Road Loan Helps Viet Nam Spur Growth in Remote Provinces

Roads like this in Ha Giang Province will be upgraded as part of the project.

MANILA, PHILIPPINES – The Asian Development Bank (ADB) will help Viet Nam upgrade roads in remote northern provinces to reduce the area’s isolation and deliver new economic opportunities to some of the country’s poorest people.

The ADB Board of Directors has approved a loan of $80 million for a road rehabilitation project which will improve about 300 km of unpaved and frequently impassable roads in six northern mountainous provinces―Bac Kan, Cao Bang, Ha Giang, Tuyen Quang, Yen Bai and Lao Cai. About a third of the people live in poverty, and the area is home to many ethnic minority communities.

“Better road links to these remote communities will reduce the time and cost of travel, increase access to markets and social services, and help stimulate economic opportunities and investment,” said Masahiro Nishimura, Transport Specialist in ADB’s Southeast Asia Department.

The vast majority of people and goods in Viet Nam travel by road, and most are provincial or local links which are often impassable for long periods during the rainy season. The poor condition of many roads in mountainous provinces discourages investment, making it difficult for rural economies to expand beyond subsistence farming, or for local industries to develop. The project will improve the connection between rural communities and national transport corridors, opening up new opportunities for trade and investment.

The roads earmarked for upgrade are in areas prone to natural disasters, such as flash floods, which will worsen as a result of climate change. The Nordic Development Fund is providing a grant of $2.7 million equivalent to develop climate proofing measures in the design of road rehabilitation works. The project will be implemented by provincial people’s committees in the six provinces, marking a shift from the past when the Ministry of Transport was the executing agency.

Community awareness activities will help mitigate negative social impacts along the improved roads, including the spread of sexually transmitted diseases. At least half of the unskilled local jobs provided during the construction phase will be reserved for women.

ADB’s loan comes from its concessional Asian Development Fund, and the project is scheduled for completion in December 2016.