Reporter: Have you met many difficulties in the negotiation process of a loan of EUR 74.7 million for Ialy Hydropower Plant Extension project between EVN and AFD, sir?
Mr. Fabrice Richy: The loan negotiation process for this project took quite a while. We haven’t met any difficulties with EVN, because the two parties have understood each other quite well after 20 years of cooperation. However, non-sovereign lending is still a new format for Vietnam. Therefore, it is necessary to put in place appropriate procedures for the Government of Vietnam to approve.
Mr. Fabrice Richy - Director of AFD in Vietnam
However, with the close cooperation between AFD and EVN, we have overcome all the difficulties and completed the necessary procedures with the Ministry of Finance, the Committee for Management of State Capital at Enterprises.
Reporter: Are there any differences between sovereign and non-sovereign loans, sir?
Mr. Fabrice Richy: These types of loans are not fundamentally different in terms of the grace period and repayment duration. However, a difference can be seen in interest rates. Interest rates of sovereign loans are lower. As for non-sovereign loans, there must be a part to secure the loans. This is a mandatory condition for AFD to bear risks and secure loan repayment.
Currently, AFD has a total outstanding balance of about EUR 350 million for EVN, of which about half are sovereign loans with the Government’s guarantee.
Since about 4 years ago, the Vietnamese Government has temporarily not performed re-lending foreign sovereign loans to large enterprises like EVN. Therefore, it is essential for EVN to have favorable financing conditions coming from non-sovereign loans. It can be said that AFD opened a new path in the cooperation with EVN and this path will be very long for both parties to go together.
A non-sovereign loan is a new form of financing, allowing EVN to obtain more loans with very favorable financing conditions without aggravating the Government's public debt burden. EVN is one of the pioneers in this field.
Reporter: How do you rate EVN's loan repayment progress in recent years?
Mr. Fabrice Richy: From AFD’s perspective, EVN has always got a good credit score and financial issues are not our concern at all. Therefore, AFD can give EVN very preferential loans. AFD is happy to be able to support EVN in the past 20 years and in the future.
Reporter: Thank you sir!