"Relaxing the ceiling" on outstanding credit for transportation PPP projects.

Regulations on credit limits are becoming a major barrier to accessing credit for the implementation of transportation infrastructure projects invested under the public-private partnership (PPP) model.

Developing transportation infrastructure has been identified as one of the three strategic breakthroughs of the Party and the State. According to the set targets, by the end of this year, Vietnam will complete 3,000km of expressways and 1,000km of coastal roads, and by 2030, the total will reach 5,000km.

In addition, the railway sector is a strategic priority for the period 2025-2035 with a total investment of approximately 68 billion USD.

These ambitious goals require the active, proactive, and coordinated participation of many resources. In reality, budgetary resources are limited, but the need for investment in transportation infrastructure is increasingly urgent, making the contributions of the private sector and society even more important.

In this context, investment through the PPP method plays a leading role in realizing large-scale projects.

Transport infrastructure PPP projects are characterized by large total investment amounts (from VND 10,000 to VND 40,000 billion per project), a long payback period of 15-25 years, and a heavy reliance on credit financing (70-85%). The loan capital requirement for some projects ranges from VND 8,000 to VND 33,000 billion per project.

Meanwhile, according to Clause 1, Article 136 of the Law on Credit Institutions No. 32/2024/QH15, effective from July 1, 2024, the limit on the total outstanding credit granted to a single customer is reduced from 15% to 10%, and to other groups from 25% to 15% of the credit institution's equity capital in the years 2026-2029.

Cam Lam-Vinh Hao Expressway.

This has led to the current situation where, although banks are interested in financing large-scale transportation projects, they are hampered by regulations that prohibit them from granting credit exceeding 10% of their own capital. This credit limit creates a significant barrier to accessing credit for the implementation of transportation infrastructure projects.

To address the credit limit problem, a syndicated loan scheme between banks has been implemented.

However, practical implementation has shown that this syndicated loan model also faces many difficulties, especially since each bank has its own regulations and standards regarding syndicated loan conditions.

Furthermore, lengthy loan appraisal times are also a hindering factor, leading to projects not being implemented as planned, causing losses and waste of resources.

The aforementioned difficulties and obstacles are inconsistent with the spirit of Resolution 02/NQ-CP dated January 8, 2025, on removing institutional bottlenecks, simplifying administrative procedures, and creating favorable conditions for businesses, as well as Resolution 172/2024/QH15 on the investment policy for the high-speed railway project on the North-South axis and Resolution 1454/QĐ-TTg on approving the road network plan for the period 2021-2030, with a vision to 2050, all of which emphasize the importance of attracting non-budgetary capital and creating conditions for the private sector to participate in large-scale infrastructure projects.

Regarding the aforementioned difficulties and shortcomings, from an expert's perspective, Associate Professor, Dr. Nguyen Huu Huan, a member of the Executive Board of the Vietnam Finance-Banking Association, commented that currently, bank credit remains the main source of capital for implementing infrastructure projects. This is because the investment capital is too large, and investors or contractors lack sufficient financial resources, forcing them to borrow from external sources.

Given the difficulties that businesses are facing in accessing bank capital, Mr. Nguyen Huu Huan suggested that the loan process needs to be improved to ensure risk management while simplifying procedures and providing faster support to businesses.

From an investor's perspective, Mr. Nguyen Huu Hung, Vice Chairman of the Board of Directors of Deo Ca Group, stated: “Deo Ca is a pioneering enterprise in the PPP field, having completed many large and key projects in the transportation sector. In the new era, Deo Ca clearly defines its role and responsibility in proactively and actively collaborating with domestic enterprises, mobilizing resources, in which credit capital plays a crucial role, to work with the Government to achieve major goals in transportation infrastructure development.”

The Bac Giang- Lang Son expressway is being developed using the PPP (Public-Private Partnership) method.

According to Mr. Hung, in order to resolve the obstacles and difficulties related to the credit limit for PPP projects, the enterprise recently sent a written request to the State Bank of Vietnam, the Ministry of Finance, and the Ministry of Construction proposing solutions to overcome difficulties and obstacles in mobilizing investment capital for transportation infrastructure projects under the PPP method.

Specifically, Deo Ca proposed that relevant agencies suggest to the Prime Minister that infrastructure projects implemented under the PPP method be allowed to apply the following special mechanism: “The portion of capital borrowed from credit institutions to invest in infrastructure projects under the PPP method will not be subject to the provisions of Clauses 1 and 2, Article 136 of Law No. 32/2024/QH15 dated January 18, 2024. The specific loan amount will be determined by the credit institutions, based on the financial capacity of the investor and the project's repayment plan.”

At the same time, businesses also suggested that the method of defining "related parties" in credit limits needs to be reconsidered. This regulation is not suitable for the specifics of PPP investment, where investors only contribute a portion of the capital to the project enterprise, but are charged the entire credit obligation of the project enterprise in their own credit limit, leading to a significant narrowing of their ability to access credit for implementing large-scale infrastructure projects.

The Nui Vung tunnel project is part of the eastern section of the North-South expressway.

To realize the goal of developing a modern and integrated transportation system, we cannot rely solely on the state budget. The participation of the private sector through the PPP model is a prerequisite.

But without a stable, timely, and effective flow of credit, all plans will remain just on paper.

According to one economic expert, credit limits are a technical measure, but they should not be rigidly imposed in a way that hinders economic development.

A new, flexible, courageous, and responsible mindset is needed to design a specific credit mechanism for PPPs. Only by removing the "bottleneck" of capital can we open the "highway" for infrastructure development, unleash growth momentum, connect regions, and contribute to the country's rapid progress.

Resolution No. 68-NQ/TW of the Politburo on the development of the private economy, issued on May 4, 2025, emphasizes the task of "diversifying and improving the effectiveness of cooperation forms between the State and the private economic sector through PPP models." At the same time, it clearly states the requirement to promote and diversify capital sources for the private economy: "Review and improve credit mechanisms and policies for the private economy. Prioritize a portion of commercial credit resources for private enterprises…".

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Source: https://nhandan.vn/noi-tran-du-no-cap-tin-dung-cho-cac-du-an-ppp-giao-thong-post884982.html