ADB to extend $150m loan to Vietnam for rural development

vietnam
Photo by Rafa Prada on Unsplash

The Asian Development Bank (ADB) has approved a $150 million loan to support development in four of Vietnam’s northeastern provinces – Bac Kan, Cao Bang, Ha Giang, and Lang Son. The financial aid is expected to help over 212,000 people through enhancing basic infrastructure and services.

“Viet Nam has been experiencing remarkable growth over the last few years. However, the majority of economic gains have accrued in the urban areas, with rural areas, including provinces in the northeast, lagging behind,” said Eric Sidgwick, ADB’s Country Director for Viet Nam, in a statement.

“We are confident the project will help realize the great growth and development potential of the northeastern part of Viet Nam, particularly in trade, agriculture, and tourism,” Sidgwick said.

The provinces of Bac Kan, Cao Bang, Ha Giang, and Lang Son have significant potential to become trade hubs due to their strategic location, at the nexus of China, the capital Hanoi, the Hai Phong port, and the ADB-supported Greater Mekong Subregion North-South Economic Corridor, the bank noted in its statement.

However, this potential is yet to be fully realized, with gross domestic product per capita of the four provinces in 2015 remaining at $1,160, almost half of the $2,036 national average.

The loan from ADB is expected to help develop basic infrastructure across key sectors including trade, transport, health, and agriculture. It will also strengthen the capacity of the provincial governments, particularly in public asset management.

The total cost of the project is $190.3 million, with the Vietnam government contributing $40.3 million. The project is expected to be completed by the first quarter of 2023.

Established in 1966, ADB is celebrating 50 years of development partnership in the region. In 2016, its assistance totalled $31.7 billion, including $14 billion in co-financing.

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