% of the total investment capital to purchase Swedish technologies and equipment.

Under Vietnam’s socio-economic development plan in the 2021 – 2025 period, the country would need around US$150 – 200 billion to finance infrastructure development projects, including airports, seaports, railways and express ways, among others, Thang informed.

Under the plan, Long Thanh airport remains a key investment project for Vietnam, with a capacity of serving 100 million passengers and handling 5 million tons of goods a year, with total investment capital of US$16 billion, said Thang.

The short-term target of Long Thanh International Airport is to ease the overloading of Tan Son Nhat International Airport, and in long-term to become one of the region’s air transportation hubs.

Prime Minister Nguyen Xuan Phuc has assigned state-run Airports Corporation of Vietnam (ACV), the largest operator and operator of 22 commercial airports in the country, to conduct a feasibility study report for the first construction phase of the airport.

The project is scheduled to commence on 2020 and the construction process is slated to be completed by 2025.

During the first phase with investment capital of US$4.77 billion, the project is set to build a runaway, taxiways, a passenger terminal with capacity of 25 million passengers and a cargo terminal of 1.2 million tons of goods in a year, along with other supporting facilities.