ADB assistances to northeastern and north central provinces in Viet Nam

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The Asian Development Bank’s (ADB) Board of Directors has approved a US $150 million loan to help improve economic connectivity and raise living standards in four of Viet Nam’s northeastern provinces by enhancing basic infrastructure and services. The assistance is expected to help over 212,000 people.

The provinces of Bac Kan, Cao Bang, Ha Giang, and Lang Son, which are the project areas, have significant potentials to be trade hubs due to their strategic location, at the nexus of the People’s Republic of China, the capital Hanoi, the Hai Phong port, and the ADB-supported Greater Mekong Subregion North-South Economic Corridor. However, these potentials are yet to be fully realized, with gross domestic product per capita of the four provinces in 2015 remaining at US $1,160, almost half of the US $2,036 national average.

The Basic Infrastructure for Inclusive Growth in the Northeastern Provinces Sector Project will help unlock the binding constraints through the development of basic infrastructure across key sectors including trade, transport, health, and agriculture.

Specifically, the project will improve road connectivity among the provinces by upgrading about 121 kilometers (km) of provincial and 144 km of district roads, provide rural water supply, benefiting 42,300 people, and improve agriculture value chain infrastructure in Lang Son province through farm-to-market connectivity and support to local businesses. It will also strengthen the capacity of the provincial governments, particularly on public asset management.

Total cost of the project is US $190.3 million, with the Government of Viet Nam contributing $40.3 million. The project is expected to be completed by the first quarter of 2023.

In addition, ADB has also approved loans totaling US$149 million to help improve basic infrastructure services and promote inclusive and sustainable economic growth that will benefit over 1 million people in four provinces in the north central coastal region of Viet Nam.

ADB’s assistance for the Basic Infrastructure for Inclusive Growth in the North Central Provinces Sector Project includes a regular loan of US $52 million and a concessional loan worth $97 million. Both loans will be financed from the ordinary capital resources where most of ADB’s lending come from. The total cost of the project, is US $203.52 million, with the Government of Viet Nam contributing US $54.52 million.

Economic development in the project provinces such as Ha Tinh, Nghe An, Quang Binh, and Quang Tri has been constrained by the fragmented coverage of basic infrastructure, with the 2015 poverty rate reaching 13% compared to the 7% national average. Moreover, the provinces are extremely vulnerability to weather-related disasters and are predicted to have the country’s highest increase in annual mean temperature at 1.7% and annual rainfall shooting up by 20%.

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To address these issues, the project will improve connectivity among the provinces by upgrading and constructing about 214 kilometers of climate-resilient provincial and district roads, which will benefit more than 900,000 beneficiaries. It will boost business development through the construction and upgrading of rural water supply, flood protection, irrigation, and port services. It will also improve the capacity of the provincial governments, particularly in public asset management. The project is expected to be completed by the first quarter of 2023.