ADB Offers Loans worth US$96.4Mln to Vietnam

3:26:28 PM | 7/8/2005

The Asian Development Bank (ADB) and the State Bank of Vietnam (SBV) on December 20 signed three loans totaling US$96.4 million to help Vietnam achieve universal quality secondary education, reform the financial sector, and further reduce poverty.

The US$55 million loan for the Second Lower Secondary Education Development Project will help the Ministry of Education and Training (MoET) complete the introduction of the new curriculum and textbooks, as well as related in-service teacher training. Targeted support will be given to the poor, ethnic minority, and female students. The project, worth US$80 million, including US$25 million from the Government, will cover as many as 28 disadvantaged provinces for civil works and all provinces for quality enhancement activities. It will directly benefit about 366,000 students, of which 266,000 are disadvantaged and 100,000 are returning students from school dropouts, as well as about 72,500 teachers and education administrators.

A US$35 million loan was also signed for the second sub-programme of the Second Financial Sector Programme Loan (FSPL II), which was formulated in 2002. The sub-programme II will continue to support the Government’s effort to develop alternative channels of financial intermediation such as money and capital markets, insurance, and leasing. The Agence Francaise de Developpement (AFD), which provided co-financing of €23 million for sub-programme I, will provide €12 million in co-financing for sub-programme II.

ADB and SBV also signed a US$6.4 million programme-based loan to support the Government’s poverty reduction program. The loan is to support the policy framework of the Poverty Reduction Support Credit (PRSC) III, a program funded by several other development partners led by the World Bank in support of the Government’s Comprehensive Poverty Reduction and Growth Strategy (CPRGS).

All the three loans come from ADB's concessional Asian Development Fund, with 24- year term (except for the US$55 million education loan which carries a 32-year term) including a grace period of eight years. Interest is set at 1 per cent per annum during the grace period and 1.5 per cent per annum for the rest of the term.

During 2004, ADB approved six loans totaling US$296.4 million and 15 technical assistances amounting to US$7.3 million grants for Vietnam. These figures exclude regional projects and private sector operations.