The International Finance Corporation ( IFC ), the private investment arm of the World Bank Group, will invest 500 billion dong ( US$19.2 million ) to help accelerate the digital transformation of Vietnam’s road infrastructure.

The investment, the IFC states, comes via its subscription to a five-year convertible bond, enabling VETC – Vietnam’s leading electronic toll collection ( ETC ) system operator, which has a 75% market share of the ETC sector – to significantly expand its system coverage across toll roads in the country by 2030.

The funding will also support VETC in diversifying its offerings to include other transport-related digital payment services, such as e-parking, airport entrance fees and cashless fuel station transactions, and enable it to scale operations, enhance connectivity and road safety, and improve efficiency for millions of road users.

The deal comes as Vietnam is set to further transform its road infrastructure and urban mobility landscape through the expanded adoption of cashless tolling and other transport-related digital payment services.

Bold government plans for expressways

Road transport connects the majority of the nation’s passenger and freight traffic, and is currently undergoing significant expansion and modernization thanks to substantial investment and ambitious government plans to add over 5,000 kilometres of expressways by 2030 and an additional 9,000 kilometres by 2050.

Rules in 2022 requiring ETC systems on all expressways have further accelerated the adoption of digital tolling across the Southeast Asian nation.

Since ETC introduction in Vietnam in 2015, its usage has surged, according to Vietnam’s Ministry of Transport, with the annual volume of transactions almost doubling each year from 2019 to 2023.

This rapid adoption of ETC, the IFC notes, has greatly reduced travel times, eased congestion, lowered fuel consumption and decreased greenhouse gas emissions, resulting in nearly US$1 billion in economic savings over this five-year period.

“As Vietnam’s economy continues its strong growth trajectory and its role in global supply chains expands, the need for efficient and sustainable infrastructure is crucial,” says Katherine Koh, the IFC’s regional industry manager of infrastructure and natural resources for Asia-Pacific. “The expansion of ETC and the digitalization of vehicle-related payment services will not only enhance mobility and improve the capacity and efficiency of road transport infrastructure, it will also deliver environmental benefits by reducing congestion and greenhouse gas emissions associated with road traffic.”

Nguyen Le Thang, VETC’s CEO, adds: “This pivotal investment from the IFC enables us to accelerate the deployment of advanced ETC systems, delivering unmatched efficiency, cost savings and environmental benefits to road users. Beyond toll collection, we are laying the groundwork for a smarter, greener and more connected mobility future, creating significant economic and social value for our country.”