Irrigation project receives international support

The Asian Development Bank and the French Government’s development agency are providing additional funds to complete an irrigation and water management project that is expected to boost growth in HCM City’s rural, urban, and industrial areas and neighbouring provinces.

The ADB recently approved a supplementary loan of US$60 million for the Phuoc Hoa Water Resources Project, while Agence Francaise de Developpement (AFD) will provide $25 million.

ADB and AFD had initially pledged a combined $124 million for the project to build irrigation systems and supply water for domestic and industrial use and to develop management skills in government oversight agencies and community water user groups.

But a cost over-run due to delays in implementation – the project was mooted in 2003 – and high inflation caused a financing gap of more than $131 million.

At the request of the Vietnamese Government, which has earmarked the project as a key development priority, it was agreed to extend additional funds.

The new loan will supplement the original loan which enabled the construction of Phuoc Hoa transfer canal to divert water from Be River in southern Binh Phuoc Province to a reservoir on Sai Gon River.

The Government will bring in $42.9 million in matching funds, with farmer beneficiaries contributing $3.7 million in kind.

The Ministry of Agriculture and Rural Development is the executing agency for the project which is expected to be finished in March 2014 at a total cost of $329.5 million. — VNS