Chinese Development Bank pledges $1.5 billon loan for affordable housing construction

Between 21 to 23 of April 2011, a delegation from China Development Bank (CDB) led by Jiang Chao Liang visited Vietnam. On 22 April 2011, CDB and the Vietnam Ministry of Construction signed a Memorandum of Understanding (MOU) for low-income housing. Under this MOU, the bank committed to providing a $1.5 billion USD loan for developing low-income housing in Vietnam. Minister of Construction Nguyen Hong Quan mentioned that the MOU is the first step for Vietnamese construction enterprises to access a huge reliable credit source. It was reported in May 2011 that a working group will be set up to discuss financing details. It is unclear whether a final loan agreement was ever signed. The Ministry of Construction stated in 2011 that 37 low-income housing projects are currently underway with a total investment of 3.6 trillion VND ($172.24 million USD), which would provide accommodation for 64,000. As of 2011, construction on 1,653 of these homes had been completed. 400 of these have already been sold in Danang, while the rest are awaiting the selection of qualified buyers or lessees. In Hanoi, nine projects are underway, which will add 3,832 apartments to the low-income housing market in the capital. These projects are expected to house around 15,000 people. Three have already been completed, including Ngo Thi Nham apartment building in Ha Dong District, and two urban areas in Long Bien District. There are also six projects in Ho Chi Minh City that have already been started, totaling in 7,659 apartments. In 2012, it was reported that China Development Bank (CDB) had introduced China Construction Corporation to work on the project, but due to changes in leadership, progress has been slow. China Mechanics Corporation has also expressed interest in developing a social housing project with a total capital of $50 million USD. According to the Vietnamese news website Vnexpress, the Vietnamese Ministry of Construction has not yet disclosed any information about lending conditions and interest rates. A representative from the Ministry of Construction said the MoU will offer loans to Vietnamese firms who are in dire need of capital for low-income housing projects. Another report said that the interest rates will be under commercial rates.

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