The deal was signed by Ambassador of the EU to Vietnam Giorgio Aliberti and AFD Director in the country Fabrice Richy on May 11.
Under the agreement, the EU provides a grant of EUR20 million (nearly US$21.6 million) to the AFD.
In coordination with the Vietnamese Government and local administrations, the AFD will mobilise the Water and Natural Resources Management (WARM) Facility to prepare and implement investment projects co-financed with the AFD loans and Vietnam’s own resources over the period 2021-2029 for an estimated total amount of EUR200 million.
“Adaptation to climate change is crucial for the sustainability of Vietnam’s development, and water and natural resources are a key element of it,” EU Ambassador Aliberti said.
The intention of the new grant is to support Vietnam on a pathway towards a greener and resilient future, he added.
Vietnam is one of the countries most severely affected by climate change and natural disasters.
Rising temperatures and sea levels, and the increased frequency and intensity of extreme weather events combined with population growth and urbanisation are increasing the risk of coastal erosion, urban flooding and drought.