Representatives of BIDV and the Laos' government signed a credit contract on April 11. — Photo bidv.com.vn

HA NOI (Biz Hub) — The Bank for Investment and Development of Viet Nam (BIDV) will lend US$146.84 million to Laos to help the country develop infrastructure in the eastern province of Houaphanh.

The bank had signed a contract on preferential loans with Laos' Ministry of Finance on April 11. The funds will be used to build a road and other facilities in different districts.

BIDV said an annual interest rate of 3 per cent would be maintained during a lending term of 15 years, and this term can be prolonged by three years. The Laos' government will be fully responsible for selecting consultants and contractors.

The contract is part of high-level commitments of both nations for supporting the socio-economic development of Houaphanh, as well as the Xiangkhouang Province in the north-east of Laos.

The projected infrastructure will help connect these localities with Viet Nam's Nghe An and Thanh Hoa central provinces. Direct linkages in trade, investment and tourism will also be fostered in such a manner, the bank said.

Certain districts in Houaphanh are the poorest in Laos, with the ratio of poor households hitting over 70 per cent. The gross domestic product (GDP) per capita in those districts is $350, equivalent to only a fifth of the country's average.

Improved infrastructure is important for Houaphanh and for catching up with other localities nationwide in terms of economic development and living standards.

The bank said the committed loan would be disbursed early next month. It urged the authorities of Laos to speed up the land clearance process so that the projected work can be completed by the second quarter of 2017.

LaoVietBank is a joint venture between BIDV and Banque Pour Le Commerce Exterieur Lao. It had begun construction of the $80 million Noongtha office and training complex in Vientiane capital on April 12. — VNS