ADB's Work in Viet Nam

Before the coronavirus disease (COVID-19) pandemic, Viet Nam’s annual economic growth rate averaged at 6.3% from 2010–2019, propelled by investments, a buoyant domestic consumption, rising middle class, and exportoriented manufacturing. Viet Nam weathered the COVID-19 impacts well in 2020, sustaining growth at 2.9%, among the highest growth in the Asia and Pacific region. However, the rise of COVID-19 cases from the Delta variant in 2021 severely affected the economy, dragging down the 2021 growth to 2.6%. Gross domestic product growth is forecast at 6.5% in 2022 and 6.7% in 2023 — a rebound made possible by Viet Nam’s high COVID-19 vaccination coverage, the shift to a more flexible pandemic containment approach, expanding trade, and the Government of Viet Nam’s economic recovery and development program.

Viet Nam was one of the founding members of ADB in 1966. ADB has since supported the country’s poverty reduction achievements and has more recently been helping guide measures to increase the inclusiveness of infrastructure and service delivery, and improve environmental sustainability and climate change response.

To date, ADB has committed 456 public sector loans, grants, and technical assistance totaling $16.5 billion to Viet Nam. Cumulative loan and grant disbursements to Viet Nam amount to $11.96 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Viet Nam includes 35 loans and 3 grants worth $3.62 billion.

ADB’s sovereign pipeline for Viet Nam for 2022–2024 includes 19 projects with an estimated amount of $3.37 billion. ADB continues to help Viet Nam emerge from the COVID-19 pandemic, enhance transportation and urban development, improve rural connectivity, and reduce pockets of poverty in remote areas of ethnic minorities. ADB will support improved access to quality education and health security, climate change adaptation and environmental sustainability, and better integration into the regional and global economy.

In 2021, ADB committed a $58 million loan to upgrade transport and water resource infrastructure and improve access to reliable weather and climate data in Binh Dinh and Quang Nam Provinces in the south-central coastal region of Viet Nam. The project will promote inclusive socioeconomic growth for about 243,000 people, including 126,300 ethnic minorities.

To support the Vietnam International Bank to increase its outreach to women-led small-and medium-sized enterprises for access to bank credit, ADB provided a $0.5 million technical assistance grant in 2021, funded by the Women Entrepreneurs Finance Initiative. ADB also provided support for public–private partnerships, promoting the private sector development and accelerating the reform of state-owned enterprises through a technical assistance of $4.6 million, funded by the Governments of Australia and Canada.

The Lotus Onshore Wind Power Project represents a major step forward in the fast-emerging sector wind power sector. Photo: ADB

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Viet Nam as of 31 December 2021 was $1.26 billion representing 8.99% of ADB’s total private sector portfolio.

Operational challenges. The prolonged COVID-19 pandemic with the emergence of new variants severely affected the economy and undermined the country’s growth potential. ADB will thus prioritize support for Viet Nam’s economic recovery. The country also faces increasing severity of climate change impact. In response to this, ADB works closely with other organizations to support the government in dealing with post-disaster damage. It also collaborates with the World Bank and the Government of the Netherlands on a program to develop infrastructure resilient to climate change in the Mekong Delta.

The Government of Viet Nam has made efforts to improve its legal framework on the management of official development assistance (ODA). Some obstacles remain and continue to delay ADB project processing and loan disbursement. To address these, ADB and other development partners continue to dialogue with the government to streamline medium-term investment planning processes, accelerate disbursements under ODA and concessional loans, and strengthen procurement capacity.

Knowledge Work

After consultations with government agencies, ADB completed a comprehensive knowledge needs assessment in 2021 to better understand the country’s needs and priorities for ADB’s knowledge support. It was part of the preparation of the ADB Country Knowledge Plan for Viet Nam for the upcoming period. Knowledge solutions will be delivered to improve policy development, enhance stakeholders’ capacity, and increase awareness and evidence-based information.

Amid the COVID-19 pandemic, ADB, in collaboration with government agencies, produced reports that assessed impacts of the pandemic on the country, including Digital transformation to power Viet Nam’s post-pandemic economic recovery, Assessment of COVID-19 Pandemic on income and employment in Viet Nam and Analysis of fiscal responses to the COVID-19 in Asia with policy implication for Viet Nam.

  ADB Projects in Viet Nam Project data sheets for loans, grants, TAs

Future Directions

ADB is currently preparing a country partnership strategy to support Viet Nam over 2023–2026. The bank has worked out a core pipeline of projects for 2022–2024 that uses more responsive financing modalities and considers Viet Nam’s priorities for medium- and long-term post-pandemic recovery. ADB’s integrated sovereign, nonsovereign, and knowledge approach aims to support the priority areas of the government’s Socioeconomic Development Plan, 2021–2025 with focus on inclusive growth; private sector growth; a green and climate-compatible recovery; and a climate-, disaster-, and pandemic-resilient society.

ADB will diversify its sovereign operations in Viet Nam from the central to the provincial level as an effective means of reaching areas of the country that are left behind and to enable integrated solutions to subnational development challenges. ADB will maintain its engagement in large national projects prioritized by the government in 2022–2024.

Last updated: 25 August 2022