Hanoi, Vietnam (TAN): IFC, a member of the World Bank Group, is providing a loan of up to USD 87.5 million to BIM Land Joint Stock Company, a leading property developer in Vietnam, to support the growth of sustainable tourism infrastructure in Vietnam and Laos, said an official statement.
This will attract an increasing number of domestic and international tourists, thereby creating jobs and bolstering local economies.
Tourism is one of the key growth drivers for both countries. In 2018, Vietnam recorded 15.5 million foreign visitors and Laos attracted approximately 4.2 million international arrivals. However, when compared with Thailand, which receives 38 million visitors annually, both Vietnam and Lao PDR have significant potential for further growth, the statement said.
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One of Laos’ significant challenges is the lack of quality accommodation facilities in its capital Vientiane, the capital and gateway for most international tourists. Similarly, in Vietnam, the underdevelopment of emerging tourist destinations like Phu Quoc Island and Ha Long Bay can hinder the nation’s growing tourism. Considering these issues, IFC’s long-term funding will be critical to enhance the quality of tourism infrastructure in both the countries, attracting repeat visits and encouraging tourists to stay longer.
“We value IFC’s extensive experience and expertise drawn from its global portfolio of tourism projects,” said Doan Quoc Huy, CEO at BIM Land. “As part of this project, BIM Land will add a significant number of international quality hotel rooms or serviced apartments — more than 1500 — in Vientiane, Ha Long Bay, and Phu Quoc Island. Moreover, the project scale and scope in Phu Quoc Island is expected to set new environmental and social standards in the property sector, attracting a new category of domestic and international tourists.”
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IFC’s financing package to BIM Land and its subsidiaries consists of a loan of up to USD 50 million from IFC’s own account and a trust loan of up to USD 37.5 million from the multi-investor Managed Co-Lending Portfolio Program (MCPP) managed by IFC. At least USD 10 million of this financing package will be dedicated to developing tourism in Lao PDR.
The project is expected to create approximately 1,400 jobs — 60% for women. Apart from local hiring and a relatively higher wage, the project will source around 90 percent of its goods and services locally. IFC will also share best practices to help the company enhance its performance.
In addition, in pursuit of a green and sustainable tourism business, BIM Land has committed to applying IFC’s Excellence in Design for Greater Efficiencies Green Building Certification System (EDGE) in its new hotels to be developed under this project with the aim of reducing energy, water, and material consumption by at least 20 percent compared with similar buildings.
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“The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for developing countries,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos. “In alignment with government’s efforts, IFC’s loan to BIM Land will help create higher skilled job opportunities for the local workforce in Lao PDR and Vietnam, thereby strengthening supply chains, driving inclusive growth and enabling private sector participation.”
IFC, a sister organization of the World Bank and member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.
