Hanoi, February 22nd, 2013 – The State Bank of Vietnam and the World Bank today signed a credit agreement to support the implementation of Vietnam’s National Target Program (NTP) for Rural Water Supply and Sanitation.
The US$ 200 million support is expected to provide safe and clean water for 1.7 million people, and improved sanitation for 650,000 people in 8 provinces of the Red River Delta. The Australian Agency for International Development, AusAID, has also committed to provide AUD 8 million in the form of technical assistance in further support of this National Target Program, under an AusAID-World Bank Strategic Partnership which supports Vietnam’s economic competitiveness, environment sustainability, and access to economic and social opportunity.
The support uses an innovative new approach to financing which links funds directly to results, ensuring that benefits will be delivered to those in need more efficiently.
“We are very pleased to support the government’s program of increasing access to improved water supply and sanitation in the Red River Delta using a results-based approach and moving towards a more programmatic engagement,” said Ms. Victoria Kwakwa, the World Bank’s Country Director for Vietnam.
Access to sustainable water supply and sanitation services in rural areas of Vietnam is low, and water quality is a problem in the Red River Delta region. Improved sanitation and better access to safe water brings important health benefits as well. In addition, the Program will support the strengthening of institutional systems and improve sector planning, monitoring and evaluation in participating provinces. For the first time in its history, the State Audit of Vietnam will carry out independent verification of Program results.
“Australia is one of three donors providing targeted budget support and technical assistance to Vietnam to implement its Rural Water Supply and Sanitation National Target Program Phase 3,” said Australian Ambassador to Vietnam, Mr. Hugh Borrowman. “I am pleased that Australia can help increase access to water supply and sanitation in the Red River Delta through this innovative financing approach.”
The Program will strengthen governance systems for results-based service delivery as well as gender-based monitoring and reporting, two key components of the World Bank Vietnam Country Partnership Strategy 2012 – 2016.
The World Bank’s new financing instrument called the Program for Results, or PforR, links disbursements of funds directly to the delivery of verifiable results. This Program is the first PforR to be approved by the Bank in the East Asia and Pacific region and the first for the Bank in its rural water supply and sanitation sector.
The funding for this credit comes from the World Bank’s International Development Association (IDA), the World Bank’s concessional lending resource for poor countries.