VN, WB ink $507m loan deal

Update: July, 11/2015 - 09:56
WASHINGTON D.C (VNS) — The State Bank of Viet Nam and the World Bank on Thursday signed four credit agreements totaling US$507 million to support Viet Nam's priorities in sustainable agriculture, poverty alleviation, and a bus rapid transit system.

The signing took place in the US capital Washington DC on the occasion of the first official visit by Party General Secretary Nguyen Phu Trong to the country.

"The signing signals the close partnership between Viet Nam and the World Bank, and we look forward to even more comprehensive co-operation in areas of strategic importance to the country," Victoria Kwakwa, the bank's country director for Viet Nam, said.

The financing covers four programmes: Sustainable Agriculture Transformation (US$238 million), the ongoing Livestock Competitiveness and Food Safety ($45 million) and Second Northern Mountains Poverty Reduction ($100 million) projects, and the HCM City Green Transport Development Project ($124 million).

Sustainable Agriculture Transformation supports the government's efforts to reform agriculture, especially rice and coffee production. It will directly benefit up to 140,000 families in the Mekong Delta by helping them improve farming practices, invest in processing infrastructure, and link up with agri-businesses. It will also support 62,000 coffee-producing households with 250,000 people in the Central Highlands.

"Sustained agricultural growth will require structural changes in the pattern of production and organisation of the supply chain to improve the livelihoods of small-holders and their families," Chris Jackson, the World Bank's lead rural development specialist and team leader for the project, said.

The Livestock Competitiveness and Food Safety programme is working to boost the efficiency of animal husbandry, reduce the environmental impacts of livestock production, processing and marketing and improve food safety in livestock product supply chains.

It has already yielded results as better practices have helped reduce livestock mortality rates and lowered the cost of feeding.

With support from the bank, HCM City is developing a rapid bus transit system using green technology, which runs through the city's important economic corridor.

"Additional financing will help scale-up the project's activities to other areas in the 12 project provinces targeted," Vo Thanh Son, the bank's senior rural development specialist and team leader for the project, said.

The Second Northern Mountains Poverty Reduction project is supporting the Government's efforts to reduce poverty in the poorest region of Viet Nam.

The additional financing will continue and deepen poverty mitigation activities in the six provinces of Hoa Binh, Son La, Dien Bien, Lai Chau, Lao Cai, and Yen Bai; include additional districts and communes; scale up and strengthen participatory local development planning and institutionalise this approach in the government's overall national poverty reduction programmes; and promote market linkages and business innovations to boost farmers' incomes.

"The project areas have some of the highest rates of poverty in Viet Nam, and many beneficiaries are from impoverished ethnic minority communities," Nguyen Thi Thu Lan, the bank's senior environmental economist and the team leader for this project, said.

The HCM City Green Transport Development Project will finance the development of a 23km bus rapid transit corridor that will transport up to 28,300 passengers a day. It will also help city authorities prepare for a proposed six-line network and lay the foundation for an integrated public transport system in the future.

"The Government is addressing infrastructure constraints that may impede Viet Nam's continued strong economic performance. Upgrading a key transport corridor in HCM City can demonstrate to the rest of the country the potential of a sustainable urban transport system," Arturo Ardila-Gomez, the World Bank's project lead transport economist and project team leader, said. — VNS/WB