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HANOI, VIET NAM (16 September 2005) - ADB and the Government of Viet Nam has signed a US$38 million loan and grant package to help combat communicable diseases and emerging lifestyle diseases by strengthening the country's preventive health system.

The loan agreement was signed in Hanoi yesterday by Bradford Philips, Country Director for ADB's Resident Mission in Viet Nam, and Le Duc Thuy, the Governor of the State Bank of Viet Nam.

The project will strengthen the country's preventive health system to help combat communicable diseases and address new challenges in areas such as food safety, occupational health, and school health.

It will upgrade preventive health centers with new equipment and training in 46 of the country's 64 provinces and 4 national institutes; provide training in preventive health, epidemiology, communicable disease control, and laboratory techniques; and provide support to communicable disease control programs in the 17 poorest and most disadvantaged of the project provinces.

The project will also build capacity in the health surveillance system, and support the planning and technical capacity of the preventive health system and health surveillance system.

"Viet Nam's health profile is changing and the country now requires a preventive health system that can continue to support provinces with high levels of communicable diseases, while beginning to address new issues like occupational health and safety and noncommunicable diseases," says Mr. Philips.

"The project will help put Viet Nam on course to achieve its health-related development goals by 2015."

Viet Nam's health profile is becoming more heterogeneous, with communicable diseases remaining a major concern in poorer areas and noncommunicable diseases, such as cardiovascular diseases, diabetes, and cancer, dominating middle-income areas. The country is also at risk from emerging communicable diseases like HIV/AIDS, SARS, and avian flu.

Current trends in income growth, urbanization, and industrialization have also increased the need to address food safety and to improve safety standards in the workplace.

ADB will provide a $27.9 million loan, which will cover 59% of the project's estimated total cost of $47.5 million. The loan will come from ADB's concessional Asian Development Fund (ADF) and will carry a 32-year term, including a grace period of 8 years. Interest rate is set at 1% per annum during the grace period, and 1.5% per annum thereafter.

A $10.14 million grant from the ADF will also be given to support various activities aimed at controlling communicable diseases. The Government will shoulder the balance of $9.5 million equivalent.

The Ministry of Health is the executing agency for the project, which is due for completion in December 2011.

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