AFD Finances 100 Mln Euro Vietnam’s Public Investment Reform

Mr. Tran Xuan Ha, Vice-Minister of Finance and Mr. Jean-François Girault, Ambassador of France in Vietnam have signed on March 29, 2010 a financing agreement worth for the program "Public Investment Reform”, announced French Embassy in Vietnam.

 

The loan of 100 millions euros has been granted by AFD and is a part of a co-financing with the World Bank. This project concurs with France’s cooperation orientations with Vietnam.This budget support is intended to help the Vietnamese government to finance its economic recovery plan, but it is also accompanied by reforms to improve efficiency and transparency of public investment.

 

This two year program is primarily to assist the Vietnamese Government to finance its economic recovery plan aimed at reducing the effects of the economic crisis that hit the country at the end of 2008. Budget support AFD consists of a sovereign concessional loan of 100 million euros for the Vietnamese Ministry of Finance who shall be assigned to the state budget. The contribution of the World Bank amounted to 500 million dollars in concessional loan and the financing agreement has been signed with the SBV to the end of 2009.

 

The budgetary support from the World Bank and AFD also aims to improve the efficiency and the environmental and social impact of public investment. Indeed, being one of the highest investment rates in the world and facing infrastructures considerable needs in the coming years, Vietnam has to to strengthen the effectiveness of public investments and to reform the project-cycle of its public investments.

 

The "Public Investment Reform" Program, with the adoption of reforms, aims to improve project preparation, the measure of environmental and social damages, to reform public contracts, to promote competition and transparency in the projects’ implementation, to reduce the fiduciary risk and conflicts of interest and to improve the regulation conducive to private participation in infrastructure financing.

 

The second component of the program will be implemented later in the year 2010. A second contribution of the World Bank and AFD to the Program is scheduled for the end of 2010.

 

Total net commitments of AFD for development projects in Vietnam will amount to 1,1 billion Euros.