Home 
Regions and Countries Country Partnership Strategy Document
IV. Country Performance and Lending LevelsA. Proposed Lending Level27. The Asian Development Fund (ADF) lending level starting in 2002 will be based on the performance-based allocation (PBA) system. Country-specific indicators covering macroeconomic, structural, and portfolio implementation issues were discussed by the Government and ADB (Appendix 4). Consequently, the lending figures for 2002-2004 in the attached program should be regarded as indicative. The proposed program was designed based on annual base case commitments of $220 million for ADF and $60 million for ordinary capital resources (OCR) on average, and is subject to adjustments depending on PBA outcomes. Especially in the early years of PBA application, adjustments in lending level will have to be made by adjustingon the size of planned loans. In later years, it may be possible to develop standby operations in case of high performance. Subregional projects totaling $70 million have been included for Viet Nam. Their funding will be supplementary to Viet Nam’s country allocation, and subject to considerations of overall ADFB allocation among GMS countries. The project selection briefs and the TA concept papers are in Appendix 6. 28. Initial analysis shows that the debt service impact of modest amounts of OCR borrowing is manageable and can be accommodated within the nonconcessional borrowing limits set by the IMF during negotiation of the Poverty Reduction and Growth Facility (PRGF). In particular, sectors and projects with a clear revenue generation capacity should make use of OCR funds to avoid crowding out other sectors that need more concessional terms and conditions. A mix of concessional loans and grants as cofinancing from official funding agenicesagencies will be sought to support the identified thematic priorities. As appropriate, opportunities for commercial cofinancing and guarantees will be explored for viable projects. B. Loan Program29. The lending program has been designed to reflect the three pillars and the geographic focus identified in para. 7.710 The proposed lending program is presented in Appendix 4. Approximately 6 percent of lending (7 percent of projects) will be core poverty operations; 43 percent of both lending and projects will be poverty interventions, and 51 percent of lending (50 percent of projects) nonclassified pro-poor growth interventions. Preliminary analysis suggests that, due to poverty levels, the North Central Coast and Central Highlands should be the main focus of ADB operations in the Central Region. During 20012-2004, four projects for $285 million will focus essentially on the Central Region; another four projects for $225 million, while national in scope, will have partial focus on the same area. Since a number of such projects will have decentralized implementation arrangements, focus on a more limited number of provinces will also facilitate capacity building of local governments and institutions. The program is subject to further refinement as a result of the full CSP preparation process, which will be completed by December 2001. C. Technical Assistance and Economic and Sector Work Program30. The TA pipeline (Table A4.32) was designed to support the main areas of emphasis identified in the lending program. A base case scenario of $6 million was used for the TA IPF for 2002 and 2003. Since the CSP will be finalized during the second half of 2001, the proposed TA pipeline, particularly for 2003 and 2004, will be further adjusted to respond to the final CSP priorities. To strengthen the lending pipeline, nearly two thirds of the TAs in 2002 and 2003 will be project preparatory TAs. The remaining few advisory TAs are all in support of planned lending operations or governance improvements. Given the large needs of Viet Nam for capacity building, sector analysis, and institutional development, cofinancing will be actively sought to ease the constraint imposed by the reduced TA IPF. 31. Economic and sector analysis (Appendix 5) will continue to be performed in the sectors of ADB involvement, particularly in areas of renewed attention (such as governance and public management, decentralization, area-based poverty reduction, SME development, and urban development in provincial and district towns). A more detailed economic and sector analysis program will be included in the full CSP. D. Summary of Changes32. The proposed lending program differs from the one presented in the 2001-2003 CAP mostly because (i) operations in support of financial sector and SME development slipped by one year, to allow more time for adequate preparation; (ii) lending for the Se San 3 hydropower project, scheduled for 2002, was cancelled subsequent to concern about appropriate assessment of environmental impacts, and incompatibility with the Government’s proposed schedule for implementation; (iii) lending for the GMS Kunming-Haiphong corridor is to be funded through funds earmarked for subregional cooperation, outside Viet Nam’s IPF, and will slip by one year; and (iv) a new loan in support of governance and public administration reform was scheduled on a standby basis for 20043, subject to further Government assessment.
| |||||||||||||||||||||
© 2009 Asian Development Bank Privacy | Terms of Use |
 Top of page |
Back