Government leaders and experts and delegates at the workshop " Khanh Hoa - Realizing the vision of a centrally-governed city - Breakthroughs in the new era" - Photo: VGP/Thu Sa
Raising capital for Khanh Hoa: Proposing a new mechanism for project bonds.
At the seminar "Khanh Hoa - Realizing the Vision of a Centrally Governed City - Breakthroughs in the New Era," organized by the Khanh Hoa Provincial People's Committee in collaboration with Tien Phong newspaper on July 25th in Khanh Hoa, Mr. Nguyen Xuan Thanh, Lecturer at Fulbright University Vietnam, analyzed the limitations of the current financial mechanism and proposed new solutions for mobilizing capital to serve the socio -economic development of Khanh Hoa province.
Mr. Nguyen Xuan Thanh, Lecturer at Fulbright University Vietnam - Photo: VGP/HT
According to Mr. Nguyen Xuan Thanh, the State Budget Law stipulates that the ceiling for local public debt should not exceed 60% of the annual budget revenue that the locality receives. For Khanh Hoa, after the merger with Ninh Thuan , this limit is only about 15,000 billion VND. Meanwhile, the province's investment needs are very large. This figure is too small compared to the outstanding debt of approximately 300,000 billion VND that businesses and individuals are borrowing from the banking system, making it impossible for current resources to meet the goal of breakthrough development.
Mr. Thanh proposed that Khanh Hoa province implement a capital mobilization channel through the issuance of "project bonds," with the following key characteristics: these bonds are linked to specific infrastructure projects, capable of creating land funds and increasing land value. This type of bond is not considered a local government bond, is not included in public debt, and is not subject to the 60% limit under the State Budget Law. The bonds will be secured by land use rights generated from the infrastructure project.
The proposed implementation process is as follows: the province issues bonds to raise capital; this capital is used to build infrastructure and create clean, high-value land; after the project is completed, the province organizes an auction of the land; the proceeds from the auction will be used to repay the bondholders.
This mechanism helps localities avoid the situation of "selling land prematurely" (allocating land at low prices before infrastructure is in place), proactively mobilize capital, and take advantage of the added value from infrastructure investment. At the same time, it is a channel to attract institutional investors such as investment funds and insurance companies, reducing dependence on bank credit. This solution can be applied to public investment projects, PPPs, or private projects.
Professor Tran Dinh Thien, an economic expert, believes that Khanh Hoa, after merging with Ninh Thuan, possesses unique advantages. In addition to its traditional strengths, the province is growing in size. The two localities, which previously had distinct advantages, now not only combine but also synergize, creating a superior potential strength.
"Khanh Hoa needs to adjust or revise its development plan, re-selecting priority goals and breakthroughs to suit the new development structure after the merger. Setting high growth targets needs to be accompanied by an unconventional approach, not following the beaten path. In addition, the most important resource in the coming period is creative people and creative intelligence. Khanh Hoa needs to focus on developing high-quality human resources, combined with advances in artificial intelligence to create breakthrough development power," expert Tran Dinh Thien suggested.
Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors (State Bank of Vietnam) - Photo: VGP/HT
The bank is ready to partner with you in your growth strategy.
Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors (State Bank of Vietnam), emphasized the commitment to accompanying and providing credit capital to promote the economic development of Khanh Hoa in the period 2025-2030.
According to Government Resolutions 01 and 25, Khanh Hoa, after merging with Ninh Thuan, has been assigned GDP growth targets of 10% and 13% respectively for 2025. To achieve these two-digit targets, the State Bank of Vietnam (SBV) stated that it has implemented several synchronized measures: controlling inflation, reducing interest rates, simplifying loan procedures, and directing credit flows into priority sectors such as manufacturing, industry, energy, tourism, and urban development.
Furthermore, banking activities in Khanh Hoa province are currently quite vibrant, with 32 credit institutions and 53 first-level bank branches. As of the end of June 2025, total mobilized capital reached nearly 175 trillion VND, and total outstanding loans amounted to approximately 194 trillion VND. Although the mobilized capital only meets about 90% of the credit demand, the banking system still ensures capital needs are met through flexible allocation from its head offices. The scale of credit, including loans from outside the province, has reached nearly 300 trillion VND.
Furthermore, in implementing Resolution 01-NQ/TU of the Khanh Hoa Provincial Party Committee issued on July 14, 2025, on the goal of double-digit economic growth, the State Bank of Vietnam commits to continuing to prioritize credit for the four pillars of the economy: industry, energy, tourism and services, and urban development. Capital will also be focused on private enterprises, especially small and medium-sized enterprises, supporting industries, innovation, green transformation, and digital transformation.
"With the support of the banking sector, the decisive actions of the government, and the efforts of businesses, Khanh Hoa will successfully create a dynamic, modern, and sustainably developing economic center," the representative of the State Bank of Vietnam emphasized.
Mr. Nguyen Viet Cuong, Deputy General Director of Vietcombank, affirmed Vietcombank's commitment - Photo: VGP/HT
From the perspective of a commercial bank, Mr. Nguyen Viet Cuong, Deputy General Director of Vietcombank, affirmed Vietcombank's commitment to accompanying the development of Khanh Hoa. He highly appreciated the province's thorough preparation and strategic vision demonstrated through the workshop and introductory activities.
Mr. Nguyen Viet Cuong emphasized the decisive and scientific leadership role of Provincial Party Secretary Nghiem Xuan Thanh, former Chairman of Vietcombank. At the same time, Mr. Nguyen Viet Cuong highlighted Khanh Hoa's main potentials: marine economy and high-end tourism; seaports and logistics; clean energy; cultural and heritage tourism; abundant and trained human resources; and regional connectivity.
The Deputy General Director of Vietcombank affirmed that the bank has been accompanying major investors in Khanh Hoa from the beginning. Currently, the bank has the second largest outstanding loan balance in the province, approximately 30,000 billion VND. With a total outstanding loan balance of 1.6 million billion VND across the entire system, Vietcombank affirms its position as a leading bank, ready to support key projects in Khanh Hoa. In the coming time, Vietcombank plans to continue providing financial solutions and preferential credit packages, including a 500,000 billion VND package for infrastructure and digital technology.
"The bank will also cooperate with the province in attracting domestic and foreign investors, especially Vietcombank's large FDI clients. It is expected that total credit in Khanh Hoa will be increased to 70,000 – 100,000 billion VND in the coming years to meet the local development needs," a Vietcombank leader shared specific information.
Mr. Minh
Source: https://baochinhphu.vn/giai-phap-huy-dong-von-va-dong-luc-moi-cho-khanh-hoa-102250725153834388.htm
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