Vietnam project financing guide

By Giles Cooper, Ngoc Anh Tran, Linh Bui, Dang Vu
Project Finance Vietnam

Critical legal and commercial considerations for foreign lenders and sponsors

Project finance is the financing of capital-intensive infrastructure projects relying on the project's own cash flow/assets for repayment. Project financing falls along a spectrum of non-recourse to full recourse depending on identification and assessment of project-specific risks.

In Vietnam, non-recourse project finance is limited due mainly to difficulty ringfencing regulatory and commercial country risks. Nevertheless, market practices have developed that limit sponsor exposure in certain cases.

In this guide, we examine project financing, highlighting critical legal and commercial considerations from the standpoint of foreign lenders and sponsors. Our focus is on power sector project finance because it has featured in the majority of project finance activity in Vietnam, but many of the principles apply equally to projects in other sectors.