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Viet Nam and ADB

ADB has supported Viet Nam’s poverty reduction achievements and has more recently been helping guide measures to address income inequality and socioeconomic disparities, particularly for ethnic minorities and other vulnerable groups.

ADB's Work in Viet Nam

ADB Membership

Joined 1966

Shareholding and Voting Power

Number of shares held:
36,228 (0.341% of total shares)

Votes:
75,342 (0.567% of total membership, 0.870% of total regional membership)

Overall capital subscription:
$521.78 million

Paid-in capital subscription:
$33.86 million

The global economic downturn and weakening external demand caused by the coronavirus disease (COVID-19) pandemic slowed Viet Nam’s recent growth momentum in 2020. However, the country’s economic fundamentals remain resilient and the economy expanded at 2.9% in 2020. Viet Nam’s medium- and long-term economic prospects are also positive due to continued improvements in its business environment, expanded market access from free trade agreements, a growing middle class, and the ongoing shift of global and regional value chains to lower-cost countries.

Viet Nam was one of the founding members of the Asian Development Bank (ADB) in 1966. ADB has since supported the country’s poverty reduction achievements, infrastructure developments, and has more recently been helping guide measures to address income inequality and socioeconomic disparities, particularly for ethnic minorities and other vulnerable groups.

Since 1966, ADB has provided $16.8 billion in cumulative sovereign assistance for Viet Nam.

Da Nang Port is the third largest port in Viet Nam.

Cumulative loan and grant disbursements to Viet Nam amount to $11.47 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.

On 1 January 2019, Viet Nam graduated to a Group C country, with access only to regular ordinary capital resources.


ADB-Supported Projects and Programs

In 2020, ADB’s active portfolio of sovereign projects and programs in Viet Nam was worth more than $4.7 billion, augmented by technical assistance of $59.3 million. These investments are helping the country emerge from the COVID-19 pandemic, enhance transport connectivity and urban development, improve access to quality education and health services, support climate change mitigation and environmental sustainability, and better integrate into the regional and global economy. To respond to the economic impacts of the COVID-19 pandemic in 2020, ADB provided Viet Nam with a $5 million grant, funded by the Women Entrepreneurs Finance Initiative. This grant supports women-led small and medium-sized enterprises in accessing bank credit during these difficult economic conditions.

ADB has a strong track record of helping Viet Nam achieve its impressive development results. Since 2010, ADB financing, knowledge, and partnerships have helped improve living standards for nearly 1 million poor and vulnerable people and generated 43,100 jobs. ADB support for agriculture and natural resources improved 23,049 hectares of land through climate-resilient irrigation infrastructure and water delivery services, directly benefitting 3.39 million rural residents. Prioritizing gender equality, ADB-supported projects also helped nearly 1.6 million women and girls be better prepared for external shocks such as COVID-19, climate change, and natural disasters.

ADB is also supporting the Government of Viet Nam’s efforts to strengthen, deepen, and broaden the reach of Viet Nam’s finance sector. These include improvements in the legal and regulatory framework for financial stability, nonperforming loan resolution, and bank restructuring. ADB has backed the government in creating an enabling environment for money market and capital market development. It is also supporting policy measures to introduce a market-based approach to financial inclusion through the development of microfinance and adoption of financial technology.

ADB’s private sector operations have supported finance sector development through a range of activities, including the Trade Finance Program and credit lines for commercial financial institutions to support small and medium-sized enterprises. ADB also helps strengthen capacity development in the finance sector through technical assistance combined with financing.

ADB is committed to sharing knowledge for effective development in Viet Nam, while leveraging a wider range of financial and technical support, including private sector investment and operational participation.

ADB has provided students with educational facilities.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments in loans and equity investments from ADB’s own funds in 2020 amounted to $1.4 billion for 38 transactions in economic and social infrastructure, finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2020, ADB mobilized $1.9 billion of long-term project cofinancing and $3.3 billion of cofinancing through its Trade and Supply Chain Finance Program and Microfinance Program. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $14.3 billion as of 31 December 2020.

In Viet Nam, 2020 commitments from ADB’s own funds amounted to $75.2 million for a water treatment expansion project, two renewable energy projects, a private equity fund, and a pharmaceutical project. Total outstanding balances and commitments of ADB’s nonsovereign transactions in the country as of 31 December 2020 was $1 billion, representing 7% of ADB’s total nonsovereign portfolio.

Financing Partnerships

Financing partnerships enable ADB’s financing partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade and Supply Chain Finance Program and Microfinance Program.

ADB began cofinancing operations in Viet Nam in 1972. Since then, sovereign cofinancing commitments for Viet Nam have amounted to $4.6 billion for 60 investment projects and $132.22 million for 96 technical assistance projects. Nonsovereign cofinancing for Viet Nam has amounted to $9.87 billion for 10 investment projects.

In 2020, Viet Nam received $5 million grant cofinancing from the Women Entrepreneurs Finance Initiative for the COVID-19 Relief for Women-Led Small and Medium-Sized Enterprises. A summary of projects with cofinancing from 1 January 2016 to 31 December 2020 is available at Viet Nam: Cofinancing.

Operational Challenges

The impacts of climate change are becoming more severe in Viet Nam, with saline intrusion in the Mekong Delta, and drought, flood, and storm disasters in the central region. ADB works closely with other organizations— especially the United Nations Development Programme and, more recently, the Japan International Cooperation Agency—to support the government in dealing with postdisaster damage. It also collaborates with the World Bank and the Government of the Netherlands on infrastructure development for climate change resilience in the Mekong Delta.

The Government of Viet Nam has made efforts to improve its legal framework on Official Development Assistance management and ADB and other members of the 6 Banks Group continue to coordinate with the government on concessional loan management and utilization regulations, and in strengthening procurement capacity.

Aerial view of greenhouses in a farm in Lam Dong.

Future Directions

Taking into consideration the impacts of the COVID-19 pandemic, ADB is currently preparing a country partnership strategy to support Viet Nam over 2021–2025, incorporating priorities of Viet Nam’s Socio-Economic Development Plan 2021–2025. The bank will help Viet Nam build a core pipeline of projects that uses more responsive financing modalities. It will also incorporate value-adding innovations and technologies that can leverage either more concessional cofinancing or increased private sector participation, including through public–private partnerships. ADB will continue to support climate change adaptation and mitigation measures to respond to the heightened environmental risks facing Viet Nam. It will also explore the possibility of financing multisector projects at the subnational government level.

This article was originally published in the ADB and Viet Nam: Fact Sheet. Updated yearly, this ADB Fact Sheet provides concise information on ADB's operations in the country and contact information.

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