A draft resolution on special mechanisms and policies tailored to this major infrastructure project has been completed and submitted to the Ministry of Justice for review.

Up to 30-year loans at 0% interest

One of the most notable proposals involves preferential financial policies. For projects developed under a business investment model, the government would provide loans covering up to 80% of the approved investment capital (excluding contingency costs), with a minimum interest rate of 0% and a repayment period of up to 30 years from the date of the first disbursement.

Investors would be required to repay the full amount within 30 years.

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Multiple financial incentives proposed to support investors in Vietnam’s high-speed railway project. Photo: TL

For public-private partnership (PPP) projects, the state capital contribution would not exceed 80% of the approved total investment.

Vietnamese commercial banks would be exempt from credit exposure limits on loans to investors under this scheme. These loans would also not count toward the banks’ total credit exposure for those borrowers.

Investors would also be exempt from import duties on machinery, equipment, railway vehicles, spare parts, and materials that serve the construction, renovation, maintenance, or operation of the railway infrastructure - provided such items cannot be produced domestically or do not meet technical specifications.

The draft also outlines a revenue risk-sharing mechanism for PPP investors. Specifically, for the first three years after operation begins, the government would cover 100% of the revenue shortfall between actual income and the revenue forecast in the financial plan.

The shortfall would be paid from state budget surpluses, unused central budget allocations, or annual public investment plans. From the fourth year onward, revenue-sharing would follow standard PPP investment laws.

The maximum project payback period would be capped at 70 years.

Investor obligations and restrictions

According to the draft, once an investment registration certificate is issued, investors must submit a detailed implementation schedule, capital mobilization plan, and disbursement roadmap for approval before starting construction.

Disbursements must comply with the registered capital contribution plan, with each disbursement phase contributing no less than 20% of the scheduled amount until the investor’s equity share is fully paid.

If an investor fails to mobilize capital on time or misuses government loans, and fails to rectify the issue upon request, the investment license may be revoked. In such cases, the investor would be liable for all resulting damages and costs.

If an investor is suspended or terminated due to national security risks, substandard construction, or failure to meet safety standards, they would not be eligible for compensation.

To safeguard public funds, investors would be required to provide collateral for state-backed loans. After project completion, this would include project-formed assets, which cannot be pledged or mortgaged to finance other ventures.

Investors would also be prohibited from altering key project parameters such as track gauge, design speed, or load capacity during execution.

Additionally, investors in business or PPP models must prioritize using domestic products and services when available and suitable. Foreign partners would be required to transfer technology, train local personnel, and gradually build local capacity in operations and maintenance.

Tam An