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Thanh Hoa City's to be Developed with ADB and Korean Support

HA NOI, VIETNAM (17 April 2009) - The Asian Development Bank (ADB) and the Government of Viet Nam signed an agreement in Thanh Hoa City for a loan totaling $72.0 million to support Thanh Hoa City to develop an innovative project to improve its urban infrastructure which is due for completion around December 2014.

State Bank of Viet Nam's Governor Nguyen Van Giaurepresented the Government, and ADB Country Director for Viet Nam Ayumi Konishi represented ADB during the signing ceremony. Mr. Mai Van Ninh, Chairman of the Thanh Hoa Provincial People's Committee and other senior officials of the Government and provincial authorities witnessed the ceremony.

Although Thanh Hoa has played a strategic role in Viet Nam's history and has a great potential in the industry and tourism, so far it has not been able to capitalize on its competitive and locational advantages due to deficiencies in infrastructure, human skills and institutional and regulatory environments. Despite having a high rural density, migration is not occurring towards Thanh Hoa City, but to other larger cities in Viet Nam.

The Project aims to support Thanh Hoa's socioeconomic development through simultaneous urban infrastructure investments as well as the "soft" aspects of industrial and tourism sector development and capacity building. The project includes the water supply network expansion and upgrading of 38 km of pipes as well as construction 27 km of interceptors for the sewage and drainage network and wastewater treatment facilities. The project will also improve Thanh Hoa's labor productivity to make its industrial sector more competitive, through the upgrading of various training facilities and develop its tourism infrastructure in Ham Rong, Mat Son, and the city center. Through the Water Financing Partnership Facility grant of $2.0 million, the project will build the capacity of the Thanh Hoa Water Supply Company and Urban Environmental Company and introduce several institutional reforms to attract outside investments and provide better urban services.

As part of the project, Korean EXIMBANK loan of $32.7 million will finance the construction of a new 11 km ring road along with complementary services, to relieve traffic congestion in the city center and another 11 km of secondary and access roads to connect its peri-urban areas.

"For the development of Thanh Hoa City, an integrated, multi-sectoral approach is imperative to address complex issues facing rapidly growing urban areas," said Mr. Konishi at the signing ceremony. "ADB hopes that the lessons learned from the Thanh Hoa project will make it an exemplary model for future urban projects in Viet Nam."

ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.

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