Hanoi, January 12, 2012 – The State Bank of Vietnam and the World Bank today signed one IBRD loan and four IDA credits totaling US$ 973.5 million to support the development of modern infrastructure and in recognition of recent reforms in Vietnam. The money will be used to finance the Da Nang – Quang Ngai Expressway Project (US$613.5 million), Medium Cities Development Project (US$210 million) and the 10th Poverty Reduction Support Credit (US$150 million).
“This is the first time that the World Bank is financing the development of an expressway in Vietnam. This is in recognition of Vietnam’s need for modern infrastructure as it addresses emerging challenges of a lower middle income country.” said Victoria Kwakwa, Country Director for the World Bank in Vietnam. “The other credits signed today are expected to provide urban infrastructure in three medium cities with potential for development in their region, and contribute to implementation of Vietnam’s reforms.”
The Da Nang – Quang Ngai Expressway Project will construct an expressway that will enhance efficiency and safety for road users travelling between Da Nang city and Quang Ngai province, and build institutional capacity for expressway development in Vietnam‘s Ministry of Transport. The expressway will link the National Highway 1A, to the south of Da Nang city then to Quang Ngai province, and then back to National Highway 1A, in Quang Ngai province. The expressway facility in Central Vietnam would provide the necessary capacity for future growth, help reduce road accidents, and facilitate both domestic and international trade through regional integration.
The Medium Cities Development Project is expected to provide better urban infrastructure for up to 520,000 people in the cities of Lao Cai, Phu Ly and Vinh. The decision to focus on medium sized cities reflects the importance that both the Government and the Bank place on ensuring balanced and equitable development throughout the country. With this projects, people in the three cities are expected t benefit from access to improved water sources, improved sanitation, better transport system, and a comprehensive and sustainable urban asset management plans.
Meanwhile, the 10th Poverty Reduction Support Credit supports policy and institutional reforms under 4 main themes of the 2006 – 2011 Social – Economic Development Plan (SEDP), namely Business Development, Social Inclusion, Natural Resources Management and Modern Governance. The operation comprises policy actions in a range of areas including the financial sector, public financial management, the social sectors, environmental management, and public administration. This comprehensive program contributes to conditions needed for sustained growth, social inclusion, environmental sustainability and improved governance. These aim to maintain the momentum for reforms needed to support Vietnam’s transition to middle-income status. PRSC 10 is the last in a series of 10 credits, aimed at supporting Vietnam’s reforms to reduce poverty and strengthen coordination among line ministries and government agencies.
The International Development Association (IDA) is the part of the World Bank dedicated to help the World’s poorest countries. The International Bank for Reconstruction and Development (IBRD) is the non-concessional lending arm for credit worthy countries and middle income countries.