What's next?

Final words

Although the need for high-quality modern infrastructure in Vietnam continues to grow steadily, the legal environment underpinning projects is becoming increasingly complex and nuanced. In particular, the PPP Law has introduced a number of changes that will have a material impact on projects. This includes those that were already in advanced development stages before its effectiveness. The changes have not yet been tested, and it will take time to see how these play out in practice.

The policy position enshrined in the PPP Law is that private investors and lenders ought to share more risk with the state. Put another way, the Government's position is that, as Vietnam and its legal system and markets mature, the Government should have less responsibility to backstop project feasibility. While this is a reasonable position, it remains an open question whether the market will accept it; and, just as importantly, how positions will develop between lenders seeking certainty and sponsors seeking to develop and operate projects that stand or fall on their own merits, without recourse to parent company balance sheets.

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