According to the proposal, the fund’s capital will come from the central government and local governments in the region, namely Ho Chi Minh City and the provinces of Dong Nai, Binh Duong, Ba Ria – Vung Tau, Tay Ninh and Binh Phuoc.
In addition to equity, the fund could raise capital by issuing official development assistance bonds and loans, the WB said at a workshop in HCMC on Friday.
In addition to the above method, the WB research team also proposed four other options for developing the region’s infrastructure: 1) expanding the function of current local development investment funds, 2) creating a regional infrastructure development funds on the basis of the merger of a number of funds. of investment funds for local development, 3) the modernization of the Ho Chi Minh City State Financial Investment Company and 4) the restructuring of the Vietnamese Development Bank (VDB) to provide capital to localities in order to implement regional projects.
According to the WB, the establishment of a regional infrastructure development fund as a new policy bank could fill the gaps in the local development investment fund model and the Vietnam Development Bank (VDB).
VDB is a credit institution of the Government of Vietnam, established in 2006 as a policy bank with the aim of contributing to the process of eradicating hunger and reducing poverty through loans for the construction of irrigation and rural transport and infrastructure construction.
Spanning 23,560 km², the southeast is home to 18.7 million inhabitants, contributing 32% to the country’s economic growth.
However, this region faces many challenges, including lack of intra-regional and inter-regional infrastructure networks leading to traffic congestion, water pollution, development gaps between localities and dispersion of financial resources.
Present at the workshop, economist Tran Du Lich said the infrastructure development fund should focus on highways, interregional urban railways, port infrastructure, waste treatment and clean energy.
These are areas that require huge amounts of capital, and the fund needs to be organized differently from current local development funds, he said.
He added that the fund must have an independent mechanism, managed by a team of professionals and not by administrative officials.
Lich also said that the source of capital for the fund should not depend entirely on the national budget, but rather come from various sources, both inside and outside Vietnam.
To do this, the fund must have the right to issue international and national bonds as well as an investment mechanism, according to the expert.
Prime Minister Pham Minh Chinh said earlier that implementing research to create a regional infrastructure development fund would be a task of the Southeast Region Coordination Council, established in July.
Chaired by the Prime Minister, the council works to renovate coordination mechanisms for regional development, promote rapid and sustainable economic and social development of the region, protect the environment and ensure national defense and security .