The U.S. Export-Import Bank and the government of Vietnam signed an agreement June 14 that would offer $500 million in Ex-Im financial backing for sales of U.S. equipment and services for high-priority infrastructure projects in that country.
Fred P. Hochberg, Ex-Im Bank’s chairman and president, signed a memorandum of understanding in Hanoi with Vietnam Development Bank General Director Nguyen Quang Dung.
The U.S. export finance agency already has an exposure in Vietnam totaling $231 million. Hochberg said the new agreement “is a continuation of the increasingly close ties that have been established between our countries starting in 1995.” That is also part of a broader supply chain shift this year between the U.S. and Asia.
Hochberg also said the accord reflects U.S. readiness to supply projects in transportation including highway and rail projects, communications, renewable energy and other types of power, plus other sectors.
Ex-Im Bank did not detail the provisions of the large new finance facility, but the agency’s portfolio includes loan guarantees for commercial credits, export-credit insurance and direct loans. It tends toward loan guarantees to facilitate private bank loans, and makes enough money off its financing efforts to pay for its operations and send money back to the U.S. Treasury.
A spokesman said although this facility would triple Ex-Im Bank’s credit exposure in Vietnam, Hochberg told Vietnamese officials the agency would consider increasing the amount depending on how well things go, without setting a cap.
“It’s a real opportunity for U.S. exporters to take advantage of an economy that is about ready to explode” in its growth and development, the Ex-Im spokesman said. Some of the first credits under the new facility could come later this year, perhaps related to Vietnam’s highway infrastructure projects, he said.
This is the latest in a series of U.S. trade-finance agreements with Vietnam, which follow broader trade accords between the two countries. Their new understanding also has the U.S. agency and the Vietnam Development Bank agreeing to share information on trade and business opportunities, to facilitate sales of U.S. equipment and services there.
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