ADB Loans Vietnam US$776Mln in 2005-2006

3:26:19 PM | 7/8/2005

ADB’s Board of Directors has recently approved its Country Strategy and Programme Update for 2005-2006 to lend Vietnam US$776 million in the next two years. According to Mr. Bradford Philips, Country Director for Vietnam, Vietnam’s prospects in the short and medium term are healthy. “Endowed with natural resources, enterprising people and located between two huge markets – ASEAN and China, Vietnam has great potential for further economic growth and poverty reduction,” he added. In fact, the Vietnamese economy recorded a growth rate of 7.1 per cent in 2003 against 6.4 per cent in the previous year.

The loan includes the annual commitment of US$178 million from the Asian Development Fund (ADF) for sustainable development in poor countries, members of ADB, and US$210 million from ADB’s ordinary capital resources (OCR). The loan also includes US$79 million for sub-regional projects. However the final distribution of the loan depends on capital resources and the actual implementation of projects in concerned countries. In addition, ADB will find co-financing or grant aids from development partners for prioritised projects.

ADB’s Country Strategy and Programme (CSP) of 2002 targeted poverty reduction through a better growth rate and employment of the private sector, the diversification of agriculture and capacity building. CSP has also concentrated on comprehensive social development with an emphasis on Central Vietnam, a region with a high poverty rate.

10 projects planned for 2005-2006:

n 4 projects in Central Vietnam for the improvement of living conditions and supporting rural and urban infrastructure, transport and water resources.

n 2 projects on infrastructure, including loans for the development of the power distribution network.

n Loans for social development, including an educational project and a project on preventive medical services.

n Loans for the development of small and medium sized enterprises.

n Loans for the development of science and technology in the agricultural sector.

The two-year programme also includes three sub-regional projects for the Greater Mekong Sub region (GMS) for controlling communicable diseases, developing the Kunming-Haiphong corridor and upgrading the Hanoi-Lao Cai Railway.

In addition, ADB plans to provide technical assistance grants amounting to about US$5 million every year for capacity building, project preparation, sector analysis and institutional development.