Japan’s unstinting ODA support

The funds offer Vietnam a road to develop its creaky infrastructure

Minister of Planning and Investment (MPI) Vo Hong Phuc and Japan’s ambassador to Vietnam Yasuaki Tanizaki last week exchanged Japanese official development assistance (ODA) loan notes for 2011.

Accordingly, Japan will provide 40.946 billion Japanese yen ($508 million) for Vietnam at an interest rate of 1.2 per cent, per year. This is the first lending made to Vietnam by the Japanese government in this fiscal year.

The 30-year loan, followed the Japanese and Vietnamese prime ministers’ commitments at a joint meeting last summer, will be earmarked for two projects to build the Ho Chi Minh City-Dau Giay expressway section at a cost of 25.034 billion yen and an expressway section running from Quang Nam province’s Danang city to Quang Ngai province worth 15.912 billion yen.

These expressway sections are parts of the North-South expressway construction project, in which the Ho Chi Minh City-Dau Giay section has total investment capital of $932.4 million backed by Japan and the Asian Development Bank. The Danang-Quang Ngai section has investment capital of $1.472 billion including ODA from Japan and the World Bank, and the Vietnamese government’s fund.

The exchanged notes stipulate frame conditions for supplying and utilising this loan. Based on these conditions, representatives from the Ministry of Finance and the Japan International Cooperation Agency will sign two specific credit agreements for these two projects.

“This is quite a big assistance sum, but it is more important that while Japan is in dire need of cash to recover its economy recently hit by tsunami and earthquake, Japan’s government and people still do not pare down ODA to Vietnam and even maintain this bilateral assistance to Vietnam,” Phuc told Tanizaki.

He said the loan would also help realise the two governments’ commitments in implementing three big projects, the North-South expressway, the North-South express railway and constructing Hoa Lac High-Tech Park’s infrastructure.

Ambassador Tanizaki said Japan’s government believed in Vietnam’s bright socio-economic development prospects and Japan would continue to cooperate with and provide ODA to Vietnam in the coming time.

In October last year, during a visit to Vietnam Japan’s Prime Minister Naoto Kan vowed to continue providing ODA to the South East Asia country to carry out large-scaled infrastructure projects such as airports, seaports and roads.

The MPI’s Foreign Economic Relations Department deputy head Nguyen Xuan Tien, said the Vietnam-Japan policy dialogue meeting last month tabled new projects that Japan could support Vietnam in the coming time. Under which, three projects were considered including a project to build the North-South expressway’s Long An province-based Ben Luc-Dong Nai province-based Long Thanh section, a project to build Vietnam Cosmography Research Centre at Hoa Lac High-Tech Park, and Thanh Hoa province’s Nghi Son thermoelectricity plant.

“It is expected that the Japanese side will send experts to Vietnam to appraise the new projects before deciding on next procedures,” Tien said.

Since its resumption of ODA to Vietnam in 1992, Japan has always been Vietnam’s largest bilateral donor, with total assistance worth about 1.68 trillion yen. Tanizaki said Vietnam had been using Japan’s ODA effectively.