Hanoi is poised to receive greater financial flexibility for key infrastructure projects, as Vietnam’s State Bank (SBV) considers revisions to lending regulations. The proposed changes would allow banks to extend credit beyond existing limits for large-scale, strategically important developments within the capital city, a move intended to address significant capital demands and accelerate economic growth. This comes as Vietnam aims for ambitious economic targets outlined in a recent resolution focused on Hanoi’s development through 2065.
Currently, Vietnamese law restricts lending to a single customer to 13% of a bank’s equity capital, a figure set to decrease to 12% next year. Lending to a customer and its affiliated entities is capped at 21%, falling to 19% in 2025. The SBV’s draft amendment, however, proposes raising those limits to 38% and 52% respectively for projects deemed critical to Hanoi’s development, as defined by Resolution No. 258/2025/QH15 of the National Assembly. This shift reflects a growing recognition that existing financial constraints may hinder the realization of vital infrastructure initiatives.
The move isn’t unprecedented. The Vietnamese government has previously authorized banks to exceed lending limits for nationally significant projects, including the Son La and Lai Chau hydropower plants, the Vinh Tan 4 thermal power plant and most recently, the Quang Trach 1 thermal power plant. The same elevated lending thresholds – 38% for individual borrowers and 52% for connected groups – were applied to the Quang Trach 1 project, demonstrating a precedent for this type of intervention. The SBV has stated that the proposed 38% and 52% thresholds are based on a review of past implementations.
Vietnamese banks possess substantial lending capacity under the proposed model. According to data from the SBV, Vietcombank and VietinBank, with equity exceeding 222.72 billion VND and nearly 229.18 billion VND respectively, could potentially lend up to 87 trillion VND to a single customer and 119 trillion VND to a group of affiliated borrowers. This capacity is particularly relevant given that several key projects in Hanoi require a total investment of around 300 trillion VND, with financing needs reaching approximately 255 trillion VND – representing 85% of the total cost.
Hanoi’s Growth Ambitions Fuel Demand for Capital
The proposed changes align with Resolution 02-NQ/TW, a policy document from the Politburo outlining a long-term vision for Hanoi’s development. The resolution sets ambitious goals, including an average annual GDP growth rate exceeding 11% between 2026 and 2030, and a GDP surpassing 113 billion USD with a per capita income of at least 12,000 USD by 2030. Achieving these targets necessitates significant investment in large-scale projects, and the ability to mobilize capital efficiently is seen as crucial.
These projects are expected to act as a catalyst for attracting public-private investment, further accelerating economic growth. The government hopes that easing lending restrictions will create a ripple effect, encouraging both domestic and foreign investment in Hanoi’s infrastructure.
Ring Road 4 Project Highlights Infrastructure Needs
The demand for increased funding is already evident in ongoing infrastructure projects. Recently, Agribank, along with MB, BIDV, and MBV, signed a credit agreement to finance the construction of Ring Road 4, a major transportation project in the Hanoi Capital Region. The project carries a total investment volume exceeding 85,000 billion VND, with the highway component being developed through a public-private partnership (PPP) with an investment of over 53,000 billion VND.
Doan Viet Nam, Deputy General Director of BIDV, emphasized the continued importance of bank lending in financing investment projects, particularly large-scale infrastructure developments. He noted that a flexible approach to capital mobilization – combining capital markets, project financing, and international funding sources – is essential for providing a solid financial foundation for these projects. According to Thoi Bao Ngan Hang, BIDV plans to expand its capacity to finance large projects, develop value chain financing solutions, and strengthen its connections to international financial institutions like the World Bank, the Asian Development Bank (ADB), the Green Climate Fund (GCF), and the French Development Agency (AFD).
Reforms to Public-Private Partnerships and Debt Management
Beyond easing lending restrictions, Vietnamese officials are also exploring broader reforms to attract private investment. Representatives from BIDV have suggested improvements to the PPP mechanism and government guarantees for key national infrastructure projects. They advocate for a more robust legal framework for PPPs, including mechanisms to ensure minimum revenue guarantees, thereby increasing the appeal for private sector and international investors.
The Ministry of Finance is also preparing to propose a comprehensive amendment to the Law on Public Debt Management to the National Assembly this year. Pham Thi Thanh Tam, Deputy Director of the Department of Financial Institutions at the Ministry of Finance, stated that the goal is to create a more open legal framework for raising capital through government bonds. Simultaneously, efforts are underway to improve the country’s credit rating to facilitate proactive and cost-effective access to international capital markets.
A reform of the PPP mechanism is also proposed, aiming to make it a more effective tool for mobilizing non-budgetary capital for infrastructure projects through a transparent and attractive mechanism for sharing profits and risks. The Ministry of Finance is also focused on developing the capital market to provide medium- and long-term capital, aiming for a stock market capitalization of at least 100% of GDP by 2026.
The proposed changes to lending regulations, coupled with broader reforms to attract private investment and improve debt management, signal a concerted effort by the Vietnamese government to unlock capital for critical infrastructure projects and achieve its ambitious economic goals for Hanoi. The SBV’s draft amendment is currently under consideration and is expected to be finalized in the coming months. The National Assembly will then review and vote on the proposed changes, with implementation anticipated later this year.
Disclaimer: This article provides information for general knowledge and informational purposes only, and does not constitute financial or investment advice.
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