The German Reconstruction Credit Institute (KfW) will provide financing, amounting to EUR28 million (USD38.55 million), for a project to build metro line No.2 in Ho Chi Minh City.

Map of metro line No.2 in Ho Chi Minh City

The project will be implemented with funding from the Asian Development Bank, the European Investment Bank (EIB) as well as KfW. KfW was the first to sign an official funding agreement with the Vietnamese Ministry of Finance (MoF) yesterday, March 1.

The sum, EUR 28 million, includes EUR10 in grants and EUR18 million in loans. This is part of the EUR240.75-million (USD331.4 million) that the German Government has pledged for the metro line.

The route will be 13 km long, with 10 stations, running from Ben Thanh Market to the area of Tham Luong.

The MoF signed another funding agreement with KfW worth EUR34 million (USD46.8 million), which will go towards six separate water purification and environmental projects all over Vietnam.

These projects are part of the Memorandum of Understanding signed on October 22, 2003 between the Vietnamese and Norwegian Governments.

Under the memorandum, Vietnam will be able to receive a commercial loan to implement selected projects, while the Norwegian government will be responsible for all the interest and fees attached to the loan. KfW has been jointly selected to provide the commercial loans on a preferential credit programme.

At the Consultative Group meeting held in Hanoi in early December, Germany pledged to provide Vietnam with USD199 million in Official Development Assistance (ODA) this year. Germany ranks the fourth among bilateral donors, just behind Japan, South Korea and France.