ADB gives large loan to improve irrigation and infrastructure

The loan will be used to develop Vietnam’s irrigation infrastructure and water resources management for two rivers in Thanh Hoa Province, the Chu in the north and the Ma in the south, and to improve urban infrastructure and municipal services in the northern economic centers of Viet Tri, Hung Yen and Dong Dang.

At the signing ceremony, State Bank of Vietnam’s Governor, Nguyen Van Binh represented the Government, and the ADB Country Director for Vietnam, Tomoyuki Kimura, represented ADB.

“Adequate infrastructure is a necessary condition that each and every Asian middle-income country must meet to maintain the momentum of economic growth, enhance trade and investment, and strengthen competitiveness,” said Mr. Kimura. He added that, “The ADB places great importance on infrastructure. Poor infrastructure will not only prevent farmers from improving productivity and earning higher income but also hamper investment and business opportunities. This makes urban development issues more critical.” 

The $110 million loan was for the development of the Northern Chu and Southern Ma rivers irrigation system (NCSMRIS) project. The project is part of the Government’s overall investment program for the NCSMRIS, which will increase water productivity, reduce rural energy use, and improve food security.

The NCSMRIS development project will support the Government’s plan to expand irrigated land within the NCSMRIS command area from 15,700 hectares to more than 31,000. Through improved irrigation facilities and water supply, the project is expected to benefit more than 119,495 households (466,000 people), of which nearly 11,500 households are Thai and Muong ethnic minorities.

Another $70 million loan from ADB’s Asian Development Fund will finance urban infrastructure construction and upgrades, as well as strengthen local government's urban management capacities in Viet Tri, Hung Yen and Dong Dang, along the North-South Economic Corridor (NSEC).

“To address critical urban development issues and divert rural migration away from large cities, Vietnam is focusing on development of secondary cities and strengthening the rural-urban linkages,” Mr. Kimura added. “The project will not only develop Viet Tri, Hung Yen and Dong Dang to complement Hanoi as northern Vietnam’s economic centres, but also contribute to the transformation of the NSEC from a transport corridor to a full-fledged economic corridor.”