Representatives of banks at the signing ceremony. — Photo baodautu.com.vn

HA NOI (Biz Hub) – The Bank for Development and Investment of Vietnam (BIDV) and four chosen banks inked a sub-loan agreement to re-lend the credit loan borrowed from the World Bank on June 9.

The agreement was inked to deploy the Vietnam Sustainable Agriculture Transformation (VnSAT) project.

The VnSAT project, which borrowed total capital of US$238 million from the World Bank's preferential loan, aims to specifically support implementation of the new agenda in two sub-sectors -- high value rice production for export in the Mekong Delta and coffee in the Central Highlands.

The Ministry of Agriculture and Rural Development (MARD) is implementing the project, while BIDV has been assigned to manage and disburse the loan under the wholesale bank model.

The project will strengthen the ability of governmental agencies in research, design and transferring technologies to farmers, as well as implementing and supervising restructure and renewal of the agricultural sector.

In addition, the project will provide direct support to some 140,000 households planting rice in eight provinces — Kien Giang, An Giang, Hau Giang, and Tien Giang, as well as Long An, Dong Thap, Can Tho and Soc Trang, to access and apply advanced technologies.

The households will benefit from the project by being able to join the value chain from production to consumption. Their profits were expected to increase by 30 per cent per hectare, bringing the total additional value to between $40 million and $60 million per year for the whole region.

In the Central Highlands region, some 63,000 farmer households in the five provinces of Lam Dong, Dak Lak, Dak Nong, Gia Lai and Kon Tum will have access to technologies for sustainable coffee planting and re-planting, with expected additional income of 20 per cent per year and $50 million for the region.

BIDV was chosen by the government to manage and re-lend a credit loan worth $105 million of the total capital of $238 million. BIDV will disburse this loan for the chosen banks to assist businesses in renovating technology and rice processing equipment in the Mekong Delta and coffee in the Central Highlands.

Under the plan, BIDV will select some 10 banks to participate in the VnSAT project. BIDV is also striving to accelerate the project's disbursement soon, thus contributing to effective implementation of the project to restructure the agricultural sector. — VNS