Japanese Investment in Vietnam’s Infrastructure Surges

July 2019

Since the launch of Japanese Partnership for Quality Infrastructure Initiative, total investment from Japan in Vietnam’s Infrastructure including completed and pending projects has reached USD 209 billion. These projects are all national scale Infrastructure projects ,such as the two first lines of Hanoi Urban Railway, Line 1 of HCM City Metro, Terminal 2 at Noi Bai International Airport, Cai Mep-Thi Vai port and Hanoi-Ho Chi Minh City high-speed railway.

The investment flow from Japan is forecast to increase sharply in the coming years driven by development of the transport system connecting ports and big cities to support growth of the Manufacturing sector. The global head of the Energy and Natural Resources Finance Group at the Japan Bank for International Cooperation (JBIC) said that the organization is likely to arrange bigger loans for Vietnamese firms, especially for substantial Infrastructure and Energy projects.

Vietnam will need some USD 18-20 billion per year for Infrastructure development, which the authorities are unable to finance due to budget constraint. Therefore, the government is mobilizing capital for Infrastructure development from public-private partnerships and Overseas Development Assistance (ODA). Recently, they have held regular dialogues with foreign investors who are interested in the sector. 

A report from the Japan External Trade Organization (JETRO) mentioned that 65.3% of the 723 Japanese companies recorded high profits in Vietnam in 2018. Around 70% of Japanese businesses intend to expand operations in Vietnam, especially in the Manufacturing, trade and service, and retail sectors. 

(Sources: Vietnam News; Nhan Dan)



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