ADB, Viet Nam Sign Billion – Dollar Highway Loan

News Release

No. 18/08

26 September 2008

ADB, Viet Nam Sign Billion – Dollar Highway Loan

HANOI, VIET NAM (26 September 2008) – The Asian Development Bank (ADB) and the Government of Viet Nam today signed the agreement for the $1.1 billion loan to upgrade the Noi Bai-Lao Cai section of Kunming-Hai Phong Transport Corridor. The loan is the biggest single project financing in ADB’s history.

State Bank of Viet Nam’s Governor Nguyen Van Giau represented the Government, and ADB Country Director for Viet Nam Ayumi Konishi represented ADB during the signing ceremony.

The 244-kilometer highway starting from Noi Bai and ending at Lao Cai is an integral section of the eastern link of Greater Mekong Subregion (GMS) Northern Economic Corridor. The corridor connects Kunming city in Yunnan province of the People’s Republic of China with Ha Noi, and Hai Phong and Cai Lan ports in Viet Nam.

At present, many of the existing national roads between Ha Noi and Lao Cai are narrow and connected only by bridges with limited capacity. The Noi Bai-Lao Cai Highway will help reduce the volume of traffic passing through cities and towns along the road, which could significantly reduce the number of traffic accidents.

“Upon completion, the Noi Bai-Lao Cai Highway will be an efficient, safe and reliable high-standard road that will reduce travel time to three hours from the present eight to 10 hours, enabling one-day transport between Kunming, Ha Noi and Hai Phong,” said Ayumi Konishi, ADB Country Director for Viet Nam.

“The highway will give a shorter and lower cost route to major ports and inland markets, have great potential for tourism, and also substantially enhance Viet Nam’s ability to export agricultural and maritime products to Yunnan province as well as to improve international competitiveness,” he added.

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 67 members – 48 from the region. In 2007, it approved $10.1 billion of loans, $673 million of grant projects, and technical assistance amounting to $243 million.

PROJECT SUMMARY

Project Title	Greater Mekong Subregion: Kunming-Hai Phong Transport Corridor - Noi Bai-Lao Cai Highway Project

Estimated Project Completion Date	30 June 2012

Executing Agency	Viet Nam Expressway Corporation (VEC)

Financing Plan	Source	Total ($ million)	%
	ADB (OCR)	896.0	74
	ADB (ADF)	200.0	16
	VEC	120.0	10
	Total	1,216.0	100
	ADB = Asian Development Bank ADF = Asian Development Fund OCR = Ordinary Capital Resources, provided under ADB’s LIBOR-based lending facility

Project Description	The Project is designed to provide (i) a 244-kilometer grade-separated and access-controlled highway, including 10 interchanges with toll booths and five services areas, starting from Noi Bai and ending at Lao Cai; (ii) electric, communications, and tolling systems and associated facilities, and the Viet Nam Expressway Corporation’s highway operation and maintenance equipment and vehicles; and (iii) capacity building for VEC on management of project implementation, corporate financing management, operation and maintenance of highways, and safeguard planning and implementation.

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Email: danghc@adb.org

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