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Assistance Package Signed to Improve Roads in Viet Nam’s Central Region

HANOI, VIET NAM (30 November 2005) - The Government of Viet Nam and ADB today signed an agreement for a $95 million concessional loan and grant package to improve 1,200 kilometers of roads that will boost economic growth in 19 provinces in Viet Nam’s Central Region.

Roads are the principal mode for the movement of goods and people in the Central Region, yet the existing networks are sparse and of poor quality.

This has a major impact on people living in rural areas. Nearly all of the provinces in the Central Region have strikingly high rural poverty, ranging from 16% to 53%, and two of the provinces are among the poorest in the country.

“The project will improve access to markets, jobs, and social services in the rural areas; thereby helping to reduce the remoteness and poor linkages with the rest of the economy, that are key factors behind the high incidence of rural poverty in the Central Region," Bradford Philips, ADB’s Country Director for Vietnam, said in a short speech at the loan signing ceremony.

A $94.5 million loan will help rehabilitate and improve to all-weather conditions the roads, which connect selected rural areas and district and provincial centers. Road safety programs will also be carried out, and sustainable road and bridge asset management systems will be established.

A $500,000 grant accompanies the loan to understake awareness programs to address the increased vulnerability to HIV/AIDS, other infectious diseases and exploitation of teenage children and women through human trafficking brought by improved access to remote communities.

ADB's loan and grant comes from its concessional Asian Development Fund. The loan carries a 32-year term, including a grace period of 8 years. Interest will be 1% per annum during the grace period and 1.5% per annum for the rest of the term.

The Government will finance $32 million equivalent of the project's total estimated cost of $138 million. The Nordic Development Fund will cofinance $11 million.

The Ministry of Transport is executing agency for the project, which is due for completion in 2010.

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members – 46 from the region. In 2004, it approved loans and technical assistance totaling $5.3 billion and $196.6 million, respectively.

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