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Firms turn their backs on soft loans for environmental protection projects

22 August 2014 | 08:30:00 AM

Very few businesses have shown interest in HCM City’s preferential loans for environmental protection projects.


The city’s Environmental Protection division, which is part of Department of Natural Resources and the Environment, committed to provide the loans to any legal entity or organization to implement projects that use new technology to make environmentally friendly products, or to those who would reuse and recycle paper and plastic.


Businesses can also borrow money to invest in pollution control (waste water, solid waste and emission treatment systems) for their environmental services (garbage collection, transportation and waste treatment), or for power saving, clean production, nature conservation and biological diversification.

The city’s financial support requires the companies provide mortgaged assets or a guarantee from a third party.

The value of the loans will be determined by HEPF after it considers the collateral for the loans and the project’s scale.

However, in all cases, the value of the loans will not be higher than 70 percent of the total investment capital of the projects. And the value of the loans to be given to one investor will not be higher than 15 percent of HEPF’s capital. These medium-term loans would last for up to five years, with a preferential interest rate of a maximum 5.5 percent.

The commercial interest rate at which enterprises have to borrow from banks for their business plans is now at 10-12 percent per annum.

The ceiling interest rate of 5.5 percent may be adjusted in reference to the interest rates to be set up by the State Bank.

The HEPF representative said borrowers would enjoy three big benefits if joining the program.

First, they can access loans at good interest rates. Second, their investment projects can target all the economic, environmental and social effects.

And third, they can polish their image in environmental protection activities.

However, despite the promising great benefits, businesses have been indifferent to the preferential credit program.

HEPF reportedly had separate meetings with a number of restaurants, hotels and office buildings to introduce the program. District authorities have shown the lists of the agencies and businesses that need to improve their environmental conditions, which comprises 300 units.

However, only 20 representatives of the agencies and businesses were present at the workshop on the financial support held in early August.

Such a modest number of participants indicates that businesses have paid not paid sufficient attention to environment issues and raised doubts about the program’s feasibility.

An observer said that businesses do not care about environmental protection projects unless they are a must for their operations.

Source: VietNamNet Bridge

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