International Finance Corporation (IFC), a member of the World Bank Group, said it is providing a financing package of $75 million to Vietnam-based real estate firm Phu My Hung Development Corporation to help sustain its operations in the wake of the COVID-19 pandemic.
The investment will allow Phu My Hung to extend financial relief to its clients, suppliers and contractors along its property value chain, “helping preserve jobs and contributing to a resilient local economy”, IFC said in a statement.
This bond marks IFC’s first COVID-19 response project in Vietnam. It comes under the Real Sector Crisis Response Facility, which will provide $2 billion globally to IFC’s existing clients in healthcare, infrastructure, manufacturing, agriculture and services industries to cope with the pandemic.
IFC has set aside $8 billion for COVID-19 fast-track financing to support the private sector and preserve jobs across the world.
The health crisis has disrupted the business of Phu My Hung’s clients, including lessees, homebuyers, suppliers and contractors.
Phu My Hung supplies housing mainly in Ho Chi Minh City and also leases office and retail space to more than 300 businesses, most of which are small and medium enterprises (SME).
“Leveraging IFC’s experience from past shocks, IFC aims to harness the private sector to limit economic damage. Supporting local businesses in times of crisis is crucial since they are the main drivers of employment in emerging economies,” said Vivek Pathak, IFC regional director for East Asia and the Pacific.
“IFC’s support, an effective response to help ensure resiliency, shows our confidence in local businesses as well as our commitment to restoring Vietnam’s economy to a sustainable growth path post-pandemic,” he added.
The loan for Phu My Hung came nearly a year after IFC subscribed to a 1.7-trillion-dong ($75-million) bond issuance by the Vietnamese firm. The proceeds were said to be primarily used to develop an integrated township in northern rural Hoa Binh province.
Phu My Hung’s housing projects in Vietnam’s secondary provinces aim to improve local residents’ access to quality housing as well as education and health-care services, IFC said.
Earlier this month, the World Bank Group’s private lending arm also proposed a $40 million financial package for Vietnamese commercial lender OCB, in order to support the bank’s trade-related lending program to SME in Vietnam who are affected by COVID-19.