The Asian Development Bank (ADB) has agreed to grant two separate loans totaling US$299 million to Vietnam to help improve the country’s economy, living standards, infrastructure and sustainable growth.
The decision, reached on Monday by the ADB board of directors, included a $150 million loan to help boost economic connectivity and raise living standards in four northeastern provinces, and a $149 million loan to improve infrastructure and promote sustainable growth in four north-central provinces.
The first lending will partially fund a project to unlock the full potential of the provinces of Bac Kan, Cao Bang, Ha Giang, and Lang Son in northeastern Vietnam through the development of basic infrastructure across key sectors including trade, transport, health, and agriculture.
The four provinces had a combined per capita gross domestic product (GDP) of only $1,160 in 2015, less than half of the national average of $2,036, despite being in a strategic location at the nexus of China, Hanoi, the busy port of Hai Phong, and the ADB-supported Greater Mekong Subregion North-South Economic Corridor.
Specifically, the project will improve road connectivity among the provinces by upgrading about 121 kilometers of provincial roads and 144 km of district roads, while providing water supply to about 42,300 rural residents.
The plan also looks to improve the logistical infrastructure for agricultural development in Lang Son through farm-to-market connectivity and support of local businesses.
It will strengthen the capability of the provincial administrations, particularly in public asset management.
Over 212,000 residents in the four provinces are expected to benefit from the project, which cost a total of $190.3 million, with the government of Vietnam contributing the remaining $40.3 million.
The project is expected to be completed by the first quarter of 2023.
The second ADB assistance includes $52 million in regular lending and a concessional loan worth $97 million to finance a $203.52 million project to elevate basic infrastructure services and spur inclusive and sustainable economic growth in the coastal provinces of Ha Tinh, Nghe An, Quang Binh and Quang Tri in north-central Vietnam.
The provinces reported a poverty rate of 13 percent compared to the national average of seven percent in 2015, while local economies are extremely vulnerable to weather-related disasters.
The region is predicted to have the country’s highest annual increase in mean temperature, at 1.7 percent, and rainfall shooting up by 20 percent every year.
To address these issues, the project will heighten connectivity among the provinces by upgrading and constructing about 214 km of climate-resilient provincial and district roads, which will benefit more than one million residents.
It will accelerate business development through the construction and upgrading of water supply, flood protection, irrigation and port services.
The project is expected to be completed by the first quarter of 2023, with the government of Vietnam covering $54.52 million of the overall cost.