ADB Okays $100 million loan for Vietnam’s irrigation

The Asian Development Bank (ADB) said Wednesday it approved a US$100 million concessional loan to rehabilitate one of Vietnam’s oldest and largest irrigation and drainage systems located in the heart of the Red-Thai Binh river basin.

The loan will also help build a campus for the Water Resources University.

“The loan-funded project is designed to address two binding constraints that contribute to the core sector problem of poor quality and delivery of water-related services – insufficient human resource capacity and inadequate public infrastructure,” Dennis Ellingson, senior natural resources management specialist of ADB’s Southeast Asia Department, said in Wednesday’s statement.

The Red River delta is one of the key economic hubs of Vietnam.

ADB said around 560,000 people living in the surrounding area of the 50-year old Bac Hung Hai irrigation and drainage system are expected to benefit from increased household incomes from improved irrigation. A total of 1.9 million people in the area will benefit from improved drainage and reduced risk of flooding, according to the bank.

The bank said the loan will fund education facilities to train engineers in water-related fields that are needed to meet the heightened demand of a rapidly growing economy.

A total of 13,400 future students and 800 faculty members will benefit from improved quality of education and improved learning and accommodation facilities at the new Water Resources University campus.

ADB will provide the loan from its Special Funds resources. The loan will have a maturity of 32 years with a grace period of 8 years and an interest rate of 1% every year during the grace period and 1.5% thereafter.

AFD, the French Development Agency, will co-finance the project with a loan of 20 million euro. The government of Vietnam will provide counterpart financing of US$51 million for the project, according to ADB.

By Tuong Thuy

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