HCMC attracting more capital to support its businesses

Deputy General Director of HCMC Finance & Investment State-owned Co., Nguyen Quang Thanh

When discussing special mechanisms of Resolution 98/2023/QH15 (on the pilot implementation of specific mechanisms and policies for the development of HCMC) for HCMC Finance and Investment State-owned Co. (HFIC) to provide more capital to businesses in the city, Deputy General Director Nguyen Quang Thanh shared that this new resolution allows HFIC to significantly increase its charter capital. As a result, HFIC can provide better loans to any needy enterprises while investing in prioritized socio-economic infrastructure projects in the city.

In addition, via issuing international bonds, HFIC can mobilize foreign capital more effectively to supply large-scale projects that require a huge capital amount.

The Deputy General Director then mentioned adopted solutions of HFIC to attract more investments. Firstly, the company increases its charter capital by equitizing companies with 100 percent state capital that have HCMC People’s Committee as their representative owner. The second money source for charter capital comes from HFIC’s profit after setting aside the prescribed funds.

Moreover, the company is urgently working with Asian Development Bank (ADB) and S&P Global Ratings to improve its credit rating for issuing bonds to mobilize more capital. Meanwhile, it is collaborating with International Finance Corporation (IFC) and World Bank (WB) to promote the issuance of green bonds as well as quickly accessing cheap capital attracting from other nations.

Deputy General Director Thanh then informed about its priorities in selecting projects and businesses to offer support. In particular, by 2025, HFIC will have focused on the nine fields of education, healthcare, culture and tourism, industry and supporting industry, agriculture – forestry – fishery, environment, energy, housing (exclusive of commercial accommodation), traffic, and other areas in the guidelines for the growth of HCMC.

Among the above fields, some require a considerable capital amount. For instance, in the field of industry and supporting industry, capital needs are in infrastructure construction projects and investments in industrial parks, hi-tech parks, export processing zones, as well as in innovative startup incubation centers, in equipment upgrade and technology transfer projects, in building new plants for innovative startups, in software development and export projects, in digital technology implementation projects for manufacturing activities, business administration, and development of key products in HCMC.

One extremely important field is green energy. The city is going to allocate a large capital amount to projects on clean water supply and drainage systems, sewage – waste – mud – emission processing systems, waste recycling systems, environmentally friendly product development, recycled energy (solar energy, wind energy, waste incineration plants)

Answering the question about interest rate support for businesses and projects, the Deputy General Director informed that this September, HFIC is going to submit to HCMC People’s Council a resolution on interest rate support (Investment Stimulus Program) for high-priority socio-economic projects in HCMC receiving HFIC’s loans.

As to the general support policy, it is expected that HFIC will offer interest rate support for no more than 5 – 7 years. The loan amount is VND200 billion (US$8.5 million) per project at most. Regarding the support proportion, depending on the field, a project can receive 100 percent or 50 percent of the interest rate.