Japan has agreed to an ODA deal on Tuesday worth US$108.37 million for Vietnam to boost its socio-economic development in the 2016 fiscal year.

Vietnamese Deputy Minister of Planning and Investment Nguyen Van Trung and Japan’s Ambassador Extraordinary and Plenipotentiary to Vietnam Fukada Hiroshi on Tuesday signed an exchange of notes on Japan’s ODA load to Vietnam for fiscal year 2016.

ODA, or official development assistance, is official financing to promote economic development and the welfare of developing countries.

The ODA loan, worth 11 billion Japanese yen ($108.37 million), is expected to aid Vietnam in the development of its socio-economic infrastructure.

According to Deputy Minister Nguyen Van Trung, the loan will be used to deploy Vietnam’s economic administration assistance programs as well as improve the country’s competitiveness through reforms in several fields of priority for the 2016-2017 period.

“Vietnam vows commitment to the proper and most efficient use of the ODA loan,” Trung said during the signing ceremony taking place at the headquarters of Vietnam’s Ministry of Planning and Investment (MPI) in Hanoi.

Japanese Ambassador Fukada Hiroshi underscored the importance of using the loan transparently and efficiently toward reform programs in the country, a responsibility he said lay in the hands of the Vietnamese government.

 “I think Vietnam is a country of great potential for further economic development,” the ambassador said.

The loan will help the Vietnamese government maintain the country’s macroeconomic stability; promote transparency, economy, and responsibility in the public sector; as well as improve its business environment, according to an official announcement by the MPI.

According to the Ministry, the exchange of notes laid out the framework for ODA loans, based on which senior officials at Vietnam’s Finance Ministry and Japan’s International Cooperation Agency (JICA) would sign future detailed agreements for individual loans.

Since its resumption of ODA funding to Vietnam in 1992, Japan has consistently been the Southeast Asian country’s single biggest donor, having granted or loaned a total of approximately 2.8 trillion yen ($27.6 billion) in assistance to the country, according to the MPI.

In other news, Japan’s Minister of Land, Infrastructure, Transport and Tourism (MLIT) has expressed his hope to become a partner of Vietnam’s economic hub of Ho Chi Minh City in providing equipment and human resource training for operating and maintaining rail systems and other infrastructure in the city.

The suggestion was made during the second day of Ho Chi Minh City Deputy Party Chief Tat Thanh Cang’s working visit to Japan to prompt further economic cooperation with the country.

Deputy Minister of MLIT Hisayuki Fujii asserted that the city’s infrastructure development was falling behind the demand of such a fast-growing and dynamic city, which houses roughly a fifth of Vietnam’s population and serves as the momentum for economic advancement of a vast neighboring area.

Cang was also received by Japanese State Minister for Foreign Affairs Nobuo Kishi on Tuesday afternoon, and will fly to Osaka on Wednesday to continue his working agenda in the country.