The government of Sweden, a long-time ally of Vietnam, is planning to underwrite up to $2bn in loans from its banks to help fund Vietnamese airport projects, including Long Thanh International, which is set to become one of the largest in Southeast Asia.
The guarantee is to be given by Sweden’s Export Credit Corporation.
Aviation news site AeroTime Hub reports that the funding will expand Vietnam’s air traffic management capacity and help pay for the construction of Long Thanh as well as a third terminal at Tan Son Nhat International, both of which serve Ho Chi Minh City.
Work on the $4.8bn first phase of Long Thanh is due to begin this month. The move follows an announcement by the Export Credit Corporation this time last year that offered $1bn in export protection (see further reading).
As with the December 2019 offer, Vietnam would be required to spend a third of the loan on Swedish equipment.
The Vietnamese airport construction sector is experiencing a boom caused by the country’s increasing popularity as a tourist destination. Last year, 16.3 million international travellers arrived in the country, a 15% increase on the previous year.
Nguyen Xuan Phuc, the prime minister of Vietnam, has set a target of expanding the total capacity of Vietnam’s 22 airports to 100 million.
As well as the new Long Thanh mega-development, upgrades are being planned for smaller airports in the northwest province of Lao Cai, the southern tourist destination of Phu Quoc, Chu Lai in central Quang Nam province and the northeastern airport of Van Don.
Sweden has traditionally had warm relations with Vietnam. In 1969 it was one of the first states in the non-Communist world to establish bilateral ties with Hanoi, and had been a donor for a project promoting judicial reform, anti-corruption, transparency and gender equality.
Image: Small provincial airports such as this one in Chu Lai are set for expansion in the coming years (Nhocquay/CC BY 3.0)