WB Approves Loan for Five Major Projects in Vietnam

The State Bank of Vietnam and the World Bank just signed financing agreements worth US$682 million for 5 projects: the First Power Sector Reform Development Policy Loan, the Second Northern Mountains Poverty Reduction Project, the Central North Region Health Support Project, Ho Chi Minh City Environmental Sanitation Project Additional Financing, and the Red River Delta Rural Water Supply and Sanitation Project.

The US$312 million First Power Sector Reform Development Policy Loan is to support four main policy areas essential to the reform of Vietnam’s power sector. They include developing a competitive power market by reducing the existing monopoly, power sector restructuring to offer customers more choice, electricity tariff reform to attract new investors and improving energy efficiency.

Targeted at some of Vietnam’s poorest ethnic minority areas, the Second Northern Mountains Poverty Reduction Project builds on the success of its predecessor to enhance the living standards of people in 2,366 villages, in 230 communes, and in 27 districts of the six provinces of Lao Cai, Yen Bai, Son La, Hoa Binh, Dien Bien, and Lai Chau. The total funding of this project is USD 165 million, of which US$150 million is from IDA, and the rest is from the Government of Viet Nam’s counterpart funding.

Similarly, the Central North Region Health Support Project is a continuation of two other regional projects supported by IDA – in the Mekong and Northern Uplands regions. The total funding of the Central Northern Region Health Support Project is US$75 million, of which US$65 million is IDA financing and the rest is the Government’s contribution.

Meanwhile, another US$90 million will be invested in the Ho Chi Minh City Environmental Sanitation Project, which will help construct a 335 km drainage system for the city’s business centre to control annual flooding and increase the collection of wastewater in an environmentally and financially sustainable manner. In addition to collecting wastewater, it will provide flood relief to over 240,000 households and prevent flood-related infrastructure damage.

Another US$65 million will be spent on the Red River Delta Rural Water Supply and Sanitation Project to finance infrastructure for rural sanitation and water supply, benefiting over 800,000 people in the Red River Delta. It also supports hygiene behaviour change programs in 120 targeted communities while helping the government build capacity for sustainable rural water supply schemes, with tariffs set at a level sufficient to cover operations, maintenance and debt service.

Tags: World bank