International Finance Corporation (IFC), a member of the World Bank, is providing a loan of up to $87.5 million to Vietnamese property developer BIM Land to build tourism infrastructure projects in Vietnam and Laos. DSA reports.
The financing comprises up to $50 million from IFC’s own account and a trust loan of up to $37.5 million from the multi-investor managed co-lending portfolio programme (MCPP) it manages.
At least $10 million of this loan package will be earmarked for developing tourism activities in Laos, IFC said.
Hạ Long Marina project developed by BIM Land in Hạ Long City. — Photo courtesy of BIM Group
In August, we first reported that BIM Land has successfully raised the loan to build the Intercontinental resort in Ha Long Bay and Citadines apartments and a water park in Phu Quoc Island, Vietnam, and Holiday Inn in Vientiane, Laos. These projects were estimated to cost $202.8 million.
IFC had earlier proposed as much as $100 million for this package but the approval went down to $87.5 million as BIM Land re-evaluated the costs.
In 2018, Vietnam attracted 15.5 million foreign visitors and Laos saw approximately 4.2 million. However, the numbers were still much lower compared to Thailand, which receives 38 million visitors annually. Both Vietnam and Laos boast significant potential for further growth, IFC said.
One of Lao PDR’s significant challenges is the lack of quality accommodation facilities in Vientiane, the capital and gateway for most international tourists, the World Bank Group’s private lending arm added. Similarly, in Vietnam, the underdevelopment of emerging tourist destinations like Phu Quoc Island and Ha Long Bay can hinder the nation’s growing tourism.
“The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for developing countries,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos.
“In alignment with the government’s efforts, IFC’s loan to BIM Land will help create higher-skilled job opportunities for the local workforce in Laos and Vietnam, thereby strengthening supply chains, driving inclusive growth and enabling private sector participation.”
IFC has continued its active deal flow in Vietnam this year, with an equity-quasi investment in Nafoods as well as a proposal to inject a $10-million convertible loan in healthcare group Pacific Holdings.