ADB, Vietnam Sign US$249 Mln Loan, Grant Agreements to Improve Water Services Delivery and Upgrade Roads

The Asian Development Bank (ADB) and the Government of Vietnam, on May 23, signed loan and grant agreements worth US$249 million to continue a project to bring piped water to more than 3 million people in six cities and provinces in Vietnam, and another project to improve road quality and safety with reduced HIV and human trafficking risks along the southern coastal route to Cambodia.

 

The first loan agreement provides US$212 million from ordinary capital resources (OCR) for the second tranche of US$1 billion multitranche financing facility for the Water Sector Investment Program approved in 2011, which is designed to support estimated 500,000 poor households to receive their first-ever piped water connection.

 

Under this tranche, water supply companies will implement subprojects, including the construction of water production plants, pumping stations, transmission and distribution pipelines to about 94,000 households that will receive piped water for the first time in provinces of Binh Duong, Dak Lak, Quang Tri, Thua Thien-Hue and the cities of Da Nang and Hai Phong. Water companies will also borrow to prepare an investment project for financing under a subsequent tranche.

 

The second loan and grant agreements, including a US$25 million loan from ADB and a grant of US$12 million from the Australian Agency for International Development, provide funds for improving the overall quality of the project outputs and meeting the costs overruns and financing gaps of the Greater Mekong Subregion (GMS) Southern Coastal Corridor Project. It will also help finance a detailed design and implementation support for the remaining sections of the GMS Southern Coastal Corridor in Vietnam from Ha Tien to Rach Gia – a loan planned for ADB’s consideration in 2014.