HCMC approves bond issuance to fund infrastructure, targets VND49.3 trillion deficit by 2030

Ho Chi Minh City's People's Council has approved financing mechanisms allowing the city to issue municipal and project bonds through the Vietnam International Financial Center (VIFC) to fund major infrastructure. The city expects to borrow up to VND49.291 trillion (US$1.9 billion) between 2026 and 2

Ho Chi Minh City has secured approval to issue bonds through the newly established Vietnam International Financial Center (VIFC) to finance major infrastructure projects, the municipal People's Council decided at a special session on 30 Oct. The resolution allows the city to diversify funding sources by issuing municipal and project bonds denominated in Vietnamese dong or freely convertible foreign currencies.

Under the proposal submitted by the municipal People's Committee, foreign investors can purchase the bonds, while foreign-affiliated organisations may provide underwriting, advisory and other financial services. Offerings can be made publicly or privately through underwriting, auctions, agents or direct sales. The financial centre's infrastructure will handle bond registration, custody, settlement, transfer, listing and trading.

Proceeds must be centrally managed and used for designated projects in the city's medium-term public investment plan that have completed required investment procedures. The municipal budget will guarantee timely repayment of principal, interest and other legally incurred expenses. For foreign currency-denominated bonds, the city must consult the State Bank of Vietnam and relevant authorities on cash flow management, accounts, settlement, registration, reporting and risk management.

Alongside VIFC bond issuance, the People's Council authorised the city to raise domestic capital through five types of bonds: local government, project, infrastructure construction, municipal and green bonds. It can also borrow from domestic financial institutions. Local government bonds must be denominated in dong and have maturities of at least one year, with interest rates set in line with the Ministry of Finance's framework and market conditions.

HCMC expects to borrow up to VND49.291 trillion (US$1.9 billion) between 2026 and 2030 to finance its budget deficit. Domestic borrowing, primarily through local government bonds, is expected to account for VND31.732 trillion, with the remainder coming from loans on-lent by the central government. Separately, the city's priority list for public-private partnership (PPP) investment in 2026–2031 includes 90 projects with an estimated total investment of VND1.27 quadrillion, covering transport, urban railways, urban redevelopment, environmental protection, flood control, digital transformation, energy, logistics and social infrastructure.

Nguyen Huu Huan, vice chairman of the executive agency of VIFC-HCMC, said international fundraising required coordinated planning, financial discipline, project preparation and a functioning legal framework. The newly adopted resolution provides a legal basis for the city to prepare its first bond issuance through the VIFC, he added. HCMC plans to select several pilot projects for bond issuance through the VIFC in the initial phase, with the centre and relevant municipal agencies identifying suitable projects.