The state-owned Government Savings Bank (GSB) is eyeing a 50-60% share of the loans to fund 350 billion baht worth of water management projects, says president Voravit Chailimpamontri.
The government plans to invest in flood control and other projects by borrowing 350 billion baht from local financial institutions.
The projects include infrastructure such as water-retaining monkey cheeks (kaem ling), floodways and dams.
Under the borrowing decree approved by the cabinet, the Finance Ministry is allowed to borrow new funds for the projects this month.
The GSB has so far won the bidding for 120 billion baht out of a total of 200 billion baht organised by the Public Debt Management Office.
Therefore it expects to win at least 50% of the total amount of lending for the projects.
As for the interest rate charged by the GSB, Mr Voravit said it should be around 3% as the PDMO will renegotiate with the bank.
"Under that rate, it is on par with the bank's 12-month fixed deposit rate of 2.75%. This rate is quite competitive," he said.
"The bidding of the loan doesn't mean that the client can obtain loans right after the deal is signed, but it depends on the investment plan of each project. We are expecting they will gradually request loans of 30-40 billion a year until 2016."
According to Mr Voravit, the GSB this year plans to add 300 billion baht in new loans to its portfolio, of which 100 billion baht will go to water management, the rice pledging scheme and other state projects, while 200 billion will be for the bank's normal activities.
In another development, Mr Voravit yesterday announced the formation of the Government Financial Institution Council, chaired by the president of the GSB.
The council was established to tighten collaboration between the state's special-purpose financial institutions, upgrade their efficiency and reduce their costs.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter