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Banking & Finance

IFC buys Phu My Hung's bonds to support township development

Released at: 10:37, 26/09/2019

IFC buys Phu My Hung's bonds to support township development

Photo: Phu My Hung

Developer receives investment to promote economic and township development in Vietnam's secondary provinces.

by Hong Nhung

The IFC, a member of the World Bank Group, is supporting the Phu My Hung Development Corporation to expand housing projects to secondary provinces in Vietnam, improving access to quality housing as well as education and healthcare services for local residents. The aim is to promote integration and inclusive growth around Vietnam.

It has subscribed to around $75 million in bonds issued by Phu My Hung, an established real estate developer in Vietnam with a focus on supplying quality housing stock to an emerging population of middle-class citizens. The proceeds will be primarily used to develop an integrated township in rural Hoa Binh province over the next 15-20 years.

Rurally located with limited transportation infrastructure 60 km west of Hanoi, the Phu Hung Khang township will provide over 1,000 new homes, two schools, and a hospital upon on completion. A 75-room hotel will also be built to tap into the area’s tourism potential. The project is expected to create more than 1,000 jobs for local communities, including ethnic minorities, providing opportunities to diversify income sources in addition to agriculture.

“With this investment, we are now well-positioned to focus on developing new integrated townships in a number of secondary provinces, starting with Phu Hung Khang township, as part of a sustainable growth model,” said Mr. Gary Tseng, CEO of Phu My Hung.

“We believe the model of the New City Center - an urban township located in District 7 of Ho Chi Minh City and recognized by the Harvard Business Review as a sustainable city with efficient water, power, and transit solutions - can and should be replicated. Longer term, we see this as an opportunity to develop a strategic relationship with the IFC to set higher market standards as Vietnam’s real estate sector continues to evolve.”

To promote sustainable urbanization, the IFC will support the company to adopt environmental and social best practices, including community development and livelihood restoration. The project will also apply the IFC’s Excellence in Design for Greater Efficiencies (EDGE) green building certification system, to reduce the consumption of energy, water, and embodied energy in materials by at least 20 per cent compared to similar housing projects. 

“This investment will deliver quality and climate-friendly accommodation to people working in and around Hanoi, thus easing the pressure on the fast-growing capital and provide jobs and income for local communities,” said Mr. Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Laos.

“The IFC’s financing for one of the first multi-phase projects in a secondary province showcases its catalytic role in promoting private sector participation in rural development and inclusive growth.”

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