Illustrative image.

Located roughly 60 kilometers outside of Ha Noi in the northern province of Vinh Phuc, the Vinh Phuc Inland Container Depot (ICD) Logistics Center (Viet Nam SuperPort) project will be developed by T&Y Superport Vinh Phuc Joint Stock Company, a joint venture between leading Singaporean logistics company YCH Group and Vietnamese conglomerate T&T Group (the sponsors).

The project will be one of the country's first ICDs with multimodal facilities, including an international distribution center and an inland port for rail connectivity and air transportation.

The establishment of such a logistics hub in North Viet Nam will significantly improve the processing of domestic and international trade, reducing logistics costs and improving the country's trade competitiveness as it aims to become a new regional supply-chain hub.

Over the next 12 months, IFC, the largest global development institution focused on the private sector in emerging markets, will help YCH Group and T&T Group develop a bankable and sustainable project by providing technical expertise, helping the developers mitigate risk and strengthen environmental and social standards.

IFC will also support the sponsors in making the logistics hub's infrastructure green and sustainable, supporting Viet Nam in its efforts to reach its net-zero carbon emissions target by 2050.

IFC also has the right to act as lead arranger of long-term financing for the Viet Nam SuperPort. Total investment capital for the project is expected to be around US$300 million.

The agreement marks an important milestone in the relationship between IFC and YCH Group as the logistics company expands its regional network in Southeast Asia.

The signing ceremony with IFC is yet another significant milestone for the entire connectivity initiatives of which YCH Group intends to invest more than US$2 billion in the next five years to enhance ASEAN connectivity to improve intra-ASEAN trade, as well as trade with the rest of the world, said Executive Chairman of YCH Group Robert Yap.

The Viet Nam SuperPort is strategically located near local ports, Noi Bai International Airport, and border posts with China and Lao PDR. It is also situated within reach of 20 industrial parks, enabling it to become a supply-chain hub for local manufacturing operations.

The facility is expected to capture roughly 10 percent of the total container traffic generated in the country's northern provinces once it comes into operation.

It will help improve the efficiency of Viet Nam's logistics sector and reduce the cost of logistics services, which remain high in Viet Nam, accounting for 21 percent of its gross domestic product in 2019, compared to less than 10 percent in OECD countries.