IFC supports sustainable tourism infrastructure in Vietnam, Laos
IFC will provide loan of up to US$87.5 million to BIM Land Joint Stock Company to build sustainable tourism infrastructure in Vietnam and Laos
The International Finance Corporation (IFC), a member of the World Bank Group, is providing a loan of up to US$87.5 million to BIM Land Joint Stock Company, a large property developer in Vietnam, to support the growth of sustainable tourism infrastructure in Vietnam and Lao People’s Democratic Republic (Lao PDR).
The financing package to BIM Land and its subsidiaries, announced on September 16, consists of a loan of up to US$50 million from IFC’s own account and a trust loan of up to US$37.5 million from the multi-investor Managed Co-Lending Portfolio Program (MCPP) managed by IFC.
Tourism is one of the key growth drivers for both Vietnam and Lao PDR. In 2018, Vietnam recorded 15.5 million foreign visitors, while Lao PDR attracted about 4.2 million international arrivals. However, when compared with Thailand, which receives 38 million visitors annually, both Vietnam and Lao PDR have significant potential for further growth.
At least US$10 million of the financing package will be dedicated to developing tourism in Lao PDR. According to IFC, one of Lao PDR’s significant challenges is the lack of quality accommodation facilities in Vientiane, the capital and gateway for most international tourists. Similarly, in Vietnam, the underdevelopment of emerging tourist destinations such as Phu Quoc Island and Ha Long Bay can hinder the nation’s growing tourism.
Against this backdrop, IFC’s long-term funding will be critical to enhance the quality of tourism infrastructure in both the countries, attracting repeat visits and encouraging tourists to stay longer.
As part of the project, BIM Land CEO Doan Quoc Huy says the company will add a significant number of international quality hotel rooms or serviced apartments — more than 1,500 — in Vientiane, Ha Long Bay and Phu Quoc Island. “Moreover, the project scale and scope in Phu Quoc Island is expected to set new environmental and social standards in the property sector, attracting a new category of domestic and international tourists.”
The project is expected to create about 1,400 jobs, of which 60% is for women. Apart from local hiring and a relatively higher wage, the project will source around 90% of its goods and services locally. IFC will also share best practices to help the company enhance its performance.
In pursuit of a green and sustainable tourism business, BIM Land has committed to applying IFC’s Excellence in Design for Greater Efficiencies Green Building Certification System (EDGE) in its new hotels to be developed under this project with the aim of reducing energy, water and material consumption by at least 20% compared with similar buildings.
In extending the financing package, IFC country manager for Vietnam, Cambodia and Lao PDR Kyle Kelhofer notes the tourism industry is a major contributor to employment, foreign exchange earnings and tax revenues for developing countries. “In alignment with government’s efforts, IFC’s loan to BIM Land will help create higher skilled job opportunities for the local workforce in Lao PDR and Vietnam, thereby strengthening supply chains, driving inclusive growth and enabling private sector participation.”
17 Sep 2019