Countries and Regions

	Table of Contents
p. 8 of 10 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels A. Lending Level Proposed B. Nonlending Program C. Summary of Changes to Lending and Nonlending Program

Country Strategy and Program Update 2006-2008: Viet Nam, Socialist Republic of : IV. Country Performance and Assistance Levels

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A. Proposed Lending Level

17. As a result of better overall country performance, Viet Nam’s share in performance-`based ADF allocation was increased to $439.56 million for 2005 and 2006, with $219.78 million on average. As per the new guidelines, the 2005 program should be delivered in the range of $165 million–$274 million (from 37.5% to 62.5% of the biennial volume). The ADF program for 2005 and 2006 is based on a core lending and nonlending (project grant) level of $213 million for 2005 and $226.56 million for 2006. The 2007 and 2008 assistance pipelines are tentatively based on the project preparatory TAs in the pipelines of 2005, 2006, and 2007.¹⁰ They will be refined and firmed up during the next country program confirmation mission and preparation of the new CSP. By then the ADF allocation will probably be finalized. For planning purposes, the ADF allocation for 2007–2008 is set at $434 million ($215 for 2007 and $219 for 2008). A flexible approach will be adopted for the OCR lending program as the actual size of the OCR projects will be known only after completion of the project preparatory TAs. For 2006–2008, OCR lending is estimated to be up to $500 million annually. The total regional lending program is expected to range from around $30-$40 million annually during 2005-2006.

18. The lending and nonlending programs are designed to reflect the three strategic pillars and geographic focus identified in the CSP. In adjusting and prioritizing the programs, the CSPU uses the following criteria:

1. give priority to projects in more advanced state of preparation, so that feasibility studies will not become obsolete and more proactive sectors will be encouraged
2. attempt to ensure a sector balance in the annual lending program
3. focus ADF resources on the social and rural sectors, and/or other sectors mutually agreed with the Government
4. consider ADF IX grants only for projects related to communicable disease control
5. utilize OCR for revenue-generating and financially viable projects

19. An ad hoc working group chaired by the Ministry of Planning and Investment (MPI) with representatives from the State Bank of Viet Nam, Ministry of Finance, and key line ministries, enterprises, and ADB, will facilitate initial appraisal of requests for OCR funding.¹¹ ADB will conduct workshops on planning, evaluation, and management of OCR projects. ADB and the MPI in cooperation with the Government of the People’s Republic of China (PRC) will facilitate a study tour of selected OCR-funded projects in the PRC for Vietnamese government officials.

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