VietNamNet Bridge - Most of the foreign debt owed by State-owned corporations is concentrated in key business sectors, where they must seek giant funds for projects.

1. Electricity of Vietnam Group (EVN)

- Foreign debt of the parent company: VND162 trillion ($7.2 billion)

With average investment in each project of up to several billion US dollars, it is not a big surprise that EVN takes the lead among debtors. A report by the Ministry of Finance said that in 2014, Vietnam continued to negotiate and promote the mobilization of ODA from international donors. The country signed 41 ODA loan agreements and preferential loans with donors, totaling $4.7 billion, of which up to $1.85 billion (31.6%) was allocated to the Ministry of Industry and Trade, mainly for power projects.

The thermopower plant of Vinh Tan 4 alone has a total investment of more than $1.6 billion, of which 85% is loans from the Export-Import Bank of Korea (KEXIM) and the Korean Trade Insurance Corporation (KSURE) and the Japan Bank for International Cooperation (JBIC), equivalent to more than a billion US dollars.

The report also said that a significant loan of EVN in 2014 was the $108 million loan from BNP Paribas of France, not including two loans of EVN’s subsidiary – the National Power Transmission Corporation – worth $245 million from Citibank, which was guaranteed by the government in 2014.

2. Vietnam Airlines

- Foreign debt of the parent company: VND27,347 billion (US$1.21 billion)

Much of the $1.2 billion debt was borrowed to purchase aircraft. The two loans from HSBC France alone exceeded $110 million. If the debt is updated with nearly $600 million loans recently guaranteed by the Vietnamese Government to buy four Boeing 787-9 planes, the foreign debt of Vietnam Airlines will increase significantly.

3. Vietnam National Oil and Gas Group (PetroVietnam)

- Foreign debt of the parent company: VND20,305 billion ($1 billion).

Similarly, PetroVietnam's foreign loans are mainly for its major projects, including many loans guaranteed by the Vietnamese government in 2014 at foreign banks and financial institutions such as JBIC, NEXI, KEXIM, and HSBC worth $85 to $600 million.

Some PetroVietnam’s large projects using loans include the Vung Ang Thermal Power Plant I with capital of $1.6 billion, just completed in September this year. Some 70% of the capital in this work are from loans.

Another project of PetroVietnam underway that uses export credit loans is Thai Binh Thermal Power Plant 2. Loans to purchase equipment amounted to $795 million, including an export credit agreement (ECA) from KEXIM worth $330 million, a commercial loan contract with credit insurance of KEXIM worth $270 million, and foreign commercial loan contract worth more than $195 million.

4. Vietnam Expressway Corporation (VEC)

- Foreign debt of the parent company: VND18,525 billion ($900 million).

As the investor of huge projects worth billions of US dollars allocated by the State such as the highways of Noi Bai - Lao Cai, Da Nang - Quang Ngai, VEC has to mobilize hundreds of million of US dollars.

Earlier this year, a VEC report said that to have 43% of capital invested in five major projects, the corporation had to mobilize VND54 trillion ($2.4 billion) from project bonds and commercial loans from credit institutions at home and abroad.

Currently, one of the biggest financial problems of VEC is the high rate of capital/equity. VEC has proposed to increase charter capital from VND1 trillion (nearly $44.5 million) to more than VND22.1 trillion (nearly $1 billion).

5. Airports Corporation of Vietnam (ACV)

- Foreign debt of the parent company: VND12,138 billion ($600 million).

ACV also has to carry out the country’s biggest aviation infrastructure projects such as the T2 terminal at Noi Bai International Airport in Hanoi, Phu Quoc Airport and Can Tho Airport so it has to borrow foreign loans.

The largest loans of ACV are from Japanese financial institutions. An ACV report released in the third quarter of 2015 said that its ODA debt is about JPY78 billion, or nearly $600 million.

In a recent report by the Government, the debts of State-owned corporations at the end of 2014 had reached over VND1.5 million of billion, up 8% compared with 2013. Of these, loans from commercial banks and credit institutions was VND550 trillion.

According to the consolidated statement of State-owned corporations, foreign debt is at around VND381.5 trillion, including nearly VND118 trillion of ODA, foreign loans guaranteed by the Government VND124 trillion. The total foreign debt of the parent companies was VND253,450 billion.

US$1 = VND22, 500

Na Son